Shire Fined $56.5 Million

Irish drugmaker Shire Pharmaceuticals has been ordered to pay a $56.5 million fine to settle claims that it exaggerated the benefits of several of its drugs, including Adderall XR and Vyvanse, both used to treat attention deficit hyperactivity disorder (ADHD).

According to a U.S. Department of Justice (DOJ) announcement, Shire made unsupported claims that Adderall XR would “normalize” children taking the drug, reducing their behavioral symptoms to the same level as kids without ADHD. 

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Shire also made other claims about Adderall XR without clinical data to back them up, including that the drug would improve academic performance, reduce unemployment, and prevent criminal behavior, the DOJ alleges.

“Marketing efforts that influence a doctor’s independent judgment can undermine the doctor-patient relationship and short-change the patient,” said U.S. Attorney Zane David Memeger in a statement Wednesday. “Where children’s medication is concerned, it can interfere with a parent’s right to clear information regarding the risks to the safety and health of their child.”

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On Shire’s website, the company confirmed that it has agreed to settle, but has not admitted any wrongdoing connected to the agreement reached with the DOJ. 

“Shire cooperated throughout this investigation and, in advance of this settlement, began to correct its marketing activities,” Memeger said.

Whistleblowers Bring Lawsuits Against Shire

The federal allegations resulted from two lawsuits filed under the whistleblower provisions of the False Claims Act by a former Shire executive and three former company sales representatives. The allegations cover activities by the company between January 2004 and September 2010. The former executive, Dr. Gerardo Torres, will receive $5.9 million as part of the settlement.

Wednesday’s settlement also resolved claims about two of Shire’s other ADHD drugs — Vyvanse and Daytrana — which the company allegedly said were less prone to abuse than similar drugs.

In addition, the case included claims that Shire sales representatives promoted Pentasa and Lialda — two of the company’s treatments for ulcerative colitis — for uses not approved by the Food and Drug Administration. For one, representatives claimed that Lialda could prevent colorectal cancer.

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Shire also said that it will pay $2.9 million to the state of Louisiana to resolve a previous civil complaint that the way it sold and marketed Adderall XR and other medications violated state law.

Fine Only a Small Fraction of Company’s Revenue

During 2007 — the last year covered by the DOJ settlement for false marketing claims about Adderall XR — Shire reported more than $1.03 billion in revenue from selling Adderall XR, more than 40 percent of its total revenue for that year. Sales of Vyvanse totaled $634.2 million in 2010, the last year covered by the DOJ settlement for that drug.

Since then, sales of Adderall XR dropped to $375.4 million in 2013, with revenue from Vyvanse growing to $1.22 billion. While the settlement is a substantial payout, it represents only 1.1 percent of Shire’s total revenue for 2013.

Since 2009, the DOJ has recovered more than $22.4 billion through cases involving the False Claims Act.

The settlement on Wednesday comes in advance of a planned acquisition of Shire by U.S. drug manufacturer AbbVie, in a deal valued at $55 billion. The newly merged company will be controlled by the shareholders of AbbVie, but will be based in Ireland.

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