Vanda Pharmaceuticals Inc. (VNDA) Used its Drugs for Off-Label Purposes
According to the complaint against the company’s officers and directors for breaches of fiduciary duties, unjust enrichment, and waste of corporate assets, beginning in November 2015, Vanda Pharmaceuticals Inc (VNDA) and its officers failed to disclose to investors that Vanda was involved in a fraudulent scheme that included violations of federal Medicare, Medicaid, and Tricare programs and that Vanda’s promotional materials were false and misleading, garnering scrutiny from the FDA. Specifically, Vanda schemed to promote its drugs Fanapt and Hetlioz for “off-label” uses in addition to other prohibited promotional strategies. The complaint alleges that Vanda’s executives and officers knew about the prohibited promotional strategies and actively participated in the fraudulent activity. As a result, Vanda is facing significant liability from a Qui Tam lawsuit and has already incurred substantial expenses in its investigation. Vanda has also been named as a defendant in a Securities Class Action lawsuit, causing further damage to the company.