The Food, Drug and Cosmetic Act prohibits pharmaceutical companies from marketing or promoting a drug for uses that the FDA has not approved. This practice is known in the industry as “off label marketing”. Increasingly, pharmaceutical companies have purposely engaged in off label marketing in order to increase profits at the price of public safety. Practitioners in this area see this every day. Whether the public and even the medical profession is aware of the extent of this practice is unknown. Nonetheless, it appears that the False Claims Act remains one of the best tools available to address this deplorable practice.
As an example of the problem, we noted in an article published in the Corporate Crime Reporter on May 8, 2007, that Medicis Pharmaceutical Corporation of Scottsdale, Arizona had agreed to pay $9.8 million to settle allegations filed under the False Claims Act against the company. Medicis promoted the use of a topical skin preparation called Loprox for use on children under the age of 10. The Justice Department and the whistleblowers involved, former Medicis employees, alleged that Medicis sales personnel had purposely targeted pediatricians urging these doctors to use Loprox as a treatment for diaper rash. This product had never been medically approved by the FDA for the treatment of diaper dermatitis or other skin disorders in children under 10. Nonetheless, Medicis sales personnel were aggressively marketing the product for these uses. While the story in the Corporate Crime Reporter did not detail how much profit had been generated from this off label marketing campaign, there was some accountability for this improper use of the product via the fine imposed. Unfortunately, and quite literally, we see these stories every day which is indicative of the fact that Big Pharma is pursuing profits over public safety.
Also reported on May 8, 2007 was another settlement against Purdue Pharma, the maker of the ubiquitous pain medicine OxyContin. In this settlement, Purdue Pharma agreed to pay $19.5 million to settle litigation brought by 26 different states alleging extensive off label marketing. As part of the Consent Order agreed to with the various Attorney Generals involved in this litigation, the manufacturer agreed not to market or promote OxyContin for off label purposes – those beyond the approved indications and uses of the drug. Query, why would there have to be a settlement in which a large pharmaceutical company agreed to do that which it is already required to do? Obviously, the reason for both these cases is the same. Large profits are available to those who are willing to bend the law in order to reap the rewards. While crime does pay in many instances when it comes to off label marketing attempts by the pharmaceutical industry, nonetheless, the False Claims Act now is being effectively used by whistleblowers and the government to address this growing problem. One would think that sooner or later the Justice Department will have to start sending some people to jail if the practice is to be stopped.
What we see in these recent articles is nothing new. In 2006, Schering Plough agreed to a $435 million fine for off label promotion of its drug Temodar. In December of 2005, it was reported that Eli Lilly had agree to pay a $36 million fine to settle off label marketing allegations brought by the Department of Justice.
After sales of its post-menopause, osteoporosis drug Evista failed to garner the revenue expected, Eli Lilly salesmen began advertising the medication’s purported powers to prevent and reduce breast cancer and/or cardiovascular disease. The drug had not been approved for either of these uses.
Eli Lilly has been sued recently for the same reasons in connection with its drug Zyprexa. Again, the allegation is that Eli Lilly purposely has promoted off label purposes for this drug.
In May of 2004, Pfizer admitted to criminal wrongdoing in the marketing its drug Neurontin. It had to pay a $430 million fine to end federal and state investigations. In that case, a whistleblower alleged that the company had offered doctors tickets to the Olympics, trips to Disney World, and retreats to golf resorts to prescribe the drug for unapproved uses. Even though this was a large fine, over the last five years it was marketed, Neurontin brought in $9 billion in revenue to the company.
In April of this year, Pfizer announced that it would pay $34.7 million, in part to end an investigation by the Department of Justice into the off label marketing of its human growth hormone brand Genotropin. Even though not approved for such purposes, the company admitted that a subsidiary company previously acquired had improperly promoted this drug for anti-aging purposes, improved athletic performance, and enhance an appearance. Once again, the inducements to make huge profits at the government’s expense was obviously the central motive behind these schemes.