FOR IMMEDIATE RELEASE CIV

TUESDAY, MAY 8, 2007 (202) 514-2007

WWW.USDOJ.GOV 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.

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