Legal: Shifting Perspective on Off-Label Promotion - Pharmaceutical Executive

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Legal: Shifting Perspective on Off-Label Promotion
A recent court case points to the government's shifting perspective on how it prosecutes companies for promoting off-label. Instead of criminal charges, hefty corporate integrity agreements might be in store.


Pharmaceutical Executive



Jack Cinquegrana
Scrutiny of off-label drug promotion is on the rise. Since 2003, the Office of the Inspector General (OIG) has included investigation of pharmaceutical fraud in its annual work plans, and its 2005 plan specifically referenced its intent to assess FDA's oversight and review of permissible and impermissible off-label practices. This suggests the government's scrutiny of off-label drug marketing will continue, but raises a question about the future direction of the government's enforcement efforts.


Diana K. Lloyd
In recent off-label investigations, the government has relied on two theories under the Food, Drug, and Cosmetic Act (FDCA). The government may claim that a product promoted for off-label use is "misbranded" if it has inadequate directions for the unapproved use or because the company has provided "false and misleading" information regarding the product. Alternatively, the government may charge that promotion of a drug for an unapproved use constitutes the sale of an unapproved new drug, also a misbranding violation.


CIA: Head-to-Head Comparison
In any case, the relevant FDCA provisions are complex and ambiguous. That's led the government to develop its prosecution theories for off-label promotion in a number of well-publicized cases in which it has obtained criminal pleas and enormous civil penalties against pharma companies. However, a recent settlement in a major case against Serono suggests the government's position on criminal prosecution may be changing, and that it may rely more heavily on Corporate Integrity Agreements (CIAs) to enforce stricter compliance with the government's view of the law.

One Issue, Two Rulings

To understand the changing direction of enforcement action, it's helpful to first compare the settlement terms of two off-label promotion suits: Neurontin (gabapentin) and Serostim (somatropin), both negotiated by the United States Attorney's Office for the District of Massachusetts.

Neurontin In 1996, a whistleblower filed a civil qui tam action against Warner-Lambert, alleging that the company engaged in off-label promotion of Neurontin, and provided illegal kickbacks to physicians. The government initiated its own investigation and alleged that the company actively promoted Neurontin for off-label uses through its sales reps, medical liaisons, teleconferences, consultants' meetings, and advisory boards. Based on this, the government brought criminal misbranding charges against the company. The case was settled in 2004 when Warner-Lambert (later acquired by Pfizer) pleaded guilty to two criminal FDCA misbranding violations and settled separate civil charges.

To resolve the criminal case, the company pleaded guilty to distribution of an unapproved new drug, based on the theory that the distribution of Neurontin for unapproved uses constituted distribution of an unapproved new drug. The company also pleaded guilty to distribution of a misbranded drug, based on the theory that the FDA-approved package labeling contained inadequate directions for use for the off-label indications. As part of the settlement, Pfizer/Warner-Lambert agreed to pay $430 million in criminal fines and civil payments, and enter into a CIA with OIG. (See "CIA: Head-to-Head Comparison")

Serostim Between August 2000 and January 2004, six whistleblowers filed civil complaints against various Serono affiliates, alleging violations of the False Claims Act resulting from illegal marketing of Serostim, an FDA-approved drug for the treatment of AIDS wasting.


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