Under the Federal Food, Drug, and Cosmetic Act, pharmaceutical companies must prove to the Food and Drug Administration (FDA) that their drugs and medical devices are safe and effective to treat specific conditions before they will be allowed to sell their product in the United States for that use. If the FDA approves their request to sell the product for that specific use, the pharmaceutical company must prepare a label describing exactly what the FDA-approved use is. Once a drug or medical device is FDA-approved, the drug manufacturer may only market or promote its product for the approved use. If a company markets for a different use, “off-label,” and engages in interstate commerce for that unapproved use, the drug is “misbranded.” A company may not sell a misbranded product and Medicare and Medicaid will not buy misbranded products.
While pharmaceutical companies may not promote off-label use of an FDA-approved drug, nothing prohibits a doctor from prescribing an approved product for an un-approved use if the doctor determines it is beneficial in the treatment of the patient. When the doctor prescribes a drug or device in this way, the cost of the drug or device will be reimbursed by the government-funded health care programs.
When pharmaceutical companies realized they could grow their profit exponentially if they could couch their own off-label promotion as the doctors’ independent decision-making and not their self-promotion of unapproved uses, off-label marketing fraud took off. Companies began secretly funding trumped up studies and journal articles to suggest the benefit of the unapproved use. They also incentivized sales people to promote off-label uses to the prescribers. These efforts included massive budgets to entertain prescribers and to host them at “education” seminars designed to promote the off-label uses. The goal of these schemes was always to encourage more sales of the products, especially for the use of patients whose drugs and medical devices would be reimbursed by government-funded health care programs. The schemes worked. The companies realized billions in profits. However, those increased sales were largely paid for by the federal and state governments through Medicare and Medicaid.
Today, these schemes are widely recognized as a fraud on the government. However, off-label marketing fraud was only alleged as a theory of liability under the False Claims Act for the first time in 1996. In less than twenty years, this theory of liability has led to more recovery for the government than any other kind of fraud on the government. Off-label marketing cases have also included allegations of violations of other laws, including the Anti-Kickback laws. To date, federal and state governments have recovered tens of billions of dollars from every major pharmaceutical company for illegal off-label marketing of hundreds of different drugs.
Recoveries to date in False Claims Act cases involving off-label marketing schemes are also an indicator of the enormous profits to be gained by the pharmaceutical companies when they expand the market for their products. This financial incentive has continued to fuel new off-label marketing frauds even as the manufacturers get caught and return amounts improperly taken on other products. Whistleblowers play a vital role in policing this costly practice to make sure that decisions on what pharmaceutical products are ordered for patients are based on good science and adherence to the FDA approval procedures, not the profit margin of the pharmaceutical company manufacturing the drug.
If you have information about an off-label marketing scheme and you would like to learn more about or bring a whistleblower lawsuit, the qui tam lawyers at Keller Grover LLP can help you. The lawyers at Keller Grover understand qui tam litigation, including the whistleblower protection provisions, and strive to achieve the best possible results for their clients.