In this post, I will be focusing on the intersection of off-label communications with government enforcement of health care fraud through the False Claims Act. Over the past eight years, the U.S. Department of Justice (“DOJ”) has been particularly aggressive in using the False Claims Act to pursue recoveries from individuals, health care providers, and drug manufacturers that participate in federal health benefit programs. In fact, from 2009 to 2016, DOJ collected $19.3 billion from health care False Claims Act settlements and judgments, with $2.5 billion recovered in fiscal year 2016, alone. (More DOJ false claims statistics can be found here.) DOJ’s enforcement efforts are not solely targeted against garden variety billing fraud, but also involve claims arising from alleged violations of health care regulatory requirements. Among other things, the DOJ has been targeting claims for reimbursement for off-label uses of regulated products. DOJ’s aggressive policy of holding manufacturers accountable for off-label claims under the False Claims Act is entirely consistent with FDA’s stance on off-label communications as described in the January memo. However, recent court interpretations of off-label communications as protected First Amendment speech, as well as interpretations of the causality component of False Claims Act claims, have apparently caused DOJ to reconsider its strategy with respect to such cases. Continue Reading The Past, Present, and Future of Government Regulation of Off-Label Communications – Part 5

This is Part 3 in my series exploring the history of FDA’s regulation of off-label communications, which has become newly relevant in light of the recent events highlighted in Part 1. In this installment, I continue describing how FDA’s regulatory scheme has persisted in light of the key First Amendment decisions involving off-label promotion. Even though FDA hesitated in and ultimately rejected promulgating regulations that would make any action “that directly or indirectly suggests to the physician or to the patient that an approved drug may properly be used for unapproved uses for which it is neither labeled nor advertised” (37 Fed. Reg. 16,503, 16,504) into a matter warranting enforcement action, the Agency used this reasoning to shape an off-label communication policy. As I described in Part 2, FDA’s policy enjoyed some support from federal courts; however, this support was only temporary. More recently, federal courts have shown support for the idea that truthful and non-misleading promotions of off-label uses of drugs and devices by manufacturers are protected under the First Amendment. A review of the pivotal cases in this area will help put FDA’s off-label policy in perspective, especially in light of FDA’s reaction to these cases in a memorandum published in January 2017. Continue Reading The Past, Present, and Future of Government Regulation of Off-Label Communications – Part 3

On Monday, ML Strategies (MLS) posted its weekly Health Care Update, which provides information from the previous week on a variety of important health care-related topics like implementation of the Affordable Care Act, Congressional initiatives affecting the health care industry, and state and federal health regulatory developments.

In this week’s Update, MLS highlights two major developments for prescription drug manufacturers (among other topics):

  1.  the Medicaid Outpatient Drug Rule went to the White House’s Office of Management and Budget for final review; and
  2.  a federal district court judge ruled in Amarin Pharma, Inc. v. FDA that a drug manufacturer could market to health care professionals off-label uses for a prescription drug provided the manufacturer’s statements were truthful and non-misleading.

The Medicaid Outpatient Drug Rule could set standards for the Medicaid Drug Rebate Program and also provides for significant changes to what is and is not included in the Average Manufacturer Price (AMP) calculation, as well as how “best price” would be calculated for rebates.  Modifying the AMP calculation for the Medicaid program appears to be a priority for Congress, as the House also expressed interest in this issue when it passed the 21st Century Cures Act.

The Amarin Pharma decision is another significant victory for the drug industry (following the 2012 United States v. Caronia decision that drug manufacturers should be allowed to share and discuss with providers materials that support off-label claims).  Industry stakeholders must now wait to see how the FDA will react to Amarin Pharma and whether it will apply the decision in its off-label oversight framework.

To access past MLS Health Care Updates click here.

Written by Ellyn L. Sternfield

After the Second Circuit’s split decision in U.S. v. Caronia, holding that truthful off-label marketing is protected under the First Amendment and thus cannot be prosecuted under the misbranding provisions of the Food Drug and Cosmetic Act (FDCA), I predicted in a previous post that the government would file a motion for rehearing and would eventually take the case to the U.S. Supreme Court.  But the government has apparently has decided to take no action.

Continue Reading FDA Will Not Appeal Second Circuit Decision in U.S. v. Caronia

Written by Ellyn L. Sternfield

The U.S. Court of Appeals for the 2nd Circuit upheld a First Amendment challenge to the federal prosecution of pharmaceutical salesperson Alfred Caronia for off-label marketing, http://www.ca2.uscourts.gov/decisions.   Given the number of off-label marketing cases pursued by the government in recent years, this decision could have major repercussions.  But it is important to recognize the limits of the court’s December 3rd ruling.

The Food Drug and Cosmetic Act’s (FDCA) misbranding provisions, 21 U.S.C. Sections 331 and 333, are traditionally used by the government to prosecute off-label marketing cases:  intentional off-label marketing cases prosecuted as felony misbranding violations and strict liability cases as misdemeanor violations.   The government asserts that when a drug is marketed for uses not approved by the FDA, the drug is misbranded because its existing label does not adequately address the off-label uses.

In a split decision, the appellate court found that in convicting Caronia for conspiracy to introduce a misbranded drug into interstate commerce under the FDCA, the government prosecuted Caronia for his speech alone, which was not permissible under the First Amendment.  The court was persuaded by the fact the government never contended that Caronia said anything untrue or misleading about the drug products at issue, just that he promoted the products for uses not approved by the FDA.   The court was also guided by the Supreme Court’s 2011 decision in Sorrell v. IMS Health, holding that speech in aid of pharmaceutical marketing is a form of expression protected by the First Amendment.  With that precedent, the appellate court ruled that truthful off-label promotion was not tantamount to misbranding under the FDCA and reversed Caronia’s conviction.

But the appellate court did not strike down any portion of the FDCA.  And the court did not limit the government’s authority to prosecute individuals or entities under the FDCA for off-label marketing which is allegedly false or misleading, such as alleged suppression of clinical study results or misrepresentation of the extent of FDA approval.  What the court did say is that truthful off-label promotion of an FDA approved drug, without anything more, is protected speech and cannot be prosecuted as misbranding under the FDCA.

It is doubtful this ruling will mark the end of the Caronia case.  This was a split decision; the dissent persuaded that the defendant’s off-label marketing was merely evidence of the misbranding, so that Caronia’s conviction was not based on his speech alone.   Motions, potential rehearings, and an eventual appeal to the Supreme Court are likely next steps.  But with the plethora of pending off-label marketing cases, both criminal cases and parallel civil False Claims Act cases, we can be sure that government attorneys, defense attorneys, and whistleblower attorneys will all be paying close attention to what happens next.