Office of the Attorney General
Attorney General Stumbo Announces Settlement With Manufacturer of Loprox for Illegal Off-Label Marketing of Diaper Rash Medication

Press Release Date:  Thursday, December 13, 2007  
Contact Information:  Corey Bellamy, 502-696-5643 Office  

Attorney General Greg Stumbo announced today that the Kentucky Medicaid Program will receive an $181,084.21 settlement from Medicis Pharmaceutical Corporation

Medicis, headquartered in Scottsdale, Arizona, has agreed to pay more than $9.8 million to settle federal civil litigation arising out of its illegal promotion of the topical skin preparation, Loprox, for use on children under the age of 10, without approval by the federal Food & Drug Administration (FDA). 

“This is a significant recovery for our state’s Medicaid Program,” Attorney General Stumbo said. “As a result of this settlement, Medicis is paying damages equal to double the amount the Commonwealth expended for Loprox prescriptions written as a result the company’s off- label marketing.”

The investigation against Medicis was triggered when four former Medicis sales representatives filed a “whistleblower” lawsuit under the federal False Claims Act.  Representatives targeted pediatricians, urging the doctors to use Loprox as a treatment for diaper rash.  While Loprox is approved by the FDA as a fungicide for patients over 10 years of age, it is not a “medically accepted indication” for the treatment of diaper dermatitis and other skin disorders in children under 10.  As a result of this “off-label” promotion by Medicis, state Medicaid programs paid millions of dollars for Loprox prescriptions that would not have been reimbursed if government authorities had known that the prescriptions resulted from such an illegal marketing campaign.
Kentucky received a total of $181,084.21 as the result of the settlement.  After reimbursing the federal government for its contribution, the Kentucky Medicaid Program will be reimbursed $61,630.90. 

As part of the settlement, Medicis entered into a Corporate Integrity Agreement with the United States Department of Health and Human Services’ Inspector General, which will require Medicis to implement an internal Code of Conduct to ensure that it will market, sell, promote, research, develop and advertise its products in accordance with all federal health care program and FDA requirements.

The Attorney General’s Tip Line for reporting allegations of Medicaid fraud is 1-877-228-7384.