Off-label drug promotion and marketing yields significant penalties: Part 1 (Amgen settlement)

Off-label drug use is not illegal, but off-label drug promotion and marketing can result in significant legal penalties.Most recently, Amgen pled guilty to illegally introducing a misbranded drug, Aranesp, into interstate commerce as part of a global settlement in which Amgen agreed to pay $762 million to resolve criminal and civil liability arising from its sale and promotion of certain drugs.

The federal civil settlement agreement included allegations that Amgen:

  1. promoted drugs that it manufactured for off-label uses and doses that were not approved by the FDA and not properly reimbursable by federal insurance programs;
  2. offered illegal kickbacks to a wide range of entities in an effort to influence healthcare providers to select its products for use, regardless of whether they were reimbursable by federal healthcare programs or were medically necessary; and
  3. engaged in false price reporting practices involving several of its drugs.

Companies and businesses that want to promote drugs (such as HCG) for off-label uses should be aware of FDA laws such as misbranding.

Under Section 301(a) of the FDCA, the “introduction or delivery for introduction into interstate commerce of any food, drug, device, or cosmetic that is adulterated or misbranded” violates the FDCA.[i] Under Section 301(k) of the FDCA, misbranding also includes: “the alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to, a food, drug, device, or cosmetic, if such act is done while such article is held for sale (whether or not the first sale) after shipment in interstate commerce and results in such article being adulterated or misbranded.”[ii] In the latter case, the government must establish two separate elements: (1) that the act in question occurred while the drug was “held for sale after shipment in interstate commerce;” and (2) that the act resulted in the article being misbranded.[iii]

Enforcement actions against manufacturers for misbranding have resulted in substantial civil and criminal penalties.[iv] This includes an agreement by Otsuka Pharmaceutical to pay over $4 million in fines to resolve allegations of off-label marketing (drug approved to treat adult schizophrenia and bi-polar disorder, marketed for geriatric patients suffering from dementia-related psychosis);

[v]

an agreement by Cephalon to pay $425 million for off-label drug marketing (narcotic drug approved for ppioid-tolerant cancer patients, marketed for migraines, sickle-cell pain crises, injuries, and other uses);[vi] a $1.415 billion settlement by Eli Lilly for off-label drug marketing (approved anti-psychotic drug marketed to doctors for patients with sleep orders and dementia);[vii] and a $600 million settlement by Allergan for marketing Botox® for headaches and pains.[viii]

The FDA rarely takes enforcement action against physicians, for two reasons: (1) physicians generally operate intrastate in dispensing drugs to their patients subject to state licensing laws, and the FDA traditionally exercises jurisdiction over interstate activities; and (2) the practice of medicine is considered within the purview of state government, pursuant to the Tenth Amendment to the U.S. Constitution.

However, in U.S. v. Evers, the federal government charged Dr. Evers with misbranding a drug by using and promoting it for an off-label use—i.e., to treat arteriosclerosis instead of simply as a chelating agent. The trial court had found that Dr. Evers had “advertised in interstate commerce his use of chelating agents as treatment for arteriosclerosis.”

Off-label use by Dr. Evers to treat his patients was not considered illegal. The Court quoted FDA regulations stating that: “Once (an approved) new drug is in a local pharmacy after interstate shipment, the physician may, as part of the practice of medicine, lawfully prescribe a different dosage for his patient, or may otherwise vary the conditions of use from those approved in the package insert, without informing or obtaining the approval of the Food and Drug Administration.” The Court of Appeals noted: “Congress did not intend the Food and Drug Administration to interfere with medical practice and references to the understanding that the bill did not purport to regulate the practice of medicine as between the physician and the patient.”

Thus, off-label administration by the physician to his or her patient is not unlawful. However, the FDA’s argument against Evers was that Evers had “misbranded” the drug “when he publicly advocated” the off-label use, and in so doing, failed to provide “adequate directions” for use as required by Section 502(f)(1) of the FDCA.

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The Cohen Healthcare Law Group advises physicians and companies on off-label use legal issues, biotechnology laws, FDA and FTC legal issues in online and brick-and-mortar ventures, telemedicine, Stark and anti-kickback, integrative medicine, and on other business and healthcare legal issues. Contact our FDA legal team today.

See also:


[i] FDCA §301(a)(1), 21 U.S.C. §331(a)(1). In addition, inclusion of a non-FDA approved indication on a drug product’s labeling renders that product adulterated, in violation of the FDCA.

[ii] FDCA §301(k), 21 U.S.C. §331(k).

[iii] U.S. v. Evers, 643 F.2d 1043 (1981).

John E. Obsorn, Can I Tell You the Truth? A Comparative Perspective on Regulating Off-Label Scientific and Medical Information, 10 Yale J. Health Pol’y, L. & Ethics 299 (2010).

[iv] The experience of Purdue Pharma, manufacturer of the prescription pain medication OxyContin, illustrates the perils of misbranding and other violations of the FDCA. The company was accused of encouraging physicians to prescribe OxyContin for use every eight hours instead of the twelve-hour dosage approved by the FDA. It eventually agreed to pay 19.5 million dollars to twenty-six states and the District of Columbia to settle a civil suit based on its alleged promotion of off-label use of the painkiller. However, Purdue Pharma suffered an even more serious blow when the U.S. Department of Justice brought criminal charges against the company and three of its top executives. Federal prosecutors contended that Purdue Pharma had engaged in a fraudulent and deceptive marketing campaign that falsely claimed that OxyContin, because of its timed-release formula, was more resistant to abuse and less likely to cause addiction than competing products such as Percocet. The federal government also charged some company sales representatives with giving doctors misleading scientific data to support their fraudulent claims. Three company executives also pleaded guilty to misdemeanor charges of misbranding OxyContin, a violation of the FDCA that does not require proof that the defendants intended to defraud doctors or consumers or that they knew about the wrongdoing of others. These officials agreed to pay a total of $ 34.5 million in fines. Purdue Pharma illustrates that pharmaceutical companies and their executive officers who violate FDA regulations by promoting off-label uses run the risk of incurring huge fines or even incarceration if they are caught.

Another seminal case involved the Parke-Davis unit of Warner Lambert and its drug Neurontin (gabapentin):

Neurontin was approved by the FDA in 1994 as an adjunctive treatment for seizures associated with epilepsy. However, Parke-Davis was accused of developing and executing a promotional campaign to spur prescriptions for the treatment of pain and a series of psychiatric disorders, including anxiety and depression. To accomplish this, Parke-Davis employed a legion of technical medical writers who penned prospective journal articles in support of the purported off-label utility, and then paid physicians to put their names on the articles as authors.Parke-Davis also *313 hired “medical liaisons” as an adjunct sales force to solicit doctors to prescribe off-label, one of whom subsequently brought a qui tam action against the company alleging violations of the False Claims Act. Particularly damning were excerpts from a sales presentation in which a manager equated off-label prescriptions to “money,” dismissed alleged safety concerns as unworthy of consideration, and directed sales representatives to promote off-label. Pfizer, having acquired the Parke-Davis unit through its acquisition of Warner-Lambert, eventually settled these allegations for $430 million. In this matter, the government effectively announced its intention to focus on off-label promotion as a separate, actionable violation of the FDCA and the FCA. The case is notorious in that its salacious details show the industry at its worst in employing aggressive sales tactics and adopting marketing messages that diverge not only from the information contained in the approved label, but also from established medical science. (citations omitted)

 

[v]

See Department of Justice, Otsuka to Pay More than $4 Million to Resolve off-label Marketing Allegations Involving Abilify(March 27, 2008).

[vi] U.S. Department of Justice, Pharmaceutical Company Cephalon to Pay $425 Million for Off-Label Drug Marketing(September 29, 2008).

[vii] U.S. Department of justice, Pharmaceutical Company Eli Lilly to Pay Record $1.415 Billion for Off-Label Drug Marketing (January 15, 2009).

[viii] U.S. Department of Justice, Allergen Agrees to Plead Guilty and Pay $600 Million to Resolve Allegations of Off-Label Promotion of Botox® (September1, 2010).

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