Whistleblower Case Exposes Illegal Marketing of Thousands of Unapproved Drugs in U.S. Market

The national whistleblower law firm of Nolan & Auerbach, P.A. announces today the unsealing of a whistleblower case filed nearly a decade ago on behalf of its client Constance Conrad. Until today, the public has been unaware that dozens of small and mid-sized pharmaceutical companies have sidestepped (and a few continue to sidestep) the FDA drug approval process to manufacture and distribute unapproved drugs, which ultimately have been prescribed to Medicaid patients.

Putting a product in a medicine bottle with a prescription label on it is a representation that the product is safe, effective, and FDA approved. But some companies have skipped the approval requirement, creating serious health risks for the unwitting consumers that ingest these unapproved drugs. Taking unapproved drugs is risky because there is no adequate proof of the products’ safety or efficacy. This risk is particularly acute for the elderly and disabled, a medically vulnerable group that makes up 80% of Medicaid drug spending.

As a result of this lawsuit, the federal government has recovered nearly $100 million to date. Nevertheless, there is still much work to be done. Nolan & Auerbach, on behalf of its courageous client, is continuing to pursue the claims against nearly two dozen drug companies that have allegedly turned a blind eye to the law and illegally sold unapproved drugs. Nolan & Auerbach has allied with the Boston law firms of Roddy Klein & Ryan and Meehan, Boyle, Black & Bogdanow, to pursue this second, public phase of this case against the remaining defendants.

The firm’s qui tam complaint alleges that numerous drug companies repeatedly deceived the Government by falsely certifying that their unapproved drugs had passed the requisite FDA tests for safety and effectiveness, or otherwise met Medicaid drug approval standards. The Complaint maintains that these false certifications allowed the drug companies to peddle their unapproved products to physicians of Medicaid patients and to wrongfully receive payments from Government Health Care Programs.

Several companies have already settled this lawsuit and have been dismissed from it. For example, in 2010, there were three settlements involving unapproved drugs originally exposed in this multi-defendant qui tam lawsuit. In the first settlement, Eon Laboratories, Inc. paid more than $3.48 million to resolve allegations concerning the sale of its unapproved Nitroglycerin extended release product. In the second settlement, Schwarz Pharma and its subsidiary Kremers Urban, LLC paid $22 million to resolve allegations concerning the sale of two drugs, Deponit and Hyoscyamine Sulfate Extended Release. In the most recent settlement, Forest Laboratories, Inc., and its subsidiary Forest Pharmaceuticals, Inc., agreed to pay $42.5 million to resolve allegations that they illegally sold the drug Levothroid, even though the FDA had never proven the drug to be safe or effective. Today, it was revealed that the Government has decided to intervene in the action against Healthpoint, Ltd., which manufactured and promoted its drug Xenaderm.

Even though both the FDA and CMS have publicly announced that they have taken remedial steps, there are still hundreds of drugs illegally on the market, being paid for by taxpayer funds into 2010, and being ingested by consumers unaware of this circumstance. The following list contains a sampling of unapproved drugs still on the market:

Hyoscyamine Sulfate; Brompheniramine Tannate; Combination Product: Methenamine Mandelate, Sodium Phosphate, Monobasic; Combination Product: Phenylephrine Hydrochloride; Combination Product: Chlorpheniramine, Dextromethorphan, Phenylephrine; Combination Product: Lidocaine, Hydrocortisone Acetate; Combination Product: Hydrocortisone, Pramoxine, Chloroxylenol; Combination Product: Phenylephrine Hydrochloride, Methscopolamine Nitrate, Dexchlorpheniramine Maleate; Combination Product: Chloroxylenol, Pramoxine; Combination Product: Guaifenesin, Phenylephrine Hydrochloride; Combination Product: Hyoscyamine Sulfate, Methenamine, Phenyl Salicylate, Sodium Phosphate Monobasic, Methylene Blue; Combination Product: Codeine Phosphate, Guaifenesin; Combination Product: Chlorpheniramine Maleate, Phenylephrine Hydrocholoride, Chlorpheniramine Maleate, Methscopolamine; Combination Product: Hydrocortisone Acetate, Pramoxine; Combination Product: Pyrilamine Maleate, Phenylephrine Hydrochloride; Acetominophen, Phenyltoloxamine Citrate; Combination Product: Chlorpheniramine Maleate, Pseudoephedrine Hydrochloride; Combination Product: Dexchlorpheniramine, Dextromethorphan, Pseudoephedrine; Combination Product: Guaifenesin Pseudoephedrine; Combination Product: Tyrosine, Choline Bitartrate; Combination Product: Temazepam and choline bitartrate; Combination Product: Fluoxetine and Choline Bitartrate,; Combination Product: Trazedone and choline bitartrate; Combination Product: Theophylline and choline bitartrate; Combination Product: Carisoprodol and Choline Bitartrate; Combination Product: Ranitidine and choline bitartrate; Combination Product: Piroxicam and Choline Bitartrate.

Some unapproved drugs are manufactured as pediatric drops, specifically targeted for use by children. Virtually all of the drugs have National Drug Code numbers in their labeling, although these NDC numbers were never given or approved by the FDA.

The lawyers prosecuting this case welcome the opportunity to talk with any former employees of the listed defendant companies, who have firsthand knowledge or experience with these alleged practices. Please contact Attorney Marcella Auerbach at (800) 372-8304.

1.    Abbott Laboratories, Inc.
2.    Actavis Mid-Atlantic, LLC (formerly Alpharma, Inc.)
3.    Biovail Pharmaceuticals, LLC
4.    Blansett Pharmacal Company, Inc.
5.    Cypress Pharmaceuticals, Inc.
6.    Duramed Pharmaceuticals, Inc.
7.    Ethex Corporation
8.    Ferndale Laboratories, Inc.
9.    Goldline Laboratories, Inc.
10.    Hawthorn Pharmaceuticals, Inc.
11.    Hi-Tech Pharmacal Company, Inc.
12.    Medpointe, Inc. (formerly Carter Wallace, Inc.)
13.    Mylan Inc. (formerly Mylan Laboratories, Inc.)
14.    Pamlab, LLC (formerly Pan American Laboratories, Inc.)
15.    Qualitest Pharmaceuticals, Inc.
16.    Rugby Laboratories, Inc.
17.    Sciele Pharma, Inc. (formerly First Horizon Pharmaceutical Corp.)
18.    Shire US, Inc.
19.    Teva Pharmaceuticals USA, Inc. (formerly Copley Pharmaceutical, Inc.)
20.    The Harvard Drug Group, LLC (formerly Major Pharmaceuticals)
21.    United Research Laboratories, Inc.
22.    Warner Chilcott Corporation
23.    Watson Laboratories, Inc.-Florida (Formerly Andrx Pharmaceuticals, Inc.)

The whistleblower laws allow private citizens with detailed knowledge of fraud to bring an action on behalf of the Government and to assist in the recovery of the Governments’ stolen money. Successful whistleblowers can receive between 15 and 30 percent of the Governments’ recovery.

This case is United States et al., ex rel. Conrad v. Abbott Laboratories, Inc., et al., No. 02-cv-11738-NG (D. Mass.).

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