That may have been a mistake.
In its annual report released by the Securities and Exchange Commission Monday, Endo says it has received subpoenas from several states investigating its pelvic mesh products. The California Attorney General’s office is one of those states which issued a subpoena last November.
Not only is Endo/ AMS facing 16,534 lawsuits filed in multidistrict litigation in federal court in Charleston, WV (MDL No. 2325) but thousands of product liability actions have been filed in state courts around the country.
The healthcare fraud investigation focuses on whether state health plans (taxpayers) such as Medicare and Medicaid overpaid for the mesh implants. Investigations can include false claims, misbranding, kickbacks, improper marketing, a failure to report, illegal marketing for unapproved uses and billing for unnecessary procedures, among other criminal statutes. See Medi-Cal Fraud page here.
Not surprisingly the litigation has cut into Endo’s profits in its women’s health unit, according to the filing.
“Mesh litigation and FDA actions in connection with transvaginal mesh may continue to adversely affect sales of our female incontinence and pelvic floor repair products and the expense or potential liabilities of that litigation may exceed our current insurance coverage. ”
“ We may be the subject of product liability claims or product recalls, and we may be unable to obtain or maintain insurance adequate to cover potential liabilities.”
Heads up to investors- you may be on the hook for any settlements that are forthcoming.
Last month the company announced it had put aside $520 million to cover the cost of litigation or settlement. See back story here. Endo also recorded a pretax charge off about $316 million at the end of 2013 which brought its product liability fund to about $520 million.
At the time in a filing it said a loss that would surpass that figure could be a “reasonable possibility.”
Last June, Endo agreed to pay $54.5 million to settle an undisclosed number of pelvic mesh-injury claims. See back story here.
In its SEC filing, Endo Health Solutions Inc. said that an estimated 500 million women worldwide may suffer from urinary or fecal incontinence and around 400,000 surgeries are performed around the world annually to correct some form of pelvic organ floor prolapse.
Endo/AMS products include:
ElevateTM Anterior and Posterior Pelvic Floor Repair System. Our AMS segment offers the Elevate® transvaginal pelvic floor repair system, for the treatment of pelvic organ prolapse, which may be caused by pregnancy, labor, and childbirth. Using an anatomically designed needle and self-fixating tips, Elevate® allows for safe, simple and precise mesh placement through a single vaginal incision, avoiding an external incision. Elevate® revenue accounted for approximately 1% of our total revenues in both 2013 and 2012.
Monarc® Subfascial Hammock. The Monarc® subfascial hammock is our leading device to treat female stress urinary incontinence, which generally results from a weakening of the tissue surrounding the bladder and urethra which can be a result of pregnancy, childbirth and aging. It incorporates unique helical needles to place a self-fixating, sub-fascial hammock through the obturator foramin. Monarc® revenue accounted for approximately 1% of our total revenues in both 2013 and 2012.
Post-Approval Monitoring Ordered
In January, 2012, the Food and Drug Administration (FDA) ordered AMS to conduct post-approval studies on women who had received the pelvic organ prolapse and mini-sling implants to monitor them for complications. See background story here.
AMS received 19 orders but has honed that down to sixteen “for various commercial reasons” says its filing.
AMS took its Apogee and Perigee pelvic organ transvaginal mesh (TVM) off the market and in doing so it relieved the company of the post-market monitoring.
“AMS is continuing to work with the FDA to comply with these outstanding orders,”says the filing. #
Endo Health Solutions/ American Medical Systems – Principal executive offices at 1400 Atwater Drive, Malvern, Pennsylvania 19355, telephone number: (484) 216-0000).
Breaking News! AMS Alleges “Scheme” to Profit from Transvaginal Mesh Injuries, October 10, 2013
AMS Website www.americanmedicalsystems.com/home.html
AMS makes the Perigee, Elevate and Apogee transvaginal mesh (TVM) used to treat pelvic organ prolapse (POP), a common condition in women following pregnancy, due to weak collagen or as a result of aging. Apogee and Perigee are no longer for sale in the U.S. according to the AMS website.
AMS also makes the Sparc and Monarc slings to treat urinary incontinence, using a narrow strip or sling to support the urethra. All of the meshes are made from polypropylene, a petroleum-based plastic which is formed into a mesh material.