June 10, 2020
GOVERNOR CUOMO ANNOUNCES INSURANCE FRAUD ACTION AGAINST GLOBAL OPIOID MANUFACTURER
Department of Financial Services Files Administrative Charges Against Endo In Connection With Its Role in the Opioid Crisis
DFS' Charges Allege That Endo Fraudulently Misrepresented the Safety and Efficacy of Its Opioid Drugs While Minimizing the Risk of Addiction and Other Ill Effects
Actions That Helped Drive Over-Prescription of Unnecessary Opioids, Addiction and Abuse, and a Dramatic Increase in Insurance Costs for New York Consumers
Governor Andrew M. Cuomo today announced the New York State Department of Financial Services has filed charges and initiated administrative proceedings against Endo International plc and its subsidiaries, Endo Health Solutions Inc., Endo Pharmaceuticals, Inc., and Par Pharmaceutical Companies, Inc. These charges are the second to be filed in DFS' ongoing investigation into the entities that created and perpetuated the opioid crisis.
"All these opioid manufacturers knew how addictive and dangerous their products were, and they used it as a reckless business model for their own financial gain at the cost of thousands of human lives and billions of dollars. New York demands accountability from the drug companies and others responsible for the opioid epidemic that continues to devastate families and communities throughout the state and across the country," Governor Cuomo said. "Their greedy, fraudulent behavior is inexcusable, and New York will make sure that justice is served and these big pharmaceutical companies are ultimately held responsible for their actions."
According to DFS' Statement of Charges, Endo has been a prolific manufacturer of opioids in the United States, manufacturing approximately 18.4 percent of the opioids that flooded New York from 2006 to 2014. Endo manufactured both its own branded opioids as well as generic opioids.
The DFS' Statement of Charges alleges that, like other opioid manufacturers, Endo:
- Knowingly furthered a false narrative to legitimize opioids as appropriate for broad treatment of pain by downplaying their long-known addictive nature and risks. This strategic effort caused a shift in medical providers' and patients' acceptance of opioids as medically legitimate, necessary and appropriate painkillers. As a result, demand soared, as did the predictable negative consequences;
- Misrepresented the safety and efficacy of opioids, without legitimate scientific substantiation, in a panoply of materials typically used by the medical community and patients, including marketing and promotional materials, educational publications, and medical literature published by associations and key opinion leaders funded and supported by Endo; and
- Deployed a large sales force to target healthcare providers directly with these misrepresentations. Indeed, Endo's representatives made at least 165,000 sales calls just in New York to market its branded opioid, Opana ER, over just a four-year period.
DFS has further alleged that Endo repeatedly marketed a reformulated version of Opana as abuse-resistant without having a legitimate basis for such a claim. The Federal Food and Drug Administration had rejected Endo's request to use such language on product labelling on the ground that "the data did not show that the reformulation could be expected to meaningfully reduce abuse," and Endo's own internal documents showed that the new product remained subject to abuse. Despite that, Endo continued to market the new formulation as safer and less likely to be abused than its older product and comparable generics. In June 2017, the FDA requested that Endo remove Reformulated Opana ER from the market due to its high risk of abuse.
According to DFS' Statement of Charges, Endo violated two New York Insurance Laws. Section 403 of the New York Insurance Law prohibits fraudulent insurance acts and carries with it penalties of up to $5,000 plus the amount of the fraudulent claim for each violation; DFS alleges that each fraudulent prescription constitutes a separate violation. Section 408 of the Financial Services Law prohibits intentional fraud or intentional misrepresentation of a material fact with respect to a financial product or service, which includes health insurance and carries with it penalties of up to $5,000 per violation; once again, DFS alleges that each fraudulent prescription constitutes a separate violation.
The hearing will be held at the office of the New York State Department of Financial Services, One State Street, New York, New York, beginning on October 26, 2020.