Lawyers at one small San Francisco plaintiffs shop will sleep well tonight.
Orphan Medical Inc., now part of Jazz Pharmaceuticals, whose IPO we covered here, today agreed to pony up $20 million to settle civil and criminal charges alleging that the company aggressively marketed its lead narcolepsy drug, Xyrem, for unapproved uses.
A 2006 New York Times article reported that unapproved or “off label” uses of the drug included pain relief and treatment of depression.
Phillips & Cohen’s Erika Kelton and Larry Zoglin won’t be needing it.
They represented Shelley Lauterbach, who blew the whistle on Orphan in 2005. The case was filed under a federal false claims act in U.S. District Court in the Eastern District of New York.
The 13-lawyer shop makes false claims litigation its specialty. Kelton, a Phillips partner and lead attorney on the case, said that under the act, the whistle-blower gets between 15 and 25 percent of the award — or a minimum of $3 million for the whistle-blower — nothing to snooze over. The Justice Department has yet to determine what percentage Lauterbach will get, Kelton said.
It is also still unclear how much Phillips & Cohen will get in attorneys’ fees, said Zoglin, a full-time Phillips contract attorney who joined Kelton in the case. Under the act, the defendant is required to pay plaintiffs a “reasonable” amount in cases where the government is successful and recovers money. Phillips & Cohen is still hammering out the details with King & Spalding lawyers who represent Jazz.
“We expect to be able to come to a mutually acceptable resolution for that in the next few weeks,” he said.
Zoglin added that the Jazz case moved unusually quickly from filing to resolution. “I think [the government] saw it as having real health risks to the public so they got on it immediately,” Zoglin said. “Many take four, five, sometimes longer, years.”
— Petra Pasternak
Comments