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Post date: June 18 2015

A.G. Schneiderman Announces $6 Million Settlement With Illinois-Based Inspire Pharmaceuticals For Illegal Off Label Marketing

Settlement With Inspire Returns $800K To NYS Medicaid Program; Company Agrees To Stop Unlawful Marketing To Doctors Of Treatment Approved Only For “Pink Eye”

Schneiderman: My Office Will Hold Accountable Companies That Illegally Market Pharmaceutical Products To Physicians

NEW YORK—Attorney General Eric T. Schneiderman announced today that New York, along with 46 other states and the District of Columbia, have reached a multi-million settlement with Inspire Pharmaceuticals (“Inspire”), an Illinois based company.  The agreement resolves allegations that Inspire, located in Illinois, violated state and federal False Claims Act laws by illegally marketing the drug Azasite for off-label uses not approved by the U.S. Food and Drug Administration. A topical antibiotic, Azasite was approved by the FDA in 2007 solely for the treatment of bacterial conjunctivitis, an eye infection commonly known as “pink eye.” Under the settlement, Inspire agreed to pay the federal and state Medicaid programs $6 million, which includes civil restitution for damages to the state Medicaid programs and other federal healthcare programs. Under the terms of the settlement, the New York State Medicaid program will receive more than $800,000. 

“Prescriptions should be written based upon a physician’s best medical judgment and not upon a slick marketing campaign,” said Attorney General Eric Schneiderman. “Pharmaceutical companies, no matter how large, are not above the law, and my office will continue to ensure that pharmaceutical companies play by the rules, and that our Medicaid dollars—which are taxpayers dollars—are protected. My office will hold those who violated the law responsible for their actions.”

The settlement resolves allegations that Inspire caused the submission of false claims for reimbursement by the Medicaid program and other federal programs by illegally promoting Azasite for the treatment of blepharitis, an inflammation of the eyelash follicles along the edge of the eyelid, notwithstanding that Azasite had not been approved by the FDA to treat this condition.  Blepharitis is typically treated with warm compresses and lid scrubs, not pharmaceuticals.  While physicians are permitted to prescribe drugs for conditions other than those for which the drugs have been approved by the FDA, pharmaceutical companies are prohibited from marketing drugs to physicians for such off label conditions.  It is contended that, as a result of Inspire’s illegal off label promotion, Inspire caused the submission of false and fraudulent claims for Azasite to the Medicaid program and other federal programs.

The New York State Medicaid Fraud Control Unit was part of a national team from California, Washington and Illinois working with the Department of Justice and the United States Attorney’s Office for the Southern District of New York in investigating this matter.

The settlement stems from a complaint filed by a whistleblower, Jill DeGuzman, a former Inspire sales manager, under the Federal and New York State False Claims Acts, which authorize private individuals to sue on behalf of the State of New York and the Federal Government.   The Attorney General would like to thank Ms. DeGuzman for her efforts in bringing this matter to light. 

Special Assistant Attorney General Andrew Gropper and Regional Chief Auditor Stacey Millis from the Medicaid Fraud Control Unit (“MFCU”) represented the State of New York on the national team.  The MFCU is led by Acting Director Amy Held.  The Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.