Under the False Claims Act, companies must engage in honest, law-abiding behavior with regard to any aspect of healthcare to be reimbursed by federal entities like Medicare or Medicaid. For instance, pharmaceutical companies are required to adhere to the provisions of their FDA approvals when marketing drugs to physicians and healthcare facilities, otherwise subsequent invoices for reimbursement to Medicare or Medicaid patients will be denied.
In a highly controversial decision out of the U.S. Court of Appeals for the Second Circuit, the Court considered the defendant pharmaceutical company’s assertion that punishable behavior is distinguished between actually selling or prescribing drugs for off-label uses and merely promoting or marketing drugs for uses not specifically approved by the FDA. In the case of United States v. Caronia, drugmaker Orphan Medical, Inc. was facing liability under the False Claims Act and the Food, Drug and Cosmetics Act for marketing a drug approved for narcolepsy for the treatment of other conditions, including insomnia and Parkinson’s Disease.
At trial, the Court issued a ruling against Orphan for violating the FDCA by introducing “a misbranded drug into interstate commerce.” However, the Second Circuit overruled this conviction, holding that “the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of an FDA-approved drug.” Summarily, the promotion and marketing aspect of the off-label drug industry is acceptable under the First Amendment, and punitive measures are only to take place upon the sale and distribution of these drugs to patients for use outside of FDA approval.
Effect of First Amendment Application
By holding that the First Amendment protects off-label promotion, many whistleblowers and those engaged in False Claims Act litigation are left to discern precisely where the line is drawn between punishable and permissible behavior.
In a similar case involving off-label marketing and promotion of cancer drugs, the U.S. Department of Justice filed a statement of interest detailing its position in light of Caronia, reaching the inapposite conclusion that “the FCA does not prohibit off-label promotion of prescription drugs; rather, the FCA prohibits conduct that causes the submission of false claims to the Government for payment.” In other words, the False Claims Act is designed to punish the intentional fraudulent inducement of a physician or patient to try a drug for off-label use as opposed to the, apparently less culpable, act of speaking about the drug’s off-label benefits.
The brief further explained that our laws have never refrained from penalizing certain courses of conduct merely because “the conduct was….initiated, evidenced or carried out by means of language.” It thereafter drew a comparison between unlawful drug promotion and price-fixing antitrust violations, remarking both are accomplished, at least in part, by spoken word.
Exercise Your First Amendment Rights: Report Fraud
Regardless of the Court’s holding in Caronia, you have the unlimited power and freedom to report suspicious activity and hold fraudulent companies responsible for their behavior. If you are aware of deceitful billing practices by your healthcare provider, do not hesitate to contact a whistleblower attorney to discuss your rights. Successful False Claims Act plaintiffs stand to gain up to 30 percent of any amount recovered on behalf of taxpayers, so make your claim right away!
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