Department of Justice Seal Department of Justice
TUESDAY, MAY 8, 2007
(202) 514-2007
TDD (202) 514-1888

Medicis Pharmaceutical To Pay U.S. $9.8 Million
to Resolve False Claims Allegations

Company Allegedly Promoted Drug for Use Not Approved by FDA

WASHINGTON – Medicis Pharmaceutical Corporation of Scottsdale, Ariz., will pay the United States $9.8 million to settle allegations that the company violated the False Claims Act with respect to claims submitted to Medicaid, the Justice Department announced today. The settlement resolves allegations that Medicis promoted the use of a topical skin preparation, Loprox, for use on children under the age of 10, without approval by the Food & Drug Administration (FDA).

The United States and the whistleblowers – former Medicis employees – alleged that from approximately November 2001 through April 2004, Medicis sales personnel targeted pediatricians, urging the doctors to use Loprox as a treatment for diaper rash. The use of Loprox, which is approved by FDA as a fungicide for patients over 10 years of age, is not a “medically accepted indication” for the treatment of diaper dermatitis and other skin disorders in children under 10.

“This settlement demonstrates our ongoing commitment to protecting funds for federal health care programs,” said Assistant Attorney General Peter D. Keisler. “Pharmaceutical companies need to know that they will be held accountable for off-label marketing schemes and other illegal activities that affect those programs.”

The Food, Drug & Cosmetic Act prohibits pharmaceutical companies from marketing or promoting a drug for uses that the FDA has not approved, a practice known as “off-label marketing.” In the case against Medicis, the United States alleged that the Medicaid program paid millions of dollars for Loprox prescriptions that would not have been reimbursed if government authorities had known that the prescriptions resulted from the company’s off-label marketing campaign.

Medicis sold its pediatric sales unit in 2004.

The civil settlement resolves claims brought by four former Medicis sales representatives. As a result of the settlement, the whistleblowers will collectively receive in excess of $1,078,000 as their statutory award. Under the qui tam provisions of the False Claims Act, private parties can file an action on behalf of the United States and receive a portion of the settlement if the government reaches a monetary agreement with the defendants.

The case was investigated by FDA’s Office of Criminal Investigations and the State of Kansas Attorney General’s Office, and was handled by the U.S. Attorney’s Office for the District of Kansas and the Civil Division of the Department of Justice.