DOJ Reaches $56M Deal on Adderall Scofflaw

     PHILADELPHIA (CN) – Adderall manufacturer Shire Pharmaceuticals will pay $56.5 million to settle claims that its drug marketing flouted regulators and scientific evidence.
     The Justice Department obtained the settlement Wednesday in two lawsuits that whistle-blowers had filed under the False Claims Act in Philadelphia and in Chicago. Those cases alleged that Shire drug representatives told physicians that Adderall XR could “normalize” child and adolescent ADHD patients to non-ADHD metrics, despite not having any evidence in support of those claims.
     Another claim that its reps made without backing from studies was that patients were less likely to abuse Vyvanse, a slightly modified version of Adderall that Shire released in 2008, the complaints alleged.
     Vyvanse is the flagship drug in Shire’s portfolio, bringing in $359.5 million in the second quarter of this year and accounting for 25 percent of the company’s total revenue. In 2012, it received FDA approval for adult ADHD and is being tested for binge-eating disorder, a newly psychiatric disorder codified in the latest version of the Diagnostic and Statistical Manuals.
     Shire allegedly made similar claims about the “abuseability” of Daytrana, a patch that administers a steady dose of methylphenidate, the generic version of Ritalin.
     The government said Shire reps also tried to generate more prescriptions of Daytrana and Vyvanse by speaking to state Medicaid authorities on behalf of physicians with the prior authorization process for prescription.
     “Medicaid prior authorization programs are designed to ensure that only medically necessary services are provided in a cost-effective manner, and prior authorizations may only be requested by health care providers and their staff,” the settlement states. “When contacting Medicaid in connection with the prior authorization process, certain Shire sales representatives failed to disclose that they worked for Shire.”
     Shire, did not make any admission of wrongdoing in reaching the settlement, which covers all 50 states and the District of Columbia.
     While the U.S. government will take $35.7 million of the settlement fund, $20.8 million will go to state governments. Shire will also pay $2.9 million to resolve similar allegations from a civil complaint that the state of Louisiana filed.
     The settlement comes one day after the Obama administration announced new rules against tax inversions, in which domestic firms acquire or merge with foreign companies to escape U.S. corporate taxes. As with the Morton Williams-Burger King deal, acquisition of Dublin, Ireland-based Shire would let U.S. drugmaker AbbVie reincorporate abroad. Shire, which has offices in Wayne, Pa., had reduced its own tax obligations back in 2008 with the move from the UK to Dublin.
     Neither move has spooked stockholders, with Shire’s stock up 5.35 points at the end of yesterday.

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