DOJ Off-Label Promotion Defeat & Harsher Responses to Pharma Schemes

A Report from the Conference on Fraud and Abuse in the Sale and Marketing of Prescription Drugs and Medical Devices

As a dozen Department of Justice lawyers from several Northeastern states gathered in Boston to discuss fraud and abuse in the health and pharma sectors, the DOJ was settling an off-label promotion case with Amarin Pharma.

The First Amendment settlement has recognized the Dublin-based pharmaceutical company´s right to promote drugs for uses that are not approved by the FDA, as long as there is research supporting such uses. The FDA will not be appealing the court ruling that recognized Amarin´s free speech right to inform doctors about studies that supported the use of their drug Vascepa, whether or not they were approved by the FDA, as long as they were truthful.

In a statement, the FDA had tried to downplay the implications of the settlement, "It is important to note that this settlement is specific to this particular case and situation, and does not signify a position on the First Amendment and commercial speech."

With all of this information fresh from the courtrooms, the DOJ lawyers at the Conference on Fraud and Abuse in the Sale and Marketing of Prescription Drugs and Medical Devices could not avoid making statements about their perceptions of the DOJ´s position in regards to off-label promotion.

One thing all speakers seemed to agree on is that government restrictions for off-label  promotion of prescription drugs are at a crossroads. “There’s no question that, on the criminal side, the government has taken some lumps in these cases,” commented Kenneth M. Abell, New York´s Eastern District´s chief of civil health fraud.

Presenting before an audience largely composed of representatives of drug and medical device makers, the DOJ speakers warned them that the precedent of Amarin is in no way a green light for off-label promotion, emphasizing that off-label claims must be both truthful and non-misleading. As such absolute-certainty standards are difficult to meet, to say the least, it would seem that the best path for drug and device makers is to exercise extreme caution when it comes to making off-label claims.

DOJ Tackles Kickback Schemes – Olympus $600M Settlement

In the same vein as the Amarin case, the recent kickback scheme settlement with Olympus Corp. made the issue of kickbacks an inescapable topic at the conference. Olympus Corp, which will pay the government over $600 million, admitted to sending doctors on a trip to Japan as payback for switching to Olympus, giving hospitals grants to ensure equipment sales, and refusing research grants until hospitals agreed to buy equipment, among other kickback practices. As a result, Olympus took in over $600 million in sales and over $230 million in profits.

Pharma Kickbacks & Physician Bribes – Example Orthofix

Jacob T. Elberg, who is in charge of the DOJ’s health fraud unit in New Jersey, pointed to the many different ways in which these kickbacks may occur, which make them much harder to track down. On the other hand, many of the speakers made reference to the role of the physicians who accept the “bribes,” emphasizing that kickbacks are a two-way street and cannot occur without physicians who are willing to enter into such arrangements. “I don’t want to paint with too broad a brush, but many doctors are in on it, too,” Massachusetts-based assistant US attorney David Schumacher said, “Doctors end up being good witnesses for us, and in the most egregious cases, we do prosecute them.” As an example, Schumacher mentioned the case against dental company Orthofix, in which a physician was sentenced to prison.

The general sentiment seemed to be that the DOJ will continue to expand its reach into the wide variety of kickback schemes implemented by drug and device makers, while also focusing on communicating to the community of physicians about the kind of incentives they should be avoiding if they don´t want to be exposed to potential criminal charges.

With the hundreds of millions of dollars health care and pharma´s big players have lately been pouring into settlements with the DOJ, it is to be expected that the conference will have a positive effect on prescription drug and medical device companies´ adherence to the current legislation when it comes to both off-label promotion and kickbacks.

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