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
As we’ve previously reported, FDA has recently been forced to reexamine its legal position and enforcement policies related to drug and device manufacturers’ off-label communications. Although the Agency has for years resisted calls to loosen its long-standing prohibitions on the off-label promotion of unapproved products, it has simultaneously recognized that truthful and non-misleading scientific or medical information coming from manufacturers about their own drug, biologic, and device products plays an important role in the U.S. health care system. This has especially been true in a climate where individual products are becoming more complex; precision medicine approaches to treating disease are gaining ground in clinical practice; and the health system is evolving into one more focused on outcomes and value-based arrangements between entities. The expansion of First Amendment commercial speech principles by the courts over the past decade and lawsuits against FDA also have pushed the Agency to move towards the potential reform of its existing off-label policies. Continue Reading Five Important Themes to Watch in the Reform of FDA’s Off-Label Communications Policy
Times, They Are A-Changin’
On Wednesday, FDA announced that it will hold a two-day public hearing on November 9th and 10th to obtain input from a broad cross-section of the health care industry, including pharmaceutical and medical device companies, doctors, patients, research institutions, health care organizations, and payors and insurers, regarding the appropriate regulation of manufacturers’ communications about off-label uses for their marketed medical products. Medical products include prescription drugs, biologics, medical devices, and animal drugs. This public meeting was originally “teased” by Agency officials as far back as April 2015, so it has been highly anticipated by all interested stakeholders. FDA’s announcement also comes after a series of high-profile losses for the Agency and the DOJ in the government’s attempt to prohibit and criminalize truthful, non-misleading off-label marketing. Continue Reading FDA Announces Dates for Long-Awaited Public Hearing on Its Regulation of Off-Label Communications
On March 8, 2016, Amarin Pharma, Inc. and FDA entered into a formal settlement, close to a year after the U.S. District Court for the Southern District of New York granted a preliminary injunction against FDA’s threats to treat Amarin’s proposed truthful and non-misleading off-label marketing about its drug, Vascepa (icosapent ethyl), as violative of the Food, Drug, and Cosmetic Act (“FDCA”). In August of last year, the Court ruled that FDA was impermissibly chilling truthful speech in violation of the First Amendment. Amarin Pharma, Inc. v. FDA, 2015 U.S. Dist. LEXIS 103944 (S.D. N.Y. Aug. 7, 2015). The parties’ settlement now accepts the court’s decision, reflecting a fundamental change in FDA’s previous policy of effectively prohibiting any off-label marketing by prescription drug and medical device companies, regardless of whether the proposed speech was objectively truthful.
The settlement comes after a series of high-profile losses for FDA and the DOJ in the government’s attempt to prohibit and criminalize truthful off-label marketing. Continue Reading Amarin/FDA Settlement: A Significant First Amendment Victory for Off-Label Marketing
In a post published earlier this week this week our colleagues Brian Dunphy and Joanne Hawana examined key issues in the recent Amarin decision from the Southern District Court of the New York. The August 7th ruling provided Amarin Pharma, Inc. with a preliminary injunction that blocks FDA from bringing a misbranding action against the company when making truthful statements to physicians regarding off-label uses of the drug Vascepa® (icosapent ethyl).
In addition to giving rise to potential misbranding charges under the Food, Drug, and Cosmetics Act, off-label marketing can give rise to False Claims Act (FCA) lawsuits and has resulted in many sizeable settlements. The basis for FCA cases involving off-label marketing is not that the marketing or prescribing of drugs paid for by federal health care programs for off-label uses is outright illegal, but rather that misleading marketing causes the prescriber to mistakenly believe that the drug is effective for off-label use and that the FDA has approved it for such off-label use. Off-label marketing causes a “false” claim to be made to the federal government when the physician prescribes a drug based on misleading marketing material, which is then paid for by a federal health care program, and the physician would not have prescribed the drug if he or she had known that the drug was not in fact FDA-approved or clinically proven to be effective for the off-label use. Continue Reading Off-Label Marketing and the False Claims Act
Pharmaceutical manufacturers have likely taken note of Amarin Pharma Inc.’s recent success in a pre-enforcement legal challenge against the Food and Drug Administration (FDA or the Agency). On August 7, 2015, Amarin obtained a preliminary injunction that prevents the Agency from bringing misbranding charges against the company for making truthful statements to doctors about off-label (unapproved) uses of the drug Vascepa® (icosapent ethyl). Amarin claimed that FDA’s threat of initiating a misbranding action had a chilling effect on the company’s ability to engage in constitutionally protected truthful speech, and from providing valuable information to physicians. This significant ruling from Judge Paul Engelmayer in the Southern District of New York represents the first time FDA has been enjoined on First Amendment grounds from prosecuting a drug manufacturer for misbranding based on the manufacturer’s truthful marketing of its product.
In filing its complaint against FDA, Amarin sought protection for its speech “both at a general and a statement-specific level.” At a general level, Amarin’s First Amendment challenge alleges that FDA’s threat of misbranding under provisions of the Federal Food, Drug and Cosmetic Act (FFDCA or the Act), 21 U.S.C., §§ 331(a) and 333(a)(1), restricted Amarin’s speech. Based on United States v. Caronia – a 2012 decision from the Second Circuit, discussed previously on our blog, here and here, in which the conviction of a drug company sales representative was vacated because Caronia could not be convicted for on the basis of his truthful speech about off-label uses for a drug – the court broadly held that Amarin may engage in truthful and non-misleading speech promoting an off-label use of Vascepa, and that this speech may not form that basis of a prosecution for criminal misbranding. At the statement-specific level, the court also reviewed in great detail specific statements and disclosures for which Amarin sought comfort would not be the subject of a misbranding action.
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):
- the Medicaid Outpatient Drug Rule went to the White House’s Office of Management and Budget for final review; and
- 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
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.