In a 2000 study, the National Institute for Health Care Management concluded that “more aggressive marketing of prescription drugs to both doctors and consumers,” is one of the factors contributing to the rise in prescription drug spending. The $2.4 billion spent by drug manufacturers on consumer advertising is far outstripped by the $8 billion spent each year on marketing to physicians.
According to the Federal Food, Drug, and Cosmetic Act (“FDCA”), a drug manufacturer may not promote or market the use of a drug for indications, dosages, or patient populations not approved by the FDA. However, many drug manufacturers nevertheless promote drugs for unapproved (or “off-label”) uses to boost drug sales and avoid the time and expense of seeking FDA approval.
Medicare and Medicaid reimbursement is restricted to either a) FDA-approved drug uses or b) drug uses included in specified, peer-reviewed drug compendia. Therefore, a reimbursement request for an off-label, non-compendium prescription constitutes a false claim when presented to the government. Consequently, any pharmaceutical company using marketing efforts to induce such requests violates the FCA.
Off-label prescriptions are commonplace in many medical specialties and account for approximately 21% of all drug prescriptions. While doctors may legally prescribe drugs for off-label uses, drug companies are prohibited from encouraging such uses through marketing and promotional efforts. While some off-label uses are scientifically valid and might provide health benefits to patients, there is a strong temptation for drug manufacturers to promote off-label uses of their products purely for profit. Therefore, off-label promotion exposes the public to health risks and the pharmaceutical industry to legal liability.
Examples of illegal promotional efforts include:
- Dinners or conferences with physicians where presentations about off-label uses are made
- Making false and misleading statements about data and studies on the safety and efficacy of off-label uses
- Encouraging sales representatives to provide unsolicited sales pitches to doctors about off-label uses
- Delaying reports that find no evidence of the drug’s efficacy for off-label use
- “Spinning” or reinterpreting negative data or bundling negative findings with positive studies to neutralize results
The trend has been for courts to interpret the FCA broadly. For example, a Massachusetts court recently held that even truthful off-label promotion could be grounds for a claim under the FCA if the pharmaceutical manufacturer was aware that its actions would cause the submission of false Medicaid claims. Courts are also inclined to recognize FCA actions based on a theory of implied certification of the AKS.
With regard to off-label promotion, the FCA is inextricably linked to the federal Anti-Kickback Statute (“AKS”). This law prohibits payments in any form, direct or indirect, made purposefully to induce or reward the referral or generation of federal health care business. While there is no private right of action under the AKS, the FCA can be used as a vehicle for whistleblowers to bring claims of fraud based on AKS violations. Courts have consistently held that actions that violate the AKS may serve as a basis for liability under the FCA.Example
Greene LLP filed a whistleblower lawsuit against Pfizer, alleging that the company illegally marketed the drug Neurontin for a wide range of off-label uses. While the Food and Drug Administration had initially approved Neurontin only as an adjunctive treatment for epilepsy, Pfizer marketed the drug to treat bipolar disorders, migraines, epilepsy monotherapy, and all forms of neuropathic pain – despite studies revealing the drug’s ineffectiveness in treating these symptoms. While the government decided not to intervene in the case, Greene LLP prosecuted the case independently, achieving a $152 million settlement under the False Claims Act because Pfizer had defrauded Medicaid through off-label promotion. The case was the first off-label marketing case under the False Claims Act and resulted in a $26 million award for the whistleblower.