Off-Label Marketing as Misbranding in Federal False Claims Act Settlements

In recent years, the Department of Justice and qui tam plaintiffs have pursued a rash of claims involving misbranding of prescription drugs based on off-label marketing (where the drug manufacturer promotes a drug for uses not approved by the FDA or makes claims about the safety or efficacy of the drug that are not supported by the FDA label).

Indeed, despite significant legal challenges and questions about both liability and damages under these theories, the government and private whistleblowers have succeeded in obtaining billions of dollars in settlements of criminal and civil claims for violations of the misbranding statutes and the federal and state False Claims Acts.

These settlements have involved some of the largest pharmaceutical companies, including J&J, Wyeth, Abbott and Pfizer. For example:

• J&J – Risperdal / Invega / Natrecor: J&J agreed to pay more than $2.2 billion to resolve criminal and FCA claims arising from its subsidiaries’ misbranding, off-label marketing, illegal kickbacks, and introduction into interstate commerce, of the prescription drugs Risperdal, Invega and Natrecor. These criminal and civil settlements include, inter alia, the following claims:

J&J and Janssen agreed to pay a total of $1.391 billion to resolve FCA claims resulting from their off-label marketing and kickbacks for Risperdal and Invega.  Among other allegations, the government alleged that J&J and Janssen marketed Risperdal and Invega for off-label indications and made false and misleading statements about the drugs’ safety and efficacy.

J&J and its subsidiary, Scios, agreed to pay the federal government $184 million to resolve their civil liability for FCA claims related to their off-label marketing and misbranding of Natrecor. In addition, in October 2011, Scios pleaded guilty to a misdemeanor FDCA violation and paid a criminal fine of $85 million for introducing Natrecor into interstate commerce for an off-label use.  Discussing the civil settlement of the misbranding and off-label marketing claims, Brian Stretch, the First Assistant U.S. Attorney for the Northern District of California, stated: “This case is an example of a drug company encouraging doctors to use a drug in a way that was unsupported by valid scientific evidence[.] We are committed to ensuring that federal health care programs do not pay for such inappropriate uses, and that pharmaceutical companies market their drugs only for uses that have been proven safe and effective.”

• Wyeth – Rapamune: Wyeth Pharmaceuticals agreed to pay $490.9 million to the federal and various state governments to resolve criminal and FCA claims relating to its misbranding and introduction into interstate commerce of the drug Rapamune. Wyeth had promoted the drug, which had been approved for kidney transplant patients, for off-label use in other types of transplant patients.

• ISTA Pharmaceuticals – Xibrom: ISTA Pharmaceuticals agreed to pay $33.5 million to the federal and various state governments to resolve criminal and FCA claims relating to its misbranding and introduction into interstate commerce of the drug Xibrom, and for violations of the Anti-Kickback Statute. ISTA had promoted the drug, which had been approved to treat pain and inflammation specifically following cataract surgery, for the off-label uses of treating pain and inflammation after Lasik and glaucoma surgeries and the treatment and prevention of cystoid macular edema.

• Amgen – Aranesp / Enbrel / Neulesta: Amgen agreed to pay $762 million to the federal and various state governments to resolve criminal and FCA claims arising from its misbranding, and introduction into interstate commerce, of the drug Aranesp, as well as its promotion of the drugs Enbrel and Neulesta for off-label uses, illegal kickbacks and false price reporting practices.

• Boehringer Ingelheim – Aggrenox / Atrovent / Combivent / Micardis: Boehringer Ingelheim agreed to pay $95 million to settle a qui tam lawsuit alleging that it violated the FCA by improperly marketing the stroke-prevention drug Aggrenox, the chronic obstructive pulmonary disease (COPD) drugs Atrovent and Combivent, and the hypertension drug Micardis.  In addition to resolving allegations that Boehringer promoted each of the drugs for off-label or unapproved uses that were not reimbursable by federal health care programs, the settlement resolves allegations that Boehringer knowingly promoted the sale and use of Combivent and Atrovent at doses that exceeded those covered by federal health care programs and that Boehringer knowingly made unsubstantiated claims about the efficacy of Aggrenox, including that it was superior to Plavix.

• Abbott – Depakote: Abbott Laboratories was ordered to pay $700 million to the federal and Virginia governments to resolve criminal charges arising from its misbranding of Depakote by marketing the anti-seizure drug for off-label uses and for illegal remuneration practices.  Abbott agreed to pay an additional $800 million to settle FCA claims.

• Pfizer – Bextra: Pfizer agreed to pay $2.3 billion to the federal and various state governments to resolve criminal and FCA claims arising from its misbranding of Bextra by promoting the anti-inflammatory drug for off-label uses and doses, paying kickbacks to health-care providers, and the off-label promotion of Geodon, Zyvox, and Lyrica.

Many of these cases were initiated by whistleblowers, often employees involved in marketing or detailing the drugs. In exchange for their information and assistance, the government paid tens of millions of dollars in awards to these whistleblowers.

Off-Label Marketing vs. Off-Label Prescribing: Example of Off-Label Cases

The Food and Drug Administration requires that drugs be proven to be safe and effective for a particular use before they can be marketed.  The FDA’s approval is always limited to use or uses for which the manufacturer has submitted evidence of safety and efficacy. For example, if a drug was not tested in children, approval is limited to use by adults.

However, the FDA regulates manufacturers, not doctors or hospitals.  Thus, a doctor may legally prescribe a particular drug for a use other than that for which it was approved.  However, a drug manufacturer may not promote the use of its products for any use other than that for which it is approved.

Medicare Fraud and Medicaid Fraud False Claim Cases: Another Example of Off-Label Cases

Generally speaking, Medicare and Medicaid do not reimburse for prescriptions caused by off-label marketing.  However, Medicare and Medicaid often have no way of knowing which prescriptions were caused by off-label marketing.  Thus, when a manufacturer causes an off-label prescription to be written, Medicare and Medicaid often pay for the prescription because they are unaware that it was caused by illegal marketing.

That said, the Department of Justice and the Courts, have recognized that a manufacturer’s promotion of a drug for an off-label purpose amounts to an inducement to doctors, hospitals, or pharmacies to submit a fraudulent claim to the government for reimbursement. Because the False Claims Act explicitly holds liable a party that causes another to submit a fraudulent claim, see 31 U.S.C. 3729(a)(1)(A), many actions against drug manufacturers premised on improper marketing have been successful.

Because drug manufacturers typically operate throughout the United States, these cases frequently involve very large amount of money.  Several have settled for hundreds of millions, and even billions, of dollars.

Click here to read further about reporting Medicare and Medicaid fraud.

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