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Friday
Jul172015

Jackpot: Pharma whistleblower awarded $33 million

Peggy Ryan (Image courtesy of the James Hoyer law firm)A federal judge awarded a former sales rep for Endo Pharmaceuticals Inc. $33.6 million as her share of a False Claims Act settlement.

Peggy Ryan filed a whistleblower suit in 2005 that alleged off-label marketing of the pain patch sold as Lidoderm.

In 2014, Endo paid the federal government $137 million to settle the allegations. It also paid $34 million to settle state claims.

This week U.S. District Judge Robert F. Kelly said Ryan's award should be 24 percent of the government's share, or about $33.6 million.

The judge called Ryan's nine-year battle in the case "extraordinary."

In a deferred prosecution agreement with the DOJ, Endo admitted it promoted Lidoderm to health care providers for unapproved uses.

Ryan said the company pressured her and other sales reps.

She told an industry publication last year that "from the onset of her training, her Endo superiors urged her to open the door to off-label dialogues with physicians, distributing off-label studies, and conferring messages like, 'put the patch where the pain is.'"

Under the False Claims Act, whistleblowers can collect up to 25 percent of amounts recovered.

The DOJ argued that Ryan's share should be 19 percent.

But Judge Kelly said: "An examination of the record exhibits that Ryan provided not only the spark for the investigation, but that she nurtured the flame at the darkest times when the possibility of a favorable outcome seemed most remote."

For five years, Ryan acted as an undercover informant for the FBI and wore a wire during meetings with her bosses at Endo.

"Throughout the nine-year period from her first qui tam complaint in 2005 to the settlement in 2014, Ryan continually provided access behind the corporate walls of Endo," Judge Kelly said. "Ryan's insider status, conferred by her employment with Endo, enabled the government investigatory team to recover evidence which would have otherwise been unobtainable."

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.