food and drug law journal · food and drug law journal volume 71 number 3 2016 _____ 327 401 442...

FOOD AND DRUG LAW JOURNAL

EDITOR IN CHIEF

Judy Rein

EDITORIAL ADVISORY BOARD

CHAIR

Laurie Lenkel FDA – OC

VICE CHAIR

Robert Giddings Hutchison PLLC

FACULTY ADVISOR

Joseph A. Page Georgetown University Law Center

________________________________

Anthony Anscombe Sedgwick LLP

Peter Barton Hutt Covington & Burling Barbara Binzak Blumenfeld Buchanan Ingersoll & Rooney PC

Catherine Clements Express Scripts

Kellie Combs Ropes & Gray LLP

Nathan Cortez Southern Methodist University

Brian Dahl Dahl Compliance Consulting LLC Sandra dePaulis FDA – CVM

Ian Fearon British American Tobacco

James Flaherty Fresenius Medical Abraham Gitterman Arnold & Porter LLP Kimberly Gold Norton Rose Fulbright LLP John Johnson FDA Imports Alan Katz toXcel, LLC Sara Koblitz Fish & Richardson Valerie Madamba Blue Apron Alan Minsk Arnall Golden Gregory LLP Nicole Negowetti The Good Food Institute James O’Reilly University of Cincinnati

Francis Palumbo University of Maryland School of Pharmacy Sandra Retzky FDA – CTP Joan Rothenberg FDA - CFSAN Jodi Schipper FDA – CDER Christopher van Gundy Keller and Heckman James Woodlee Kleinfeld Kaplan & Becker LLP Emily Wright Pfizer Kimberly Yocum TC Heartland PLC Lowell Zeta Hogan Lovells Patricia Zettler Georgia State University Law School

OFFICERS OF THE FOOD AND DRUG LAW INSTITUTE

CHAIR: Allison M. Zieve, Public Citizen Litigation Group VICE CHAIR: Jeffrey N. Gibbs, Hyman, Phelps & McNamara, P.C.

TREASURER: Frederick R. Ball, Duane Morris LLP GENERAL COUNSEL/SECRETARY: Joy J. Liu, Vertex Pharmaceuticals

IMMEDIATE PAST CHAIR: Sheila Hemeon-Heyer, Heyer Regulatory Solutions LLC PRESIDENT & CEO: Amy Comstock Rick

GEORGETOWN UNIVERSITY LAW CENTER

STUDENT EDITOR IN CHIEF

Dana Shaker

STUDENT MANAGING EDITORS

Jacob Klapholz Christine Rea

STUDENT NOTES EDITOR SYMPOSIUM EDITOR

Lauren Beegle Alexander P. Kramarczuk

STUDENT EXECUTIVE EDITORS

Courtney L. Blandford Lindsay Laddaran Christopher R. Lombardi

Thomas Crimer Jackson Lavelle Emily Salomon

STUDENT SENIOR STAFF EDITORS

Colleen Hespeler Arvind S. Miriyala Bonnie Fletcher Price

Yang Li Sheaniva H. Murray Mariah Trisch

Laya Varanasi

FACULTY ADVISOR

Joseph A. Page

FACULTY ADVISORY BOARD

Oscar Cabrera Lisa Heinzerling David C. Vladeck

Vicki W. Girard John R. Thomas Timothy M. Westmoreland

Lawrence O. Gostin Rebecca Tushnet

O’NEILL INSTITUTE ADVISOR

Eric N. Lindblom

Food and Drug Law Journal

VOLUME 71 NUMBER 3 2016

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327

401

442

482

519

The Law of 180-Day Exclusivity Erika Lietzan and Julia Post

Truth, Falsity, and Fraud: Off-Label Drug Settlements and the Future of the Civil False Claims Act Joan H. Krause

A Spoonful of (Added) Sugar Helps the Constitution Go Down: Curing the Compelled Speech Commercial Speech Doctrine with FDA’s Added Sugars Rule Colleen Smith

You Want a Warning with That? Sugar-Sweetened Beverages, Safety Warnings, and the Constitution Sabrina S. Adler, Ian E. McLaughlin, Seth E. Mermin, and Reece W. Trevor

First Amendment Limits on Compulsory Speech Nigel Barrella

FDLI

401

TRUTH, FALSITY, AND FRAUD: OFF-LABEL DRUG SETTLEMENTS

AND THE FUTURE OF THE CIVIL FALSE CLAIMS ACT

JOAN H. KRAUSE*

ABSTRACT

The pharmaceutical industry may be losing the battle of public opinion, but it has won important victories in the war over First Amendment commercial speech. In December 2012, the Second Circuit held in United States v. Caronia that the misbranding provisions of the Food, Drug, and Cosmetic Act could not prohibit a sales representative’s truthful statements promoting off-label uses of his company’s products. At the same time, a parallel area of pharmaceutical litigation has curiously remained almost untouched: Civil False Claims Act (FCA) settlements based on allegations that manufacturers caused false claims to be submitted by promoting their drugs off-label. Yet logic suggests that if manufacturers have a First Amendment right to discuss off-label drug uses, claims submitted when drugs are prescribed for those uses should not be considered false.

This inconsistency is problematic and likely unsustainable. If manufacturers are emboldened by Caronia to challenge off-label FCA suits, the focus likely will be on the truth of the company’s statements. Despite its name, however, FCA is unsuited to addressing disputes over medical and scientific data. To maintain the integrity of this key anti-fraud enforcement tool, it is crucial to separate the truth of the claims for payment from the truth of the manufacturer’s underlying scientific statements. Because Medicare and Medicaid coverage determinations rely heavily on FDA approval, however, those issues are inextricably intertwined. This article explores why off-label promotion has been treated inconsistently in these contexts, and how this trend highlights the limitations of the FCA as a panacea for health care fraud.

* Dan K. Moore Distinguished Professor of Law, University of North Carolina School of Law;

Professor of Social Medicine (Secondary Appointment), University of North Carolina School of Medicine; Adjunct Professor, Health Policy & Management, Gillings School of Global Public Health. I am grateful to Zack Buck, David Engstrom, David Kwok, and the participants in the “Fraud, Regulation, and the Whistleblower” panel at the 2015 Law & Society Association Annual Conference for their comments on earlier drafts of this article. Able research assistance was provided by Ariana Johnson and Jennifer Little. All errors are mine alone.

402 FOOD AND DRUG LAW JOURNAL VOL. 71

TRUTH, FALSITY, AND FRAUD: OFF-LABEL DRUG SETTLEMENTS

AND THE FUTURE OF THE CIVIL FALSE CLAIMS ACT

The truth is rarely pure and never simple.1

There are no whole truths; all truths are half-truths. It is trying to treat them as whole truths that plays the devil.2

I. INTRODUCTION

When the Pharmaceutical Research and Manufacturers of America (PhRMA), the industry’s largest trade group, announced an advertising campaign in February 2016 “designed to improve its reputation with lawmakers as it lobbies against any effort to rein in prescription costs,” perhaps few were surprised.3 Coming less than a week after former Turing Pharmaceuticals CEO Martin Shkreli refused to testify before the House of Representatives regarding his company’s massive price increase for the antiparasitic drug Daraprim—then called the members of Congress “imbeciles” on Twitter—public perception of the pharmaceutical industry may have reached an all-time low.4 A PhRMA representative acknowledged as much, admitting that “[t]he industry can’t change the minds of more than 300 million Americans . . . so [is] instead focusing on policy makers.”5

While the pharmaceutical industry may be losing the battle of public opinion, it is winning important victories in the war over First Amendment commercial speech protection. In December 2012, the Second Circuit held in United States v. Caronia that the misbranding provisions of the Food, Drug, and Cosmetic Act (FDCA) could not prohibit a pharmaceutical sales representative’s truthful statements regarding off-label uses for one of his company’s drugs.6 In August 2015, a district court applied Caronia to permit Amarin Pharma to engage in truthful and non-misleading off-label promotion of one of its products.7 Just a few months later, the Food and Drug Administration (FDA) settled a similar dispute with Pacira Pharmaceuticals,

1 OSCAR WILDE, THE IMPORTANCE OF BEING EARNEST 18 (John Lancaster ed., Cambridge Univ.

Press 1999) (1895).

2 Alfred North Whitehead, Dialogues of Alfred North Whitehead (as recorded by Lucien Price) 19 (1954).

3 Joseph Walker, Drug Industry Launches Ad Campaign Aimed at Lawmakers, WALL ST. J., Feb. 7, 2016, http://www.wsj.com/articles/drug-industry-launches-ad-campaign-aimed-at-lawmakers-1454885145.

4 Anjali Athavaley & Melissa Fares, Shkreli Insults Congress on Twitter After Refusing to Testify, REUTERS, Feb. 4, 2016, http://www.reuters.com/article/us-usa-congress-shkreli-twitter-idUSKCN0VD244.

5 Walker, supra note 3.

6 United States v. Caronia, 703 F.3d 149, 168–69 (2d Cir. 2012). 7 Amarin Pharma, Inc. v. FDA, 119 F. Supp. 3d 196, 237 (S.D.N.Y. 2015).

2016 FOOD AND DRUG LAW JOURNAL 403

allowing the company to market a product for what the agency initially considered an off-label use.8 These cases have fueled a growing debate over pharmaceutical commercial speech, with industry advocates declaring victory over needless regulation while critics decried the erosion of FDA’s ability to protect the public from unsafe products.

At the same time, a parallel area of pharmaceutical litigation has proceeded almost untouched: Civil False Claims Act (FCA)9 enforcement against manufacturers based, curiously enough, on off-label promotion. In the months both leading up to and after the Caronia decision, manufacturers agreed to multi-million and even billion-dollar settlements based on allegations that they caused false claims to be submitted to Medicare and Medicaid by promoting their products for off-label uses. Caronia did not arise under the FCA, and the holding has no explicit application to FCA litigation. Yet logic suggests that if manufacturers have a First Amendment right to discuss truthful off-label uses of their products, bills submitted to Medicare or Medicaid when the drugs are used for those indications should not be considered false.

This inconsistency is problematic, and likely unsustainable. If pharmaceutical manufacturers are emboldened by Caronia to challenge these FCA prosecutions, as many in the industry predict,10 the resulting litigation is likely to focus on the truth or falsity of the company’s statements regarding off-label uses. Despite its name, however, the FCA is ill-suited to resolving disputes over scientific and medical data. To maintain the integrity of this key weapon against health care fraud, it is necessary to separate the truth or falsity of the claims for payment from that of the underlying medical information shared by the manufacturer. Yet because Medicare and Medicaid coverage relies heavily on FDA approval, those issues inextricably are intertwined. This article explores the reasons why off-label promotion has been treated differently in the First Amendment and FCA contexts, and the ways in which this trend highlights the limitations of the FCA as a panacea for health care fraud.

Part I sets the stage with the legal background on the limits of pharmaceutical marketing in the United States, including the statutory bases for restricting off-label promotion, evolving FDA guidance on manufacturer dissemination of off-label information, and the First Amendment issues raised by Caronia and similar litigation. Part II addresses the convoluted pathway by which off-label promotion may lead to the filing of a false claim, and considers why off-label FCA cases continue despite the success of recent First Amendment challenges to the restrictions. Part III analyzes how and why these two approaches may be on a collision course, focusing on the unsuitability of using the FCA to resolve disputes over the adequacy of scientific and medical information.

8 Settlement Agreement & General Release, Pacira Pharm., Inc. v. FDA, No. 15-CV-7055 (S.D.N.Y.

Dec. 14, 2015) [hereinafter Pacira Settlement].

9 31 U.S.C. § 3729 (2006).

10 See, e.g., Allison D. Burroughs et al., Off-Label Promotion: Government Theories of Prosecution and the Facts That Drive Them, 65 FOOD & DRUG L.J. 555, 588 (2010) (predicting FCA challenges).


II. LIMITS ON PHARMACEUTICAL MARKETING IN

THE UNITED STATES

Concerns about pharmaceutical company influence over off-label drug uses are complicated by the variety of government agencies with jurisdiction over the industry. A company may seek patent protection from the Patent and Trademark Office for a new pharmaceutical compound.11 But patent protection does not allow the company to sell a product; the approval and marketing of drugs is the province of FDA.12 Once approved for sale, drugs are subject to a variety of advertising and marketing restrictions imposed not only by FDA, but also by state and federal consumer protection laws.13 When prescription drugs are used by beneficiaries of the federal health care programs, such as Medicare and Medicaid, manufacturers also become subject to federal laws administered by the Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS).14 At the administrative level, enforcement of the federal health care program restrictions is handled by the HHS Office of the Inspector General (OIG), with civil and criminal enforcement by the Department of Justice (DOJ).15 Given this complex regulatory environment, it is no surprise that control over the industry may appear disjointed at best, and at times wholly inconsistent. Perhaps nowhere is this more apparent than in the confounding set of restrictions addressing the “off-label” promotion of prescription drugs.

A. The Prohibition on Off-Label Promotion

To appreciate the concept of “off-label” drug promotion, it is important to understand the concept of “labeling” in FDA’s regulatory scheme. The FDCA prohibits a manufacturer from introducing a new drug into interstate commerce unless FDA has approved that drug.16 To obtain approval, the manufacturer must provide FDA with sufficient evidence that the drug is both safe and effective for specific “indications” (uses); that information is reflected in the drug’s official labeling, which must accompany the packaging and appear in at least summary form with advertisements.17 FDA may reject a new drug application where, for example, the evidence fails to demonstrate the drug’s safety or “there is a lack of substantial evidence that the drug will have the” claimed effect.18 Labeling also includes other

11 35 U.S.C. § 1 (2012).

12 21 U.S.C. § 301 (2012).

13 See, e.g., CAL. HEALTH & SAFETY CODE § 109875 (West 2016). 14 42 U.S.C. § 1395, 1396 (2012).

15 In addition, private professional and trade organizations such as the American Medical Association, the Accreditation Council for Continuing Medical Education, and PhRMA have developed codes of conduct to guide their respective members. See, e.g., Code on Interactions with Healthcare Professionals, PHRMA, http://www.phrma.org/sites/default/files/pdf/phrma_marketing_code_2008.pdf (last updated July 2008).

16 21 U.S.C. § 355(a) (2012). 17 Id. at §§ 355(d), 321(k), (m) & 352; 21 C.F.R. § 202.1(e) (2012).

18 21 U.S.C. § 355(d) (2012). “‘[S]ubstantial evidence’ means evidence consisting of adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the drug involved, on the basis of which it could fairly and


printed, audio, or visual matter distributed by the manufacturer to describe the drug and its uses, including materials distributed by sales representatives during their discussions with physicians and other prescribers.19

Although drugs are approved for specific indications, physicians are free to prescribe them for both approved “on-label” and unapproved “off-label” purposes.20 Prescriptions and insurance drug claim forms generally do not include the patient’s diagnosis, making it difficult to determine exactly how often drugs are prescribed off-label. Available evidence suggests the phenomenon is common: one oft-quoted study by Radley et al. estimated that 21% (150 million) of the outpatient prescriptions written in 2001 were for off-label uses.21 While some interpret that study as evidence of the appalling extent of inappropriate and dangerous off-label prescribing, others read it to establish that at least in some circumstances, off-label use is “the norm rather than the exception.”22

That same freedom regarding off-label uses is not afforded to the manufacturer, however. There is no express legal prohibition on off-label promotion or marketing; indeed, there is no official definition of the central concept of “promotion,” beyond its colloquial meaning.23 In 1972, FDA unsuccessfully proposed a rule to clarify that “when a manufacturer or his representative . . . does anything 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, that action constitutes a direct violation of this Act and is punishable accordingly,” but the rule was never finalized.24 Instead, the prohibition has been implied from a variety of other, albeit rather circular, restrictions on drug distribution and

responsibly be concluded by such experts that the drug will have the effect it purports or is represented to have under the [proposed] conditions of use. . . .” Id.

19 21 C.F.R. § 202.1(l)(2).

20 See Caronia, 703 F.3d at 153; Citizen Petition Regarding the Food and Drug Administration’s Policy on Promotion of Unapproved Uses of Approved Drugs and Devices; Request for Comments, 59 Fed. Reg. 28,506 (Nov. 18, 1994) (quoting 1982 FDA Drug Bulletin stating that “once a [drug] has been approved for marketing, a physician may prescribe it for uses or in treatment regimens of patient populations that are not included in approved labeling”) (citation omitted).

21 David C. Radley et al., Off-Label Prescribing Among Office-Based Prescriptions, 166 ARCHIVES

INTERNAL MED. 1021, 1021 (2006); American Society of Clinical Oncology, Reimbursement for Cancer Treatment: Coverage of Off-Label Drug Indications, 24 J. CLINICAL ONCOLOGY 3206, 3206 (2006) (estimating that approximately half of uses for cancer drugs are off-label).

22 Amarin Pharma, Inc. v. FDA, 119 F. Supp. 3d 196, 200–01 (S.D.N.Y. 2015). Many argue that the current regulatory approach fails to strike the correct balance between ex ante precaution and ex post access. See Ryan Abbott & Ian Ayres, Evidence and Extrapolation: Mechanisms for Regulating Off-Label Use of Drugs and Devices, 64 DUKE L.J. 377, 379–80 (2015) (“Harm is not associated only with permitting access to unsafe products, but also with restricting access to beneficial products.”); Marcia M. Boumil & Kaitlyn L. Dunn, Off-Label Marketing of Pharmaceutical Products in the Wake of United States v. Caronia and United States v. Harkonen, 9 J. HEALTH & BIOMEDICAL L. 385, 432 (2014) (“There is a large divide separating off-label promotion and the marketing of snake oil and it is FDA approval that serves as gatekeeper.”).

23 See Alan Bennett et al., Back to First Principles: A New Model for the Regulation of Drug Promotion, 2 J.L. & BIOSCIENCES 168, 187 (2015) (noting lack of definition).

24 Legal Status of Approved Labeling for Prescription Drugs; Prescribing for Uses Unapproved by the Food and Drug Administration, 37 Fed. Reg. 16,503 (Aug. 15, 1972) (proposing new rule); Withdrawal of Certain Pre-1986 Proposed Rules; Final Action, 56 Fed. Reg. 67,440 (Dec. 30, 1991) (withdrawing proposal).


advertising.25 For example, promoting a drug for an unapproved use may violate the rule that advertisements “not recommend or suggest any use that is not in the” approved labeling.26 Similarly, labeling that suggests an unapproved use may cause a drug to be considered “new” for that purpose, and the manufacturer may be liable for introducing a new drug into interstate commerce without approval.27

Finally, and perhaps most commonly invoked, a manufacturer is prohibited from introducing a “misbranded” product into interstate commerce.28 A drug is misbranded if its label is false or misleading in any respect, including the failure to list adequate directions for the drug’s “intended use.”29 Intended use is defined in terms of “the objective intent of the persons legally responsible for the labeling,” and may “be shown by labeling claims, advertising matter, or oral or written statements by such persons or their representatives.”30 This means that oral and written communications from the manufacturer, including conversations between company sales representatives and physicians, may be used as evidence that the manufacturer intends the drug to be used in an unapproved way. Because that use will not appear on the drug’s official label, which by definition discusses only approved indications, the label will not contain adequate directions for that use and the drug may be considered misbranded.

While the existence of off-label use is not in doubt, a battle has long raged over its propriety. Some argue that FDA’s efforts to restrict off-label promotion are doubly harmful, violating the First Amendment while denying physicians access to crucial new information about the medications they prescribe for their patients. As Rodney Smolla has argued:

Why do doctors so often prescribe medications for off-label uses? It cannot be that doctors do not know what they are doing, do not care for their patients, or have somehow been seduced or suckered by drug companies . . . . The most plausible intuitive answer . . . is that doctors prescribe medications for off-label uses because they have made the independent, professional medical judgment that the prescription, on balance, holds more promise of doing good for the patient than harm.31

25 See Michelle M. Mello et al., Shifting Terrain in the Regulation of Off-Label Promotion of

Pharmaceuticals, 360 NEW ENG. J. MED. 1557, 1558 (2009).

26 21 C.F.R. § 202.1(e)(4)(1)(a) (2008). Regulations also prohibit advertisements that are false, lack fair balance, fail to reveal material facts about the drug, or otherwise may be misleading. Id. at § 202.1(e)(5), (6).

27 Id. at § 310.3(g)(4) (2015) (explaining that a drug may be “new” with regard to the treatment of one condition, even if approved to treat another).

28 42 U.S.C. §§ 331(a), 333(a) (2012) (penalties).

29 Id. § 352(a), (f) (2012). While “adequate directions for use” generally are defined as “directions under which the layman can use a drug safely and for the purpose for which it is intended,” 21 C.F.R. § 201.5, for prescription drugs the requirement is that the labeling contain adequate directions for use by practitioners. See id. at § 201.100(d)(1).

30 21 C.F.R. § 201.128. FDA recently proposed to amend the definition to clarify that a manufacturer does not “intend” a new use if it merely has knowledge that the product is being prescribed or used in an off-label way. Clarification of When Products Made or Derived from Tobacco Are Regulated as Drugs, Devices, or Combination Products; Amendments to Regulations Regarding “Intended Uses,” 80 Fed. Reg. 75,661 (Sept. 25, 2015).

31 Rodney A. Smolla, Off-Label Drug Advertising and the First Amendment, 50 WAKE FOREST L. REV. 81, 87 (2015) (emphasis in original); see also John E. Osborn, Can I Tell You the Truth? A


To others, however, the value added by industry is unclear at best. Advocates worry that “[p]harmaceutical firms have found ways to influence – and often corrupt – medical research and publications, and key firms and organizations that affect physicians’ clinical choices . . . . As a result, practitioners may think they are using reliable information to engage in sound medical practice, while they are actually relying on misleading information . . . .”32

The limited empirical evidence to date has only added to the furor. The 2006 Radley study concluded that 73% of identified off-label uses “had little or no scientific support,” although the authors acknowledged that they could not measure the full “gradient of evidence” for each use and thus might have overlooked uses with a lesser degree of scientific support.33 A more recent study of off-label drug use in Quebec concluded that the risk of adverse drug events was 44% higher for off-label compared to on-label drug uses.34 The lack of a comprehensive database tracking the actual indications for which drugs are prescribed makes an empirical resolution unlikely for the foreseeable future.35 Presently the battle remains mainly a rhetorical one, pitting scientific integrity against the potential excesses of the profit-driven marketplace.

B. Setting the Boundaries of Manufacturer Behavior

Most controversies involving off-label promotion have not involved traditional advertisements, but rather information provided in less-regulated interactions such as industry-sponsored educational meetings or encounters between sales representatives and physicians. In both form and substance, these interactions may elide the distinction between true scientific exchange and marketing activities undertaken primarily to increase product sales.36 Critics fear these encounters provide a forum for sharing information that is at best heavily biased in favor of the company’s products, and at worst an open invitation for the dissemination of inaccurate and

Comparative Perspective on Regulating Off-Label Scientific and Medical Information, 10 YALE J. HEALTH POL’Y L. & ETHICS 299, 307 (2010) (“[W]hile pharmaceutical companies have a profoundly important duty to act in a manner that is medically and ethically appropriate, communicating truthful, non-misleading scientific and medical information supports sound medical practice . . . .”).

32 Marc A. Rodwin, Institutional Corruption and the Pharmaceutical Policy, 41 J.L. MED. & ETHICS 544, 550 (2013); see also Stephanie M. Greene, After Caronia: First Amendment Concerns in Off-Label Promotion, 51 SAN DIEGO L. REV. 645, 694–704 (2014) (describing how doctors are misled by company-generated information); Sunita Sah & Adriane Fugh-Berman, Physicians Under the Influence: Social Psychology and Industry Marketing Strategies, 41 J.L. MED. & ETHICS 665, 665–72 (2013).

33 Radley et al., supra note 21, at 1026.

34 Tewodros Eguale et al., Association of Off-Label Drug Use and Adverse Drug Events in an Adult Population, 176 JAMA INTERNAL MED. 55, 61 (2016); see also Ryan Abbott & Ian Ayres, supra note 22, at 388–89 (describing “information deficit” regarding side effects of off-label uses).

35 Several commentators have called for diagnostic information to be included on insurance drug claim forms, both to assist in coverage decisions and to serve as a database for evaluating off-label use. See, e.g., Jennifer L. Herbst, How Medicare Part D, Medicaid, Electronic Prescribing, and ICD-10 Could Improve Public Health (But Only If CMS Lets Them), 24 HEALTH MATRIX 209, 213–14 (2014); Marc A. Rodwin, Rooting Out Institutional Corruption to Manage Inappropriate Off-Label Drug Use, 41 J.L. MED. & ETHICS 654, 660 (2013). Others have called for companies to report off-label usage data to the government. See Ryan Abbott & Ian Ayres, supra note 22, at 399–402.

36 See Joan H. Krause, Off-Label Drug Promotion and the Ephemeral Line Between Marketing and Education, 2 J.L. & BIOSCIENCES 705 (2015).


misleading pseudo-data.37 In the absence of a law or regulation explicitly prohibiting off-label promotion, FDA has issued a series of guidance documents focusing on two primary areas of concern: industry sponsorship of scientific and educational activities (or continuing medical education (CME)), and dissemination of scientific texts and article reprints to physicians. The content and force of those documents have varied based both on industry practice and on nascent First Amendment challenges.38

Rather than flatly prohibiting industry participation, FDA has sought to distinguish activities undertaken to market or promote a company’s products from those that support truly independent scientific and educational exchange. For example, when the agency finalized early guidance on industry support of CME in 1997, it focused on the extent to which “the company is in a position to influence the presentation of information related to its products or otherwise transform an ostensibly independent program into a promotional vehicle.”39 Relevant factors included who controlled the content and selection of speakers, whether manufacturer funding and relationships with speakers were fully disclosed, whether unapproved uses were discussed, whether the focus was educational rather than commercial, and who selected the audience (with particular concern for the involvement of Sales & Marketing personnel).40 A similar distinction between marketing and scientific/educational endeavors appeared in a 1996 guidance document addressing the distribution of journal reprints and reference texts containing information beyond the approved labeling, including off-label uses.41 The agency sought to limit such distribution to “reprints of articles that represent the peer-reviewed, published version of original efficacy trials,” as well as “sound, authoritative materials that are written, published, and disseminated independent of the commercial interest of a sponsoring company and are not false or misleading.”42 Thus, FDA has focused both on the accuracy of the information presented and on assuring that industry involvement does not convert these interactions into vehicles for off-label promotion.

In the mid-1990’s, both guidance documents were challenged by Washington Legal Foundation (WLF), a public interest law organization advocating for free market principles and individual and business liberties.43 In Washington Legal Foundation v. Friedman, WLF sought a declaratory judgment that FDA’s restrictions on off-label promotion violated the First Amendment; to the surprise of

37 See Mello et al., supra note 25, at 1563 (listing concerns). In addition to promoting public health

and preventing the dissemination of biased and inaccurate information, FDA argues that its approach also helps to preserve “the effectiveness and integrity of the . . . drug approval process.” Boumil & Dunn, supra note 22, at 391.

38 See Mello et al., supra note 25, at 1558–61; Guidances (Drugs), FOOD & DRUG ADMIN., http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm (last updated Jan. 22, 2016).

39 Final Guidance on Industry-Supported Scientific and Educational Activities, 62 Fed. Reg. 64,074 (Dec. 3, 1997).

40 Id. at 64, 96–99.

41 Advertising and Promotion; Guidances, 61 Fed. Reg. 52,800 (Oct. 8, 1996).

42 Id. at 52,801.

43 See WLF Mission, WASHINGTON LEGAL FOUND., http://www.wlf.org/org/mission.asp (last visited May 4, 2016).


many, the district court agreed.44 In a July 1998 opinion, the district court analyzed the restrictions as commercial speech under the test announced in Central Hudson Gas & Electrical Corporation v. Public Service Commission of New York: (1) whether the speech was not misleading and concerned lawful activity; (2) whether the asserted governmental interest was substantial; (3) whether the regulation directly advanced that interest; and (4) whether the regulation was narrowly drawn and not more extensive than necessary.45 Finding the restrictions more extensive than necessary to further the government’s interest in encouraging manufacturers to obtain FDA approval for new drug uses, the district court granted an injunction. The court’s order provided a blueprint for a more acceptable regulatory approach, prohibiting the agency from restricting a manufacturer’s ability to disseminate articles published in “a bona fide peer-reviewed professional journal” or reference textbooks “published by a bona fide independent publisher and generally available for sale,” but permitting the agency to require disclosure of both the manufacturer’s interest in the product and the fact that the use was not approved.46 While enjoining FDA’s policy, the court recognized the distinction between truly scientific documents and those commissioned solely for promotional purposes.

To muddy the waters, however, several months before the district court’s decision, Congress passed the Food and Drug Administration Modernization Act of 1997 (FDAMA), which permitted dissemination of information about new drug uses other than those in the approved labeling provided certain criteria were met—most notably the requirement that the manufacturer have applied (or intended to apply) for FDA approval of the new use.47 FDA finalized regulations implementing the law in November of 1998, apparently taking the view that the Friedman injunction was not applicable to the new statute.48 Clarifying that the injunction applied to FDA’s general policy, rather than any particular document, the district court later enjoined the enforcement of FDAMA and its implementing regulations as well.49 Not surprisingly, the government appealed.

The stage appeared to be set for the D.C. Circuit squarely to address the First Amendment implications of FDA’s restrictions on off-label promotion. The constitutional issue was avoided, however, when FDA and WLF reached agreement that the statute, regulations, and guidance documents merely established “safe harbors” from prosecution, rather than providing independent prosecutorial authority.50 While FDA retained the ability to use disseminated materials as evidence

44 Washington Legal Found. v. Friedman, 13 F.Supp.2d 51, 53 (D.D.C. 1998). WLF had previously

filed an unsuccessful citizen petition asking FDA to withdraw the draft guidance. See Food & Drug Admin., supra note 20.

45 Friedman, 13 F. Supp. 2d at 65–74 (citing Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557, 565–66 (1980)).

46 Id. at 74–75. 47 See Pub. L. No. 105-115, 111 Stat. 2296 (codified at 21 U.S.C. § 360aaa et seq.).

48 Dissemination of Information on Unapproved/New Uses for Marketed Drugs, Biologics, and Devices, 63 Fed. Reg. 64,556 (1998) (codified at 21 C.F.R. pt. 99).

49 Washington Legal Found. v. Henney, 56 F.Supp.2d 81, 82 (D.D.C. 1999). 50 Washington Legal Found. v. Henney, 202 F.3d 331, 335–36 (D.C. Cir. 2000).


of misbranding and other alleged FDCA violations, the agency claimed no “independent authority to regulate manufacturer speech.”51

That might have been the end of the matter, at least from a constitutional perspective. But the FDAMA provisions were written to sunset in September 2006, and Congress allowed them to expire. Recognizing that the 1998 safe harbors no longer had any legal effect, FDA published a new guidance document in 2009 identifying “good reprint practices” in the distribution of journal articles and medical texts.52 The document began with a clearly post-WLF disclaimer:

The guidance document represents the Food and Drug Administration’s current thinking on this topic. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. You may use an alternative approach if the approach satisfies the requirements of the applicable statutes and regulations.53

The chief difference between the new guidance and the earlier FDAMA regulations was the elimination of the requirement that dissemination be limited to off-label uses for which the manufacturer had filed or intended to file for additional approval.54 In February 2014, after the Caronia decision, FDA issued a revised document expanding its approach to the sharing of clinical practice guidelines containing information about unapproved uses, and setting forth specific recommendations applicable to manufacturer dissemination of journal articles, reference texts, and practice guidelines.55 To date, then, the constitutional issues surrounding FDA’s approach to off-label promotion have never fully been vetted.

C. U.S. v. Caronia: Potentially Resetting the Boundaries

The First Amendment dispute gained new life during the prosecution of Alfred Caronia, a Specialty Sales Consultant for Orphan Medical, Inc.56 Caronia was hired to promote the sale of Xyrem, a powerful central nervous system depressant

51 Id. at 336. See also Decision in Washington Legal Foundation v. Henney, 65 Fed. Reg. 14,286

(Mar. 16, 2000) (publishing FDA Notice to that effect). WLF subsequently asked the district court to enforce the original injunction, but the court held that the injunction had been vacated by the Court of Appeals decision. Washington Legal Found. v. Henney, 128 F.Supp.2d 11, 13 (D.D.C. 2000).

52 Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices, FOOD & DRUG ADMIN. (Jan. 2009), http://www.fda.gov/RegulatoryInformation/Guidances/ucm125126.htm (last updated Jan. 25, 2016).

53 Id.

54 In addition, materials were no longer required to be submitted to FDA in advance of dissemination. See id.; Mello et al., supra note 25, at 1556–57.

55 See Guidance for Industry Distributing Scientific and Medical Publications on New Uses—Recommended Practices, FOOD & DRUG ADMIN. (Feb. 2014), http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM387652.pdf. A separate document, issued in draft form in 2011, addresses how companies should respond to unsolicited requests for information about off-label uses, particularly on social media; Guidance for Industry Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices, FOOD & DRUG ADMIN. (Dec. 2011), http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM285145.pdf (advising that such requests be handled individually, and that the company’s public communications be limited to discussing approved labeling).

56 United States v. Caronia, 703 F.3d 149, 151 (2d. Cir. 2012).


containing gamma-hydroxybutyrate (GHB), the so-called “date rape drug.”57 When Caronia was hired in 2005, Xyrem was approved for the treatment of narcolepsy patients who also experienced cataplexy (weak or paralyzed muscles), as well as those experiencing excessive daytime sleepiness. Due to the drug’s potential side effects—which ranged from nausea, vomiting, and dizziness to the potential for coma and death—FDA required a “black box” warning to accompany the product stating that safety and efficacy had not been established in patients under sixteen and that there had been limited study of the drug in the elderly.58 To comply with FDA guidance, Caronia and other sales personnel were not permitted to answer questions from physicians about off-label uses; instead, they would fill out request forms and the company would respond directly to the physician. In contrast, physicians who spoke about Xyrem as part of the company’s speaker programs were permitted to discuss off-label uses, usually relating their own experiences with the product.59

Caronia’s prosecution was part of a larger off-label investigation of Orphan and one of the company’s frequent speakers, Dr. Peter Gleason. Caronia and Gleason were recorded on two occasions while they promoted the drug to another physician, who posed as a potential customer on the government’s behalf. On the first occasion, Caronia discussed unapproved uses of Xyrem for Parkinson’s disease, sleep disorders other than narcolepsy, multiple sclerosis, muscle disorders, and chronic pain.60 Caronia also spoke of using the drug in the elderly and in children under sixteen, describing “reports of patients as young as fourteen . . . and obviously greater than sixty-five;” Gleason similarly admitted he “had people under thirteen” and had spoken to neurologists who used the drug in children as young as eight and ten years old.61

Based on these statements, the government charged Caronia with two misdemeanor violations of the FDCA: one count of conspiracy to introduce a misbranded drug into interstate commerce and one count of introducing a misbranded drug into interstate commerce. Caronia filed an unsuccessful motion to dismiss, arguing that the allegations unconstitutionally restricted his First Amendment right to free speech. Caronia was convicted by a jury on the conspiracy prong, but not on the marketing allegations. He was sentenced to one year of probation, 100 hours of community service, and a $25 special assessment; he appealed. Separately, Orphan and Gleason pleaded guilty to misbranding.62

On appeal, the government argued that Caronia had not been prosecuted for his promotional speech itself, but rather that his speech served as “evidence that the ‘off-label uses were intended ones [ ] for which Xyrem’s labeling failed to provide any directions.’”63 The Second Circuit quickly disposed of that argument, finding that

57 Id. at 155.

58 “Black box” warnings consist of boxed text that appears in a drug’s labeling, highlighting problems with the drug that may lead to death or serious injury; FDA also restricts advertising for such drugs. See Drug Advertising: A Glossary of Terms, FOOD & DRUG ADMIN., http://www.fda.gov/drugs/resourcesforyou/consumers/prescriptiondrugadvertising/ucm072025.htm (last updated June 19, 2015).

59 Caronia, 703 F.3d at 156. 60 Id.

61 Id. at 156–57.

62 Id. at 157–58. 63 Id. at 160–61 (citations omitted).


“the government’s contention that it did not prosecute Caronia for promoting the off-label use of an FDA-approved drug is belied by its conduct and arguments at trial” and emphasizing that “[a] pharmaceutical representative’s promotion of an FDA-approved drug’s off-label use is speech.”64 In a change from the original WLF litigation, the First Amendment analysis was governed by the 2011 Supreme Court decision in Sorrell v. IMS Health, Inc., in which the Court overturned a Vermont statute prohibiting pharmaceutical companies from using prescriber information for marketing purposes.65 Applying Sorrell, the Second Circuit concluded that the government’s interpretation of the misbranding provisions imposed criminal speech restrictions that were both content-based, specifically restricting the discussion of off-label information, and speaker-based, applying to speech by manufacturers but not by physicians. Thus, the restrictions were subject to heightened scrutiny.66

Invoking the now-familiar Central Hudson test,67 the court concluded that Caronia’s promotional speech was not necessarily false and misleading—indeed, the government had not alleged that it was—and primarily concerned the off-label use of the drug, a lawful activity for physicians.68 While acknowledging the government’s substantial interests in drug safety and public health, the court concluded that the prohibition did not directly advance those interests because off-label use itself remained legal; in fact, the judges noted that the prohibition could well have the opposite effect, restricting the flow of information necessary for physicians and the public to assess the wisdom of off-label uses.69 Accordingly, the court held that the government’s restriction was not narrowly drawn, and that less restrictive (non-criminal) alternatives existed. The court concluded, “We construe the misbranding provisions of the FDCA as not prohibiting and criminalizing the truthful off-label promotion of FDA-approved prescription drugs.”70 FDA did not seek rehearing, and later announced that it would not seek Supreme Court review.71

D. Amarin: The Floodgates Open?

Reaction to the Caronia decision was swift. WLF, FDA’s long-time nemesis, declared victory and touted its role in briefing and arguing the case. Characterizing FDA as “greatly underestimating the importance of the” decision, WLF concluded

64 Id. at 161 (emphasis added). The dissent, however, agreed that Caronia’s speech merely “revealed” his intent that Xyrem be used in a way that violated its labeling. Id.at 169, 172 (Livingston, J., dissenting).

65 Sorrell v. IMS Health, Inc., 131 S. Ct. 2653, 2666 (2011).

66 Caronia, 703 F.3d at 164–65. Justice Breyer had foreshadowed the Caronia issue in his Sorrell dissent: “[A] firm, for example, could not suggest to a potential purchaser (say, a doctor) that he or she might put a pharmaceutical drug to an ‘off label’ use, even if the manufacturer, in good faith and with considerable evidence, believes the drug will help. All the while, a third party (say, a researcher) is free to tell the doctor not to use the drug for that purpose.” Sorrell, 131 S. Ct. at 2678 (Breyer, J., dissenting).

67 Caronia, 703 F.3d at 164 (citing 447 U.S. 557, 565–66 (1980)). 68 Id. at 165–66.

69 Id. at 166–67.

70 Id. at 169.

71 See Washington Legal Found., U.S. Abandons Appeal from Decision Affirming Off-Label Speech Rights (Jan. 28, 2013), http://www.wlf.org/upload/litigation/litigationupdate/012813RS.pdf; Matthew T. Newcomer & Yune T. Do, To Promote or Note to Promote? The Enforceability of FDA’s Off-Label Marketing Restrictions Following Amarin, 6 J. HEALTH & LIFE SCI. L. 20, 20–21 (2016) (discussing FDA’s decision).


that the government was unlikely to succeed in any future misbranding cases unless the off-label speech at issue was actually false or misleading.72 WLF forecast that the decision would be the death knell for prosecutions against individual salespeople and physicians, while FDA insisted that the decision would not significantly affect enforcement.73 Whether that same conclusion applied to causes of action against manufacturers themselves, however, remained unclear.

Predictably, the decision quickly emboldened others in the industry to act. Prior to Caronia, the federal government repeatedly had used the off-label settlement process to force companies to withdraw their First Amendment challenges to prosecution.74 In May 2015, however, Amarin Pharma brought a successful First Amendment challenge to FDA’s restrictions as applied to its statements about the cardiovascular drug Vascepa, approved in 2011 for treating patients with very high triglyceride levels.75 Prior to Vascepa’s approval, the company had entered into a “special protocol assessment” (SPA) with FDA under which the drug would be studied for the treatment of patients with slightly lower triglyceride levels, with the expectation that if the drug met the study benchmarks the agency would approve the additional use; another SPA covered a second study, designed to evaluate whether the drug also prevented major cardiac events such as heart attacks and strokes in high-risk patients.76 In 2013, the company requested supplemental approval based on the results of the first study.

Subsequent to the SPA, however, FDA had reviewed clinical studies for other cardiovascular drugs suggesting that the reduction of triglyceride levels in high-risk patients did not improve clinical outcomes, an unexpected finding given expectations about how such drugs worked. Rather than approving Amarin’s new indication, the agency convened an Advisory Committee meeting. The Committee found “substantial uncertainty” as to whether Vascepa would reduce real-life risks for patients, and the agency rescinded the SPA based on this new “substantial scientific issue.”77 In April 2015, FDA issued a Complete Response Letter acknowledging that the study had been carried out in accordance with the SPA and that Vascepa had in fact met the study’s goal; however, given the new scientific findings, the agency refused to approve the new indication until the second study confirmed that the drug was able to reduce major cardiac events in patients. The agency refused to allow Amarin to add the study results to Vascepa’s label, and warned that the drug could be considered misbranded if marketed for the expanded use.78

In response, Amarin filed suit in the Southern District of New York, seeking a declaration that it could engage in truthful and non-misleading off-label promotion of

72 Washington Legal Found., supra note 71.

73 Id.; Jill Wechsler, Tom Abrams: Caronia Won’t Stop Off-Label Enforcement, PHARMACEUTICAL

EXECUTIVE, Jan. 29, 2013, http://www.pharmexec.com/tom-abrams-caronia-wont-stop-label-enforcement (quoting FDA official).

74 See, e.g., Allergan Resolves United States Government Investigation of Past Sales and Marketing Practices Relating to Certain Therapeutic Uses of BOTOX(R), EVALUATE, Sept. 1, 2010, http://www.evaluategroup.com/Universal/View.aspx?type=Story&id=222505 (noting that FCA settlement required Allergan to dismiss its First Amendment lawsuit).

75 Amarin Pharma, Inc. v. FDA, 119 F. Supp. 3d 196, 200 (S.D.N.Y. 2015).

76 Id. at 209–11.

77 Id. at 210–11. 78 Id. at 211–12.


Vascepa. Amarin asked to make three statements based on the study results, as well as for permission to provide physicians with copies of the study and other peer-reviewed publications; the company offered to include disclaimers acknowledging that the broader use was not approved by FDA and that another clinical study was underway.79 The Director of FDA’s Center for Drug Evaluation and Research (CDER) offered to let the company make some of its proposed statements if accompanied with specific (and far more detailed) disclosures drafted by the agency, but would not permit any statements regarding the drug’s beneficial effects on reducing the risk of coronary artery disease – despite the fact that similar over-the-counter omega-3 food and dietary supplements made such claims.80 If Amarin agreed, the dispute would be moot. Not surprisingly, the company refused.

On August 7, 2015, the district court ruled in favor of Amarin, granting the company permission to “engage in truthful and non-misleading speech promoting the off-label use of Vascepa” and prohibiting such speech from being used as the basis for a misbranding prosecution.81 Interpreting Caronia to prohibit FDA from bringing a misbranding “action based on truthful promotional speech alone”—and concluding that the company’s proposed statements and disclosures, with minor changes, were indeed truthful—the court rejected the FDA’s attempt to distinguish the facts of Caronia.82

Lengthy settlement discussions followed, with the parties reaching an agreement in March 2016.83 FDA agreed to be bound both by the court’s holding that Amarin could engage in truthful and non-misleading promotion of Vascepa for these indications, and by the finding that the specific statements and disclosures approved as modified in the August 7, 2015, Order were permissible.84 Amarin retained the responsibility to ensure that all future communications to doctors regarding off-label uses remain truthful and non-misleading. Of particular interest to the industry, the settlement created a novel preclearance system under which Amarin could submit two proposed communications to FDA each year regarding off-label uses for Vascepa, setting forth specific procedures if the agency had any concerns.85

While many consider Amarin another clear win for the pharmaceutical industry and an unequivocal defeat for the government, that may not be the case. In many ways, Amarin was the worst possible challenge for FDA to pursue. The case was filed (intentionally) in the Southern District of New York, which is bound by Second Circuit precedent; thus, the district court was precluded from revisiting Caronia’s

79 Id. at 212–15.

80 Id. at 215–17; see also Letter from Janet Woodcock, M.D., Director, Center for Drug Evaluation and Research, Food and Drug Administration, to Steven Ketchum, Ph.D., President of Research and Development, Amarin Pharma, Inc., DEP’T HEALTH & HUMAN RESOURCES (June 5, 2015), available at http://www.thebrandprotectionblog.com/wp-content/uploads/sites/319/2015/06/FDA-June-5-2015-Letter.pdf [hereinafter Woodcock Letter]. Indeed, the agency even offered to let the company repackage the drug as a dietary supplement in order to make the desired claims. Amarin Pharma, 119 F. Supp. 3d at 215–17.

81 Amarin Pharma, 119 F. Supp. 3d. at 236. 82 Id. at 223, 236.

83 Stipulation and Order of Settlement, Amarin Pharma, Inc. et al. v. FDA et al., No. 15-CV-3588 (order issued Mar. 9, 2016), available at http://www.fdalawblog.net/AMRN%20Off-Label%20Proposed%20Settlement.pdf [hereinafter Amarin Settlement].

84 Amarin Settlement, supra note 83, at 2. 85 Id. at 2–3.


holding. The government tried to distinguish Caronia on its facts, but if anything the facts of Amarin were even clearer: the company had done exactly as FDA requested in carrying out the study, and the agency acknowledged that most of what the company sought to say was true. The agency even went so far as to offer to allow the company to repackage the product as an over-the-counter supplement that could make such claims. Bound by clear legal precedent, and with strong evidence of the truth of the proposed speech, it would have been surprising if the district court had found in the government’s favor. The same may not be true in circuits not bound by Caronia, however, or in cases with evidence of manufacturer subterfuge. While the settlement has fueled speculation about ever-broader challenges to off-label restrictions, this unique set of facts likely will limit the ability of other pharmaceutical companies to follow suit.

During the Amarin settlement discussions, while commentators were still digesting the district court decision, FDA settled another off-label dispute with Pacira Pharmaceuticals over the marketing of the postsurgical analgesic EXPAREL.86 Although EXPAREL’s supporting studies focused on postsurgical pain for two specific types of procedures (bunionectomy and hemorrhoidectomy), the drug was approved with broad language in 2011 for “administration into the surgical site to produce postsurgical analgesia.”87 When the company marketed the drug for broad postsurgical pain control, FDA issued a Warning Letter, and the company and several doctors filed a complaint for declaratory and injunctive relief.88 As part of the settlement, FDA withdrew the Warning Letter, confirmed that EXPAREL had been approved since 2011 for use in a variety of surgeries beyond the original studies, and agreed to revise the drug’s labeling.89

Similar to Amarin, Pacira was a highly fact-intensive dispute. The company sought to market the drug in accordance with the explicit, official FDA-approved labeling. While the agency may have argued that the broad language was not what it meant, that was unequivocally what the label said.90 Few manufacturers will find themselves in such an advantageous position.

Taken together, Amarin and Pacira suggest that future off-label challenges will focus not only on the accuracy of the company’s statements, but also on FDA’s role in the dispute. Evidence of malfeasance by a company, or a dispute arising with no argument that FDA bears some responsibility for the confusion, may lead to a different result. Moreover, Amarin and Pacira are relatively small companies, not major pharmaceutical players. Perhaps, then, they are the quintessential “canaries in the coal mine” of pharmaceutical First Amendment disputes. Whether one of the major manufacturers would be willing to fight the same battle—and whether FDA

86 Pacira Settlement, supra note 8 (entered into as of December 14, 2015).

87 Id. at 1–2; Ropes & Gray Advises Pacira Pharmaceuticals in Reaching Landmark Settlement Agreement with FDA, ROPES & GRAY (Dec. 16, 2015), https://www.ropesgray.com/newsroom/alerts/2015/December/Ropes-Gray-Advises-Pacira-Pharmaceuticals-in-Reaching-Landmark-Settlement-Agreement-with-FDA.aspx.

88 Pacira Settlement, supra note 8, at 2.

89 Id.

90 Indeed, during the initial approval process, the agency had rejected the recommendation of one of its reviewers that the drug be approved only for postoperative analgesia after hemorrhoidectomy and bunionectomy, approving the drug without any limitations on indications. Complaint for Declaratory and Injunctive Relief at 34–35, Pacira Pharm., Inc. v. FDA, No. 15-CV-7055 (S.D.N.Y. Sept. 8, 2015).


would be willing to take up the challenge – remains to be seen. What is clear, however, is that the Free Speech implications of off-label promotion are only beginning to be appreciated.

III. PROMOTION, PAYMENT, AND FALSE CLAIMS

Thus far, the effect of the recent First Amendment decisions on FCA actions against pharmaceutical manufacturers remains unclear. Because those who can write prescriptions control access to prescription drugs, physician participation is crucial if manufacturers want to increase off-label sales.91 Encouraging physicians to prescribe a drug for an off-label indication, however, is only half the battle. With prescription drug expenditures expected to increase by 5% to 7% annually, reaching almost $483 billion by 2023,92 many patients are not willing or able to fill a prescription unless the product will be covered by insurance. When that insurance is received through federal health care programs such as Medicare and Medicaid, a host of additional civil, criminal, and administrative restrictions apply.

Laws such as the Medicare and Medicaid Anti-Kickback Statute and the Ethics in Patient Referrals Act (the Stark Law) impose severe civil and criminal penalties for using financial incentives to influence a physician’s choice of product or to direct referrals to entities with which the physician has a financial interest.93 Civil monetary penalties may be imposed for a variety of fraud-related activities, including violations of the Anti-Kickback Statute.94 Violators may be subject to exclusion from the federal health care programs, a potentially fatal blow for providers dependent on that revenue stream.95 Looming over all of these sanctions—and encouraging near-universal settlement of health care fraud allegations—is the specter of the enormous civil penalties available under the Civil False Claims Act.

While Caronia and the ongoing First Amendment debate over pharmaceutical commercial speech have caused a great deal of soul-searching within the academic and FDA practitioner communities, off-label FCA enforcement against pharmaceutical companies has proceeded largely untouched—generally in the absence of published case law, and without much judicial scrutiny.96 As illustrated by Table 1, in the months both leading up to and after Caronia, companies continued to enter into multi-million- and even billion-dollar settlements, many of them based on allegations that the companies caused false Medicare and Medicaid claims to be submitted by promoting their products for off-label uses. While some of these settlements were near completion before Caronia (including those involving Pfizer,

91 State law may also allow non-physician health care professionals such as nurse practitioners or

physician assistants to prescribe drugs under certain circumstances. See, e.g., N.C. GEN. STAT. § 90-18.2(b) (2011) (nurse practitioner prescribing authority).

92 Andrea M. Sisko et al., National Health Expenditure Projections, 2013-23: Faster Growth Expected with Expanded Coverage and Improving Economy, 33 HEALTH AFF. 1841, 1843–45 (2014).

93 Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) (2015); Stark Law, 42 U.S.C. § 1395nn (2010).

94 Civil Monetary Penalties, 42 U.S.C. § 1320a–7a (2015).

95Exclusion of Certain Individuals and Entities from Participation in Medicare and State Health Care Programs, 42 U.S.C. § 1320a-7 (2015).

96 See Osborn, supra note 31, at 327–28 (attributing lack of contested litigation to application of the exclusion authority to pharmaceutical manufacturers).


Amgen, and Sanofi), other negotiations appear to have been undertaken after the Second Circuit’s views were made clear.

Table 1: Post-Caronia Pharmaceutical Settlements

Date Company Settlement Terms Allegations 1/5/2012 Actavis Group $118 million False pricing 2/8/2012 Dava Pharmaceuticals $11 million Misreporting drug

prices 2/28/2012 Mylan Inc. $57 million False pricing 3/23/2012 Eusa Pharma (USA) $180,000 Inflated Medicare

claims (radiopharmaceutical)

3/28/2012 Cypress Pharmaceuticals $2.8 million Marketing products not approved as safe and effective by FDA

4/26/2012 McKesson Corp. $190 million Inflating pricing information

5/7/2012 Abbott Laboratories $1.5 billion ($800 million civil)

Off-label marketing, kickbacks

7/2/2012 GSK $3 billion ($2 billion civil) Off-label marketing, false and misleading statements regarding safety, false price, and underpaying Medicaid rebates, kickbacks

10/2/2012 Abbott Laboratories $800 million Off-label marketing, kickbacks

10/25/2012 Boehringer Ingelheim $95 million Off-label marketing, kickbacks

12/3/2012 United States v. Caronia Conviction overturned 703 F.3d 149 (2d. Cir. 2012)

12/6/2012 Healthpoint Ltd. $48 million Unapproved drug (FCA)

12/12/2012 Pfizer $55 million (civil disgorgement)

Off-label marketing

12/19/2012 Amgen $762 million ($612 million FCA)97

Off-label marketing, kickbacks, false price

12/19/2012 Sanofi U.S. $109 million (civil) Kickbacks, false price

12/29/2012 Victory Pharma Inc. $11.4 million ($1.4 million Anti-Kickback, criminal forfeiture; $10 million FCA)

Kickbacks

3/5/2013 Par $45 million ($22.5 million civil)

Off-label marketing

4/16/2013 Amgen $24.9 million Kickbacks 5/13/2013 Ranbaxy $500 million ($350 million

civil) Adulterated drugs

97 Amgen recently agreed to pay an additional $71 million to settle state off-label allegations. Stuart

Pfeifer, Amgen to Pay $71 Million to States for Promoting Off-Label Drug Uses, L.A. TIMES (Aug. 18, 2015), http://www.latimes.com/business/la-fi-amgen-settlement-20150818-story.html.


5/24/2013 ISTA Pharmaceuticals $33.5 million ($15 million civil)

Kickbacks, off-label

7/11/2013 Amgen $15 million Kickbacks 7/18/2013 Mallinckrodt LLC $3.5 million Kickbacks 7/30/2013 Wyeth Pharmaceuticals $490.9 million ($257.4

million civil) Off-label marketing

11/4/2013 Johnson & Johnson $2.2 billion ($1.391 billion civil)

Off-label marketing, kickbacks

12/27/2013 Abbott Laboratories $5.475 million Kickbacks 1/9/2014 CareFusion Corp. $40.1 million Off-label marketing,

kickbacks 2/21/2014 Endo Pharmaceuticals,

Endo Health Solutions $192.7 million ($171.9 million civil)

Off-label marketing

3/11/2014 Teva Pharmaceuticals, IVAX LLC

$27.6 million Kickbacks

4/16/2014 Astellas Pharma US $7.3 million Off-label marketing 9/24/2014 Shire Pharmaceuticals $56.5 million Off-label marketing,

misleading statements about efficacy and abuse, unsupported claims

1/9/2015 Daiichi Sankyo Inc. $39 million Kickbacks 2/11/2015 AstraZeneca $7.9 million Kickbacks 6/17/2015 Inspire Pharmaceuticals $5.9 million Off-label marketing 7/30/2015 NuVaise Inc. $13.5 million Off-label marketing

(medical device) 11/20/2015 Novartis $390 million ($370 million

civil) Kickbacks

5/12/2016 (preliminary)

Aegerion Pharmaceuticals $40 million Misbranding (off-label claims), SEC violations

Source: U.S. Department of Justice, Office of Public Affairs, http://www.justice.gov/briefing-room (last visited May 17, 2016). See Appendix for further details.

From a narrow legal perspective, perhaps this is not surprising. Caronia did not involve the FCA, and the Amarin court found the plaintiff’s request for protection from FCA liability to be unripe for consideration.98 But logically, if manufacturers have a First Amendment right to discuss truthful off-label indications of their products, it is difficult to see how claims submitted when the drugs are used for those indications can be considered false. As commentators have argued, “Caronia makes clear that if promotional statements about a product are true and scientifically supported, FDA cannot prohibit this truthful, non-misleading speech. Therefore it follows that neither can a sister agency of FDA use that same speech to recover hundreds of millions of dollars.”99

For both legal and strategic reasons, however, these FCA settlements are likely to continue, at least given the juxtaposition of the FDA approval process and current Medicare/Medicaid coverage rules. If manufacturers are emboldened by Caronia to

98 Amarin Pharma, Inc. v. FDA, 119 F. Supp. 3d 196, 221 (S.D.N.Y. 2015).

99 Jeffrey N. Wasserstein et al., A Deep Dive into the Second Circuit’s Caronia Decision, Potential Next Steps, and Potential Enforcement Fallout, FOOD & DRUG ADMIN. L. BLOG (Dec. 12, 2012, 1:37 AM), http://www.fdalawblog.net/fda_law_blog_hyman_phelps/2012/12/a-deep-dive-into-the-second-circuits-caronia-decision-potential-next-steps-and-potential-enforcement.html.


challenge these FCA prosecutions, as many predict, the resulting litigation may well turn on the truth or falsity of the statements the company makes about its drugs. Yet despite its name, the FCA is particularly unsuited to resolving disputes over scientific and medical information.

A. The Civil False Claims Act

The roots of the FCA lie in the 1863 “Informer’s Act,” designed to prohibit fraud on the Union Army during the Civil War.100 The law was not designed to address health care fraud, a concept that would have been foreign to the drafters in the midst of an internal war. While originally concerned with such mundane acts as substituting sand for gunpowder sold to Union troops,101 the statute has evolved into a powerful civil weapon against fraud in the federal health care programs. The FCA prohibits a variety of activities beyond the bare submission of false claims, including making or using false records or statements, conspiracies to submit false claims, and so-called “reverse” false claims that understate an obligation to (re)pay the federal government.102 Prior to August 2016, violations were subject to civil penalties of $5,500 to $11,000 per claim, plus three times the government’s damages; penalties assessed after August 1, 2016, are now $10,781 - $21,563 per claim.103 Combined with the threat of exclusion from federal health care programs, the FCA is perhaps the key reason health care providers often settle fraud allegations rather than taking their chances at trial.

B. From Off-Label Promotion to False Claim

For such a volatile legal issue, the pathway from off-label promotion to false claim is a remarkably convoluted one. Recall that a drug will be considered misbranded if its label is false, misleading, or fails to contain adequate directions for use, and by definition the label will not contain directions for an unapproved use. Moreover, even an approved drug may be considered “new” if it is promoted for an unapproved indication.104 While Medicare and Medicaid rules do not explicitly address off-label promotion, the programs rely heavily (although not exclusively) on FDA approval status to determine whether drugs will be covered. In essence, off-label promotion leads to a violation of the FCA on the somewhat circular theory that claims for non-covered drugs are false because the drugs are not being used for medically accepted (i.e., covered) purposes.

1. Theories of Falsity and Fraud Under the FCA

In the pharmaceutical context, the two most important FCA provisions are the basic false claims prohibition that applies when someone “knowingly presents, or

100 The original legislation was enacted as the Act of Mar. 2, 1863, ch. 67, 12 Stat. 696. See S. REP.

NO. 99-345, at 8 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5273. See generally Joan H. Krause, Health Care Providers and the Public Fisc: Paradigms of Government Harm Under the Civil False Claims Act, 36 GA. L. REV. 121, 121 (2001).

101 See, e.g., 144 CONG. REC. S7675-76 (daily ed. July 8, 1998) (statement of Sen. Grassley).

102 31 U.S.C. § 3729 (2009) et seq.

103 Id. at § 3729(a)(1); 28 C.F.R § 85.3(a)(9) (2014); Bipartisan Budget Act of 2015, Pub. L. No. 114-74, § 701, 129 Stat. 584, (2015); Civil Monetary Penalties Inflation Adjustment, 81 Fed. Reg. 42.491 (2016).

104 See supra Part I.A.


causes to be presented, a false or fraudulent claim for payment or approval,” and the false records prohibition that applies when someone “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.”105 FCA “knowledge” includes not only actual knowledge, but also deliberate ignorance or reckless disregard.106 The Fraud Enforcement and Recovery Act of 2009 (FERA) made several substantive changes to the FCA, adding the false records materiality requirement, broadening the definition of a claim, expanding the conspiracy prohibition, and applying reverse false claims to the retention of overpayments.107 The Patient Protection and Affordable Care Act (ACA) confirmed the relationship between the FCA and payments made in connection with the new Health Care Exchanges, and clarified that the knowing retention of an overpayment for more than 60 days after identification may be a reverse false claim.108

The broad reach of the FCA is due in part to the law’s qui tam provision, which permits a private relator who sues on the government’s behalf to share a portion of the proceeds of the case—fifteen to twenty-five percent if the government intervenes, twenty-five to thirty percent if not.109 After amendments in 1986 modernized the Act and made it more lucrative to pursue qui tam actions, the number of health care-related FCA suits has grown exponentially: two-thirds of the qui tam suits filed in 2013 raised allegations of fraud in the federal health care programs, compared to roughly ten percent in 1987.110 The qui tam mechanism ensures that FCA cases can be filed by a wide range of individuals and entities other than federal prosecutors, including competitors, employees, and even patients. Pharmaceutical representatives have proven to be a fruitful source of qui tam relators in off-label cases, filing suits that have led to some of the largest FCA settlements to date.

Historically, most health care FCA cases involved straightforward “factually false” misrepresentations, such as claims for services that were not in fact provided.111 But over time, both federal prosecutors and qui tam relators became more creative, invoking the law to apply as well to “legally false” claims where the items or services were provided, but where the claimant had also violated some underlying legal requirement.112 There is a long history of relators using legal falsity to apply the FCA to violations of unrelated laws that do not in themselves provide

105 31 U.S.C. § 3729(a)(1)(A) & (B). 106 Id. at § 3729(b).

107 Fraud Enforcement and Recovery Act of 2000, Pub. L. No. 111-21, 123 Stat. 1617 (2009).

108 Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, §§ 1313(a)(6) & 6402(a), 124 Stat. 119 (2010).

109 31 U.S.C. § 3730(d) (2010). The intervention decision may be lengthy. See, e.g., United States ex rel. Franklin v. Parke-Davis, 210 F.R.D. 257, 258 (D. Mass. 2002) (“[T]his action was filed in 1996 and the government has still not decided whether to intervene. Molasses moves more quickly.”).

110 DEP’T OF JUSTICE, FRAUD STATISTICS: OVERVIEW (2013), http://www.justice.gov/sites/default/files/civil/legacy/2013/12/26/C-FRAUDS_FCA_Statistics.pdf. For empirical analysis of qui tam litigation, see generally David Freeman Engstrom, Private Enforcement’s Pathways: Lessons from Qui Tam Litigation, 114 COL. L. REV. 1913 (2014); David Freeman Engstrom, Public Regulation of Private Enforcement: Empirical Analysis of DOJ Oversight of Qui Tam Litigation Under the False Claims Act, 107 NW. U.L. REV. 1689 (2013).

111 See, e.g., United States ex rel. Conner v. Salina Regional Health Ctr., Inc., 543 F.3d 1211, 1217 (10th Cir. 2008) (describing “a run-of-the-mill ‘factually false’ case”).

112 Id.


private rights of action, such as the Medicare and Medicaid anti-referral prohibitions113 – a model that squarely fits the FDCA as well.

There is a significant difference among the circuits, however, as to what constitutes a legally false claim. Courts have recognized two distinct theories of legal falsity. Under express certification, a claimant explicitly and “falsely certifies compliance with a particular statute, regulation, or contractual term, where compliance is a prerequisite to payment.”114 In contrast, under implied certification, the basic “act of submitting a claim for reimbursement itself implies compliance with governing federal rules,” even without any explicit certification.115 Where express certification requires a false statement of compliance as part of the claims submission process, implied certification extends to non-compliance with the myriad program conditions that are not reflected in any explicit compliance statement.

Recognizing that government programs impose thousands of conditions on participants, some critical and others merely clerical, the Second Circuit adopted a widely-cited “compliance-condition rule”116 that limits implied certification to violations of provisions that are clear prerequisites to government payment – rather than, for example, violations of less serious “conditions of participation” that may be resolved through administrative remedies short of refusing to pay.117 In contrast, the First Circuit has taken a broader view, asking instead whether the defendant “knowingly represented compliance with a material precondition of payment,” which need not be “expressly designated.”118 What “materiality” adds to the certification debate is a requirement that the defendant’s misrepresentation not only affect the legal entitlement to payment in theory, but also be important enough that it could have affected the government’s payment decision in practice.

The tests may sound similar, but differ both theoretically and functionally. First, defining implied certification by reference to “materiality” is curious in light of the fact that since FERA’s enactment in 2009, materiality has been an express—and distinct—element of the FCA false records and statements prohibition in § 3729(a)(1)(B). FERA defined materiality as “having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or

113 See Joan H. Krause, “Promises to Keep”: Health Care Providers and the Civil False Claims Act,

23 CARDOZO L. REV. 1363, 1394–1406 (2002).

114 United States ex rel. Mikes v. Straus, 274 F.3d 687, 698 (2d Cir. 2001). An expressly false certification should be actionable under the false records and statements provision in 31 U.S.C. § 3729(a)(1)(B).

115 Id. at 699.

116 Michael Holt & Gregory Klass, Implied Certification Under the False Claims Act, 41 PUB. CONT. L.J. 1, 22 (2011). Others have described this as a “condition precedent to payment” or a “precondition to payment” approach. See, e.g., Benjamin A. Dacin, Legal Materiality and the Implied Certification Theory of the False Claims Act: Why Courts Have Rejected the Traditional Standards of Materiality in Favor of a Precondition to Payment Requirement, 31 MSU J. MED. & LAW 31, 31 (2012); Rob Sneckenberg, The Importance of a Condition Precedent to Payment Requirement for Implied Certification Liability Under the Civil False Claims Act, J. CONT. MGT. 75, 75 (2012), http://staging.ncmahq.rd.net/docs/default-source/default-document-library/m/articles/jcm12---75-86.

117 See, e.g., Mikes, 274 F.3d at 700 (limiting implied certification to conditions of payment, and refusing to apply the theory to allegations that defendants’ failure to properly calibrate medical testing equipment rendered tests and resulting claims false).

118 United States ex rel. Escobar v. Universal Health Servs. Inc., 780 F.3d 504, 512 (1st Cir. 2015), cert. granted, 136 S. Ct. 1989 (2015) (emphasis added).


property.”119 Yet implied certification cases arise under the basic false claims provision in § 3729(a)(1)(A), which Congress did not similarly amend. While some courts have read materiality into that provision as well,120 there is a significant difference between invoking materiality as an alternate theory of falsity or fraud and imposing it as an additional element of the FCA cause of action.121

More importantly, while the compliance-condition approach requires a violation of a provision clearly identified as a precondition for payment, the materiality approach looks instead to the potential for the violation to affect the payment decision, even in the absence of any law or regulation linking that condition to payment. Although few courts defined the term with precision in the discussion of implied certification, many commentators believed the relatively weak “natural tendency to influence” definition of materiality would be extrapolated from the FERA false records amendment.122 This raised the possibility that a court’s interpretation of the effect of noncompliance, in the abstract, might be very different from that of the regulatory agency that oversees the program (such as CMS), potentially leaving the defendant caught in the middle. The distinctions —express vs. implied, payment vs. participation, materiality vs. condition precedent to payment— were intertwined and interdependent, at times interpreted in ways so circular as to nearly collapse.123

The confusion reached the breaking point in 2015, with no fewer than four major federal appellate courts issuing implied certification decisions. Similar to the First Circuit’s “material precondition of payment” approach,124 the Fourth Circuit applied the theory to the knowing failure to comply with a material contractual requirement.125 In contrast, the Seventh Circuit rejected the theory entirely as applied to “the thousands of pages of federal statutes and regulations incorporated by reference into the PPA”126 while the D.C. Circuit explicitly limited the theory to compliance with clear conditions of payment.127 In December 2015, the Supreme Court granted certiorari in the First Circuit Universal Health Services case.128

In June 2016, the Court offered a modicum of guidance in a unanimous opinion written by Justice Thomas, affirming the validity of the implied certification theory: in situations where a defendant “makes specific representations about the goods or services provided, but knowingly fails to disclose . . . noncompliance with a statutory, regulatory, or contractual requirement[,] . . . liability may attach if the

119 31 U.S.C. §§ 3729(a)(1)(B) & (b)(4) (2009) (emphasis added). For a discussion of materiality

prior to the passage of FERA, see Krause, supra note 100, at 189–200.

120 See, e.g., Hooper v. Lockheed Martin Corp., 688 F.3d 1037, 1047 (9th Cir. 2012).

121 See, e.g., Dacin, supra note 116, at 51; Sneckenberg, supra note 116, at 79. 122 31 U.S.C. § 3729(b)(4); see also Sneckenberg, supra note 116, at 78–79.

123 See, e.g., Holt & Klass, supra note 116, at 22–23, 30–32 (describing an alternate “certification-condition” approach, used by some courts, that appears to conflate the express and implied certification theories).

124 United States ex rel. Escobar v. Universal Health Servs., 780 F.3d 504, 512 (1st Cir. 2015), cert. granted 136 S. Ct. 582 (2015).

125 United States ex rel. Bard v. Triple Canopy, Inc., 775 F.3d 628, 636 (4th Cir. 2015).

126 United States v. Sanford-Brown, Ltd., 788 F.3d 696, 711–12 (7th Cir. 2015).

127 United States ex rel. Davis v. District of Columbia, 793 F.3d 120, 124–25 (D.C. Cir. 2015). 128 Escobar, 780 F.3d at 504.


omission renders those representations misleading.”129 The Court agreed that such misrepresentations must be “material to the Government’s payment decision,” but warned that materiality is a “demanding” test; because the First Circuit had used an impermissibly broad standard, the Court reversed and remanded.130 Curiously, although they declined to provide a clear definition of materiality, the Justices rejected essentially all of the tests adopted by the various circuit courts. Grounding the concept instead in the common law, the Justices held that the essence of materiality is the effect of the misrepresentation on the government: either that a reasonable person would find the misrepresentation important to the payment decision, or that the defendant knew the government actually did so.131 The opinion thus offered something of a compromise, affirming implied certification on a materiality basis but imposing a more stringent standard than prior precedent would have suggested. In the long run, however, the decision is likely to satisfy no one and to raise as many questions as it answers, and future challenges may be anticipated – perhaps in off-label cases.

2. Putting the Pieces Together

Federal health care program reimbursement rules provide the crucial links between FDA limitations on off-label promotion and the (still unsettled) FCA theories of falsity and fraud. Medicare and Medicaid drug coverage rules are not identical, and have evolved over time to reflect both the different structures of the programs and advancements in medical knowledge. Medicaid, for example, allows states some leeway over drug coverage, while Medicare has established different rules for coverage in inpatient settings (Part A), when drugs are administered to patients in outpatient settings (Part B), and for self-administered drugs purchased through private Medicare plans (Part C) and voluntary Part D prescription drug plans.132 In general, however, coverage is restricted to “medically accepted” indications, which include those for which the drug (a) has been approved by FDA or (b) is recognized in specific compendia of medical research regarding prescription drugs.133

These prohibitions, however, are far from comprehensive. For example, recognizing that off-label use may in some cases be the standard of care, many states

129 Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U.S. __, No. 15-7 slip op. at

1-2 (S. Ct., June 16, 2016). 130 Id. at 2, 17.

131 Id. at 14–15.

132 See, e.g., 42 U.S.C. § 1395x(s)(2) (2015) (limiting Medicare Part B coverage, inter alia, to drugs that are not usually self-administered by the patient and are furnished as an incident to a physician’s professional service); 42 U.S.C. § 1396r-8(d)(1) (2015) (permitting states to limit Medicaid drug coverage, including coverage of covered outpatient drugs not used for medically accepted indications); Medicare Benefit Policy Manual, CTRS FOR MEDICARE & MEDICAID SERVS. ch. 1, § 30 (Rev. 189, June 27, 2014), http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c01.pdf (last visited May 4, 2016) (addressing Medicare Part A coverage of drugs in the hospital setting).

133 The Medicaid statute, for example, excludes a drug “used for a medical indication which is not a medically accepted indication” from the definition of a “covered outpatient drug,” and defines a medically accepted indication as a use approved by FDA or “which is supported by one or more citations included or approved for inclusion in” the specified compendia. 42 U.S.C. §§ 1396b(i)(1) (2015), 1396r-8(k)(3) & (6). The Medicare Part D prescription drug benefit program adopts these definitions, 42 U.S.C. § 1395w-102(e)(4)(A)(ii) (2010); see also 42 U.S.C. § 1395x(t)(2)(B) (2015) (defining compendia).


provide some degree of Medicaid coverage for uses falling outside the compendia.134 Medicare similarly permits broader coverage in situations where clinical evidence supports an off-label use as medically accepted, such as through a national coverage determination or local medical review policy. Indeed, at least with regard to Medicare Part A, “[a]s long as FDA has not specified such use as non-approved, coverage is determined taking into consideration the generally accepted medical practice in the community.”135 Nor are the prohibitions enforced consistently. The OIG has concluded that individual prescription drug plans have done a poor job of assuring that Part D reimbursement is limited to medically accepted drug indications.136 In fact, even the seemingly straightforward requirement that the off-label use appear in an accepted compendium may be misleading: one of the government’s allegations against Amgen in the off-label case settled in 2012 was that the company “improperly obtained listings in medical compendia in an effort to establish that the off-label uses were medically accepted, and thereby eligible for coverage.”137

In part because of this variation, these coverage provisions do not fit easily into the taxonomy of FCA falsity and fraud. Off-label cases do not raise traditional allegations of factual falsity, as long as the drugs actually were prescribed and delivered to the patient. Moreover, the few courts that have reached the issue of legal falsity, usually on a motion to dismiss, have concluded that adherence to the FDA’s guidance regarding off-label promotion is not in itself a condition of Medicare or Medicaid payment; based on the Court’s decision in Universal Health Services, the same result may well apply under the materiality analysis.138 Because some off-label uses are not reimbursable, however, courts have been open to allegations that invoke the essence of a false claim: asking for payment to which the claimant is not entitled. As one district court explained, “the falsity here lies in the submission of non-

134 See 42 U.S.C. § 1396r-8(d) (2015) (state limitations on drug coverage); United States ex rel.

Franklin v. Parke-Davis, No. 96-CV-11651, 2003 WL 22048255, at *2 (D. Mass. Aug. 22, 2003) (noting defendant’s allegations that 42 states permit some “off-label, non-compendium” coverage).

135 Ctrs. for Medicare & Medicaid Servs., supra note 129, at ch. 1, § 30; 42 U.S.C. § 1395x(t)(2)(B)(II) (2015) (permitting carrier to determine that a “use is medically accepted based on supportive clinical evidence in peer reviewed medical literature”); Ralph F. Hall & Robert J. Berlin, When You Have a Hammer Everything Looks Like a Nail: Misapplication of the False Claims Act to Off-Label Promotion, 61 FOOD & DRUG L.J. 653, 657–58 (2006) (discussing available processes for obtaining off-label Medicare coverage).

136 Ensuring That Medicare Part D Reimbursement is Limited to Drugs Provided for Medically Accepted Indications, DEP’T OF HEALTH & HUMAN SERVS. (Nov. 24, 2011), available at https://oig.hhs.gov/oei/reports/oei-07-08-00152.pdf.

137 Amgen Inc. Pleads Guilty to Federal Charges in Brooklyn, N.Y.; Pays $762 Million to Resolve Criminal Liability and False Claims Act Allegations, U.S. DEP’T JUSTICE (Dec. 19, 2012), http://www.justice.gov/opa/pr/amgen-inc-pleads-guilty-federal-charge-brooklyn-ny-pays-762-million-resolve-criminal (last updated Oct. 22, 2014); see also Lindsay Gabrielsen, Note, Bias at the Gate?: The Pharmaceutical Industry’s Influence on the Federally Approved Drug Compendia, 40 AM. J. L. & MED. 141 (2014); 42 U.S.C. § 1395x(t)(2) (2015) (requiring as of January 2010 that each compendium have “a publicly transparent process for evaluating therapies and for identifying potential conflicts of interest”).

138 See, e.g., United States ex rel. Brown v. Celgene Corp., No. 10-CV-3165, 2014 WL 3605896, at *1 (C.D. Cal., July 10, 2014); Universal Health Servs., slip op. at 15–16. Often, the court does not reach the merits of the certification dispute, finding that the relator has failed to allege fraud with particularity under Fed. R. Civ. P. 9(b). See, e.g., United States ex rel. Bilotta v. Novartis Pharm. Corp., 50 F. Supp. 3d 497, 552 (S.D.N.Y. 2014).


reimbursable claims, not in [the company’s] off-label promotion alone.”139 The off-label FCA theory is thus both elegant and circular: off-label promotion leads to the knowing submission of false claims for products that are not covered because they are not being used for covered, medically accepted indications. The theory is a limited one, applying by definition only to claims for indications that are not covered by the federal health care programs. The core question under the FCA is coverage, not the truth or falsity of the company’s statements of scientific support for any particular off-label use.

This convoluted theory is confusing enough when applied to the physician or pharmacist who actually submits a claim, but here it requires one further leap: the tie to the manufacturer engaged in the off-label promotion. Although manufacturers themselves do not submit claims to Medicare and Medicaid, the FCA also applies to those who “cause” false or fraudulent claims to be submitted, or cause a false record or statement to be made.140 Accordingly, when manufacturer promotional activities influence physicians to prescribe a drug for off-label uses not covered under Medicare or Medicaid, and claims for those uses are submitted for reimbursement, those claims may be considered false. If the manufacturer has acted with knowledge of that falsity – or with at least reckless disregard or in deliberate ignorance – the company may have caused the submission of false claims.

Historically, this “cause-to-be-presented” theory was used to reach situations where the person responsible for the falsity did not actually submit the claim, but rather directed or encouraged others (who might not have been aware of it) to do so – as in a typical employer/employee or contractor/subcontractor relationship.141 Extension of this theory to actions that supposedly influence an independent professional to act, such as a physician’s choice to prescribe a drug to a particular patient for an off-label use, is far more controversial. Critics argue that the physician’s independent decision to prescribe a drug should suffice to break the chain of causation leading back to the company.142 To the extent only an unforeseeable intervening force usually is considered to break that chain, however, the fact that physicians might decide to prescribe the drug after receiving the information may be completely foreseeable to the company – if not in fact the desired goal.143

139 Brown, 2014 WL 3605896, at *4. 140 31 U.S.C. § 3729(a)(1)(A) & (B).

141 See, e.g., United States v. Bornstein, 423 U.S. 303, 312–13 (1976) (supplier provided falsely labeled radio tubes to contractor, knowing contractor would incorporate tubes into radios sold to government).

142 See, e.g., Hall & Berlin, supra note 132, at 665–68; Isaac D. Buck, Side Effects: States Anti-Fraud Statutes, Off-Label Marketing, and the Solvable Challenge of Causation, 36 CARDOZO L. REV. 2129, 2133 (2015). The Supreme Court declined to take up this issue in 2011. See United States ex rel. Hutcheson v. Blackstone Med. Inc., 647 F.3d 377, 380 (1st Cir. 2011), cert. denied, 135 S. Ct. 815 (2011).

143 As one court noted, “In this case . . .the participation of doctors and pharmacists in the submission of false Medicaid claims was not only foreseeable, it was an intended consequence of the alleged scheme of fraud.” United States ex rel. Franklin v. Parke-Davis, 147 F. Supp. 2d 39, 52–53 (D. Mass. 2001). The legal argument may now be easier, as FERA relaxed the definition of a “claim” to require only a broad nexus to government payment. See S. 386, 111th Cong. (2009) (amending 31 U.S.C. § 3729(b)(2)).


Proof of causation raises significant factual as well as legal questions. Although there is some empirical evidence to the contrary,144 many physicians are not convinced (and indeed may be rather offended) by the idea that drug companies dictate their prescribing decisions. While this reluctance may be dismissed as mere wishful thinking, it raises a valid practical point: identifying the totality of false claims resulting from an off-label promotional scheme is nearly impossible. The basic problem is that diagnostic information is not required on most Medicare and Medicaid outpatient prescriptions, leading to what Professor Jennifer Herbst has called a significant “information gap” that makes “real-time review for coverage eligibility impossible.”145 While it should be possible to identify the universe of federal health care program prescriptions for a particular drug, a complete causal analysis would require review of individual medical records to identify patients who were prescribed the drug specifically for an off-label indication. That group would have to be winnowed further by the perhaps unanswerable question of whether each prescribing physician had been influenced by the manufacturer’s marketing efforts, or would have prescribed the drug regardless based on his or her independent medical judgment.146 Because virtually all of these cases settle, there is very little FCA case law on point beyond the motion-to-dismiss stage.147

The first major off-label FCA case was brought by David Franklin, a former medical liaison for the Parke-Davis division of Warner-Lambert.148 Franklin alleged that the company “engaged in an extensive and far-reaching campaign to use false statements to promote increased prescriptions of Neurontin [a supplemental anti-epileptic therapy] . . . for off-label uses which caused the filing of false claims for reimbursement by the federal government.”149 In denying the defendant’s motion to dismiss for failure to state a claim, the district court succinctly summarized the underlying theory of fraud: “the alleged FCA violation arises—not from unlawful off-label marketing activity itself—but from the submission of Medicaid claims for

144 See, e.g., E.C. Halperin et al., A Population-Based Study of the Prevalence and Influence of Gifts

to Radiation Oncologists from Pharmaceutical Companies and Medical Equipment Manufacturers, 59 INTL. J. RADIATION ONCOLOGY & BIOLOGY PHYSICIANS 1477, 1479 (2004); M.M. Chren & C.S. Landefeld, Physicians’ Behavior and their Interactions with Drug Companies: A Controlled Study of Physicians Who Requested Additions to a Hospital Drug Formulary, 271 JAMA 684, 684 (1994) (finding that physicians who met with and accepted gifts from drug companies were more likely to ask that the company’s drugs be added to the hospital formulary).

145 Herbst, supra note 35, at 213–15 (“Medicare Part B, which covers a more limited universe of drugs generally administered to patients in an outpatient setting, requires such information.”); see also, Franklin, 2003 WL 22048255, at *4.

146 See, e.g., Joan H. Krause, A Patient-Centered Approach to Health Care Fraud Recovery, 96 J. CRIM. L. & CRIMINOLOGY 579, 617 (2006) (noting why such cases often result in the establishment of broad consumer funds rather than compensation to individual patients).

147 See, e.g., Franklin, 147 F. Supp.2d at 52–53. A few courts have allowed economic analysis to prove the aggregate causal chain in similar off-label allegations arising under RICO. See, e.g., In re Neurontin Marketing and Sales Pract. Litig., 712 F.3d 21, 22 (1st Cir. 2013). Causation may also be difficult to prove under Fed. R. Civ. P. 9(b), which requires that fraud be plead with particularity; some courts warn that “it is not sufficient to allege merely that the alleged scheme could have led, but need not necessarily have led, to the submission of false claims.” United States ex rel. Nathan v. Takeda Pharm. North Am., Inc., 707 F.3d 451, 457–58 (4th Cir. 2013) (emphasis in original).

148 Franklin, 147 F. Supp. 2d at 39. 149 Id. at 45.


uncovered off-label uses induced by Defendant’s fraudulent conduct.”150 Noting that the allegations centered on false statements made to physicians, the court acknowledged that “[a] much closer question would be presented if the allegations involved only the unlawful—yet truthful—promotion of off-label uses to physicians who provide services to patients who are covered by Medicaid . . . without any fraudulent representations by the manufacturer.”151

In a later opinion, the district court addressed the Medicaid coverage rules and causation.152 While acknowledging the company’s argument that many states did in fact permit reimbursement for off-label drug uses not contained in the compendia, and that such claims would not necessarily be false, the court pointed out that other states clearly did not permit such reimbursement. Because claims filed in the latter states would be false under the relator’s theory, the court refused to grant summary judgment for the defendant, finding the disagreement more relevant to the calculation of damages.153 With regard to the causation issue, the court bluntly noted that the relator had “presented evidence showing that it was foreseeable that Parke-Davis’s conduct . . . would ineluctably result in false Medicaid claims.”154 In May of 2004, defendant Warner-Lambert entered into a $430 million settlement with the Department of Justice, with relator Franklin receiving $24.64 million as his share of the recovery.155

3. Settlement Concerns

After Franklin and the subsequent Warner-Lambert settlement, the off-label FCA theory proved to be quite successful for the government and relators alike. According to Public Citizen, between 1991 and July of 2012, pharmaceutical companies entered into 239 fraud settlements totaling $30.2 billion.156 Off-label allegations accounted for fourteen of the twenty largest pharmaceutical settlements and judgments, with ten of those originating as qui tam cases.

Critics have argued that Caronia and Amarin fundamentally change that dynamic, as it is illogical simultaneously to prohibit FDA from restricting off-label promotional speech while allowing astronomical FCA awards based on that same speech. While several ongoing FCA lawsuits involve off-label allegations, the decisions thus far have been limited to preliminary motions; given the myriad FCA procedural requirements, it is possible these suits will be resolved on other grounds without ever reaching the FCA/First Amendment interplay.157 To the extent courts

150 Id. at 52.

151 Id.

152 United States ex rel. Franklin v. Parke-Davis, No. 96-CV-11651, 2003 WL 22048255, at *1 (D. Mass. Aug. 22, 2003).

153 Id. at *3.

154 Id. at *5.

155 Warner-Lambert to Pay $430 Million to Resolve Criminal & Civil Health Care Liability Relating to Off-Label Promotion, U.S. DEP’T JUSTICE (May 13, 2004), https://www.justice.gov/archive/opa/pr/2004/May/04_civ_322.htm.

156 Sammy Almashat & Sidney Wolfe, Pharmaceutical Industry Criminal and Civil Penalties: An Update, PUBLIC CITIZEN (Sept. 27, 2012), http://www.citizen.org/documents/2073.pdf.

157 See, e.g., United States ex rel. Cestra v. Cephalon, Inc., No. 14-CV-1842, 2015 WL 3498761, at *6 (E.D. Pa. June 3, 2015) (refusing to dismiss allegations under First Amendment); United States ex rel.


are willing to consider the validity of the off-label FCA theory in light of Caronia, one pharmaceutical defendant has argued that the causation element must rest by definition on what company representatives say:

Because it is the “marketing” that allegedly “causes” the false claim, and because it is this “causation” that is the alleged violation of the FCA . . . , it is this “marketing” that is sought to be sanctioned here under the FCA . . . . [I]t is the speech itself – the off-label marketing – that is alleged to be the unlawful “causation” which renders [the company] liable for alleged false claims for reimbursement for lawful off-label use submitted by physicians.158

The government, of course, vigorously disagreed, characterizing the FCA as “a remedy for actions that cause the submission of a false claim for payment to the Government” rather than for any underlying statements.159

As Table 1 suggests, the rate of off-label settlements has slowed somewhat since 2012 and 2013, although it is unclear how to interpret that data.160 There are many reasons why these cases may fall out of favor, ranging from deliberate changes in promotional practices to the ripple effects of Caronia itself.161 Given the length of time a qui tam suit typically remains under seal, however, it is far too soon to tell whether this trend represents a permanent decline or merely a temporary lull while filed cases make their way through the system.

While the rate of off-label filings and settlements may have abated somewhat, these cases are likely to remain a threat to the industry for reasons that are as much strategic as jurisprudential. The most significant reason, of course, is the fact that both the government and drug manufacturers remain willing to settle. For the government, a settlement provides a guaranteed recovery without the risk of a loss in court—and it is worth noting that the government has lost some high-profile health care fraud trials in recent years.162 Moreover, at least prior to Caronia, the government successfully used the FCA settlement process to force companies to withdraw their First Amendment challenges to off-label restrictions, thus putting off the ultimate day of reckoning.163 For companies, of course, a settlement may help limit negative publicity, not to mention avoiding the possibility of the truly astronomical penalty that would result if every off-label claim for a particular drug

Solis v. Millennium Pharmaceuticals, Inc., 95 F. Supp. 3d 1208, 1220 (E.D. Cal. 2015) (dismissing complaint with respect to one defendant due to lack of jurisdiction).

158 Reply of Cephalon, Inc. to Statement of Interest of the United States of America, United States ex rel. Cestra v. Cephalon, Inc., No. 10-CV-6457, 2013 WL 6698175, at *3 (S.D.N.Y. Nov. 18, 2013).

159 Statement of Interest of the United States of America, United States ex rel. Cestra v. Cephalon, Inc., No. 10-CV-6457, 2013 WL 6698175, at *6 (S.D.N.Y. Nov. 7, 2013).

160 See supra Table 1.

161 See Kathleen M. Boozang, Charles A. Sullivan, & Kate Greenwood, THE FALSE CLAIMS ACT

AND THE POLICING OF PROMOTIONAL CLAIMS ABOUT DRUGS: A CALL FOR INCREASED TRANSPARENCY 5–11 (2015).

162 See, e.g., Federal Jury Acquits TAP Pharmaceutical Employees Accused of Paying Kickbacks to Doctors, Hospitals, KAISER HEALTH NEWS (June 11, 2009), http://kaiserhealthnews.org/morning-breakout/dr00024761/.

163 See, e.g., Allergan, supra note 74, at 2 (noting that FCA settlement required Allergan to dismiss its First Amendment lawsuit).


had to be multiplied by $11,000 (let alone $21,563). And the sad truth is that the amount of negotiated penalties often pales in comparison to the company’s profits, often on the same drug—a phenomenon that some commentators allege has transformed fraud and abuse exposure merely “into a cost of doing business” for large companies.164

Because so many of these cases begin as qui tam complaints, even in the unlikely event federal prosecutors chose to refrain from filing (or declined to intervene in) off-label FCA cases in a post-Caronia world, qui tam suits will continue. Simply put, relators do not care—or at least not much—about FCA jurisprudence, balancing public policy considerations, or creating precedent unfavorable to the government over the long term.165 Pharmaceutical sales and marketing personnel have been a fruitful source of relators for off-label FCA allegations, as “the ability of regulators to detect and respond to inappropriate oral communications relies heavily on reports from insiders—physicians and other persons who receive the communications and company whistle-blowers who generate or learn of them.”166 The public release of data regarding pharmaceutical company payments to physicians and teaching hospitals through the Physician Payments Sunshine Act, enacted as part of the ACA, will only increase this phenomenon.167

In addition, FCA economics weigh heavily in favor of a continued stream of off-label suits. In a typical qui tam FCA suit, between fifteen and thirty percent of the proceeds will be awarded to the relator(s) who initiated the suit, with the remainder—as well as funds recovered from civil penalties and health care-related criminal fines and forfeitures—required by law to be deposited into the Medicare Part A Trust Fund.168 Those funds, in turn, are available for appropriation back to the Health Care Fraud and Abuse Control Account, a special expenditure account

164 William N. Sage, Fraud and Abuse Law, 282 JAMA 1179, 1180 (1999); see also Katrice Bridges

Copeland, Enforcing Integrity, 87 IND. L.J. 1033, 1033 (2012).

165 See, e.g., Dayna B. Mathew, The Moral Hazard Problem with Privatization of Public Enforcement: The Case of Pharmaceutical Fraud, 40 U. MICH. J.L. REFORM 281, 320–27 (2007) (discussing “the shortcomings of such qui tam made law”).

166 Mello et al., supra note 25, at 1558.

167 See id. at 1564; H.R. 3590, 111th Cong. § 6002 (2nd Sess. 2010); Open Payments, CTRS. FOR

MEDICARE & MEDICAID SERVS., http://www.cms.gov/openpayments/index.html (searchable database of payments) (last visited May 5, 2016). For a discussion of whether DOJ has the capacity to properly address this influx of qui tam litigation, see Engstrom, Public Regulation of Private Enforcement, supra note 110 (finding that while DOJ has the capacity to screen qui tam filings on the merits, it has not always done so).

168 See 31 U.S.C. § 3730(d) (2010) (discussing the range of awards for qui tam plaintiffs); 42 U.S.C. § 1395i(k)(2)(C)(iv) (2010) (authorizing the transfer of penalties and damages obtained in health care cases to the Trust Fund, with the exception of funds awarded to a relator, funds designated for restitution, or as otherwise authorized by law); see also Lise T. Spacapan & Jill M. Hutchinson, Prosecutions of Pharmaceutical Companies for Off-Label Marketing: Fueled by Government’s Desire to Modify Corporate Conduct or Pursuit of a Lucrative Revenue Stream?, 22 ANN. HEALTH L. 407, 410 (2013) (questioning whether the government is more interested in changing corporate conduct or simply “continuing to generate a windfall and substantial revenue stream . . . .”); Vicki W. Girard, Punishing Pharmaceutical Companies for Unlawful Promotion of Approved Drugs: Why the False Claims Act is the Wrong Rx, 12 J. HEALTH CARE L. & POL’Y 119, 128 (2009) (discussing DOJ’s financial incentives under FCA).


created to fund DOJ and OIG anti-fraud efforts.169 Appropriations to the Control Account are controlled by the Secretary of HHS and the Attorney General, who jointly certify the amounts necessary to fund anti-fraud programs each year within broad ranges set by Congress.170 Through this attenuated bounty system, the pharmaceutical industry essentially subsidizes federal fraud and abuse enforcement efforts. Given the alternatives, it is not in the interest of either party to shut down the funding pipeline.

Moreover, most FCA cases against pharmaceutical companies are not based solely on allegations of off-label marketing; some allege false price or safety data reporting, and many accuse the companies of paying kickbacks to induce physicians or pharmacists to increase sales of the drug for both on- and off-label uses.171 The $762 million Amgen settlement in December 2012, for example, involved not only accusations of unlawful promotion, but also alleged false price reporting and the offering of kickbacks designed to influence prescribing decisions.172 While basing FCA suits on kickbacks was at one point controversial, the ACA clarified that claims for items or services provided in violation of the Anti-Kickback Statute explicitly constitute false or fraudulent claims under the FCA.173 Although a few commentators have tried to argue that Caronia could raise doubts about the validity of Anti-Kickback allegations based primarily on sales representative speech, most prosecutions clearly focus on the conduct of paying or receiving illegal remuneration.174 The government appears to have recognized that kickbacks may raise fewer First Amendment issues; several of the most recent pharmaceutical suits rest heavily on kickback allegations rather than off-label promotion. Similarly, future prosecutions may attempt to avoid the entanglement of Caronia by focusing more closely on the FDCA statutory language, emphasizing “misbranding” and “intended use” rather than the colloquial and more controversial “off-label promotion.”175

169 42 U.S.C. § 1395i(k)(3) (2010) (describing appropriations to the Control Account); Krause, A Patient-Centered Approach to Health Care Fraud Recovery, supra note 143 (providing a detailed analysis of the disposition of these funds).

170 42 U.S.C. § 1395i(k)(3)(A)(i) (2010) (setting out the maximum amounts available to HHS and DOJ).

171 See Anti-Kickback Statute, 42 U.S.C. § 1320a-7(b) (2015).

172 Amgen Inc. Pleads Guilty to Federal Charges in Brooklyn, N.Y.; Pays $762 Million to Resolve Criminal Liability and False Claims Act Allegations, supra note 134.

173 42 U.S.C. § 1320a-7b(g) (2015).

174 See, e.g., Newcomer & Do, supra note 71, at 27–28, 33–34. The November 2015 Novartis settlement, for example, included allegations that “to incentivize the pharmacies to intensify their efforts to promote Exjade refills, NOVARTIS devised a scheme under which it allocated more patient referrals and gave higher rebates to pharmacies that obtained higher refill rates.” U.S. Attorney’s Office, Southern District of New York, Manhattan U.S. Attorney Announces $370 Million Civil Fraud Settlement Against Novartis Pharmaceuticals for Kickback Scheme Involving High-Priced Prescription Drugs, Along with $20 Million Forfeiture of Proceeds from The Scheme (Nov. 20, 2015), http://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-370-million-civil-fraud-settlement-against-novartis. But see W. Bradley Tully & Brett S. Leitner, United States v. Caronia: First Amendment Protects the Truthful and Nonmisleading Promotion of Off-Label Use of FDA Approved Drugs, 17 HEALTH CARE FRAUD RPT. (BNA) 62 (2013) (suggesting that Caronia will likely affect application of Anti-Kickback Statute to “a broad range of marketing related activity”).

175 See Erika Kelton, Off-Label Pharma Prosecutions Won’t Be Silenced by First Amendment Decision, FORBES (Jan. 4, 2013), http://www.forbes.com/sites/erikakelton/2013/01/04/off-label-pharma-prosecutions-wont-be-silenced-by-first-amendment-decision/#ed0b116645f7. As one example, the June 2015 settlement with Inspire Pharmaceuticals over the company’s marketing of the drug AzaSite focused


For these reasons, off-label FCA cases will to continue to be filed, and most likely settled. But what if, as some posit, the pharmaceutical industry is close to a tipping point? What happens if, or perhaps when, a manufacturer decides to rely on Caronia to fight these cases on First Amendment grounds? As explained below, the FCA simply is not the proper vehicle for resolving these cases on their scientific merits.176

IV. SEARCHING FOR TRUTH UNDER THE FCA

By its very name, the “False Claims Act” would appear to be a useful tool for addressing disputes over the truth or falsity of off-label information, with the corollary that only false promotion should be actionable. The commentary is replete with arguments that truthful manufacturer statements about off-label indications will cause, if anything, conduct that is perfectly legal for physicians: prescribing a drug off-label for a use that the physician judges to be appropriate.177 This truthful/untruthful speech divide permeates the off-label case law. Indeed, in refusing to dismiss the original off-label FCA allegations, the Franklin court recognized that “a much closer question” would have been raised if the allegations involved unlawful yet truthful statements by the company.178

The Caronia majority repeatedly characterized Caronia’s speech as “truthful.” Rather than a decision on the merits of the scientific validity of the statements, however, this appears to be a reflection of litigation strategy: the government chose not to challenge the truth of the statements, apparently trusting that the promotional nature of the speech was sufficient to make it unlawful.179 As the majority warned, “off-label promotion that is false or misleading is not entitled to First Amendment

on marketing efforts that “misleadingly focused on purported anti-inflammatory properties of [the drug] that were unsupported by substantial evidence or substantial clinical experience.” U.S. Attorney’s Office, Southern District of New York, Manhattan U.S. Attorney Settles Civil Fraud Claims Against Inspire Pharmaceuticals, Inc. For Its Misleading Marketing Designed to Cause Prescriptions of AzaSite for Non-FDA Approved Uses (June 17, 2015), http://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-settles-civil-fraud-claims-against-inspire-pharmaceuticals-inc. The phrase “off-label” did not appear in the press release. See also Ed Silverman, Aegerion to Pay $40M and Plead Guilty to Illegally Marketing Cholesterol Drug, STAT (May 12, 2016), https://www.statnews.com/pharmalot/2016/05/12/aegerion-settlement-40-million/ (discussing misbranding allegations based on remarks made by CEO suggesting that cholesterol drug would also reduce risk of heart attack and death).

176 In addition, the efficacy of utilizing the FCA to reduce off-label use is questionable. See, e.g., Aaron S. Kesselheim et al., False Claims Act Prosecution Did Not Deter Off-Label Use in the Case of Neurontin, 30 HEALTH AFFAIRS 2318, 2318 (2011) (finding that off-label usage of the drug continued to increase during the investigation and did not decline until after the settlement).

177 See, e.g., Hall & Berlin, supra note 132, at 664 (“Inducing a legal action doesn’t satisfy any of the elements of a FCA case and should not be actionable.”).

178 United States ex rel. Franklin v. Parke-Davis, 147 F. Supp.2d 39, 52 (D. Mass. 2001). Similar issues arose in U.S. v. Harkonen, where a former company CEO was convicted of wire fraud based on allegations that he had made false and misleading statements in a press release regarding support for an off-label use of one of the company’s drugs. The courts rejected the defendant’s argument that he was participating in a “genuine scientific debate” outside the purview of the statutes, because the jury found that he had issued the press release with the specific intent to defraud. 510 Fed.Appx. 633, 637 (9th Cir. 2013).

179 United States v. Caronia, 703 F.3d 149, 166 (2d. Cir. 2012) (“The government did not argue at trial, nor does it argue on appeal, that the promotion in question was false or misleading.”); Greene, supra note 32, at 683 (“[T]he truthfulness of Caronia’s statements was never at issue in the trial because the government believed it needed to show only that he promoted the drug for an off-label use.”).


protection . . . [and] a defendant may be prosecuted for untruthfully promoting the off-label use of an FDA-approved drug, e.g., making false or misleading statements about a drug.”180 The court’s conclusion is curious in light of the fact that Caronia’s statement that Xyrem had successfully been used in patients as young as fourteen years old directly contradicted the black box warning against using the drug in patients under sixteen, which the court characterized as “the most serious warning placed on prescription medication labels.”181 If a statement made in direct contradiction of the strongest FDA-mandated warning isn’t false, or at the very least misleading, what exactly would be?

Attempting to resolve the truth or falsity of promotional claims by way of the FCA evinces a fundamental (albeit widespread) misconception over what exactly must be false for the statute to apply. FCA liability rests on the submission of a false or fraudulent claim, which in turn rests on whether or not the claim was eligible for reimbursement. Industry critics argue that the truth or falsity of the claim often cannot be determined without considering the truth or falsity of the manufacturer’s underlying scientific statements about that use. While this might be true of the § 3729(a)(1)(B) false records provision, which prohibits making or using (i) a false record or statement that is (ii) material to a false or fraudulent claim, the argument misstates the elements of the basic § 3729(a)(1)(A) false claim prohibition. As the Franklin court explained:

Under Parke-Davis’s interpretation, the FCA contains a double falsehood requirement . . . . Parke-Davis’s legal argument is inconsistent with the text of the FCA . . . . [T]here is no double falsehood requirement under [§ 3729(a)(1)(A)] . . . . [T]he only issue is whether Parke-Davis “caused to be presented” a false claim, and § 3729 does not require that the “cause” be fraudulent or otherwise independently unlawful.182

In a Statement of Interest filed in an ongoing FCA suit against Millennium Pharmaceuticals, the Department of Justice was more succinct: “The question of whether a claim is false depends only on whether the claim was eligible for payment in light of the applicable law.”183 The crucial question, then, is not the truth or falsity of what was said to a physician, but rather whether the resulting claim was eligible for payment. Put another way, the FCA is not concerned with a metaphysical concept of Truth writ large, but rather with whether or not the claimant truthfully complied with the criteria for reimbursement. Indeed, this theory equally should reach someone who knowingly submits a claim for a non-covered on-label use, such as one precluded by a national coverage decision.184

While the FCA might appear to be the perfect vehicle for addressing the truth or falsity of promotional statements, a long line of cases is to the contrary. Courts have

180 Caronia, 703 F.3d at 165–66. 181 Id. at 155.

182 United States ex rel. Franklin v. Parke-Davis, No. 96-CV-11651, 2003 WL 22048255, at *1–2 (D. Mass. Aug. 22, 2003).

183 United States’ Statement of Interest Regarding Certain Issues Raised in Defendants’ Motions to Dismiss the Relator’s First Amended Complaint Pursuant to Fed. R. Civ. P. 12(B)(6) at 8, United States ex rel. Solis v. Millennium Pharmaceuticals, Inc., No. 09-CV-3010 (E.D. Cal., filed Oct. 24, 2013).

184 But see Hall & Berlin, supra note 132, at 660 (characterizing such a result as “improbable”).


long held that the FCA is not an appropriate forum for debating issues of scientific merit. As the Ninth Circuit has recognized, “‘known to be false’ does not mean ‘scientifically untrue’; it means ‘a lie.’ . . . What is false as a matter of science is not, by that very fact, wrong as a matter of morals.”185 Similarly, a district court in Maryland observed, “[d]isagreements over scientific methodology do not give rise to False Claims Act liability.”186 Moreover, courts have recognized that FCA liability should not rest on an objectively reasonable interpretation of ambiguous requirements: “the FCA does not reach an innocent, good-faith mistake about the meaning of an applicable rule or regulation . . . . Nor does it reach those claims made based on reasonable but erroneous interpretations of a defendant’s legal obligations.”187 Such cases may fail on two distinct levels: disagreements over scientific or medical issues may not be enough to prove basic falsity or fraud, and the defendant’s good faith belief regarding the accuracy of its conclusion may be sufficient to defeat an allegation that any false claims were submitted knowingly.188

Courts similarly have rejected disputes over scientific integrity and methodology, which not coincidentally include some of the major implied certification cases described above (such as alleged violations of technical testing requirements).189 FCA suits that shift the focus of the dispute from the accuracy of the claim for payment to that of the underlying data regarding off-label use are precisely the types of scientific disagreement the statute is least capable of resolving, implicating both “learning patterns in the medical profession and deficiencies in the production and dissemination of clinical knowledge.”190 The scientific uncertainty is compounded by the legal uncertainty inherent in the FDA’s interpretation – an interpretation that has never been enacted into positive law, is based on guidance that has been in flux for several decades, and has been thrown into question by Caronia and Amarin.

In the off-label context, the crux of the problem is how to determine a pharmaceutical company’s good or bad faith regarding data that, by definition, have not met the FDA’s “substantial evidence” threshold for drug approval. The issue perhaps is easiest if the company misrepresents its scientific support for a new use,

185 Wang v. FMC Corp. 975 F.2d 1412, 1421 (9th Cir. 1992), overruled on other grounds by United

States ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121, 1122 (9th Cir. 2015).

186 United States ex rel. Milam v. Regents of the Univ. of Cal., 912 F. Supp. 868, 886 (D. Md. 1995). 187 United States ex rel. Purcell v. MWI Corp., 807 F.3d 281, 287–88 (D.C. Cir. 2015).

188 See, e.g., id. at 281 (holding that jury could not have found that defendant acted knowingly under the facts as presented); United States ex rel. Oliver v. Parsons Co., 195 F.3d 457, 464 (9th Cir. 1999) (“A contractor relying on a good faith interpretation of a regulation is not subject to liability . . .because the good faith nature of his or her action forecloses the possibility that the scienter requirement is met.”); United States ex rel. Geschrey v. Generations Healthcare LLC, 922 F. Supp. 2d 695, 703 (N.D. Ill. 2012) (disagreement with physician’s assessment about whether patient was hospice-eligible insufficient to support FCA suit).

189 See, e.g., United States ex rel. Mikes v. Straus, 84 F. Supp. 2d 427, 428 (S.D.N.Y. 1999) (rejecting allegations that failure to adhere to spirometry testing standards rendered defendants’ claims for services false); Luckey v. Baxter Healthcare Corp., 2 F. Supp. 2d 1034, 1037 (N.D. Ill. 1998) (rejecting allegations that blood products manufacturer submitted false claims by misrepresenting its compliance with plasma testing standards).

190 See Sandra H. Johnson, Polluting Medical Judgment? False Assumptions in the Pursuit of False Claims Regarding Off-Label Prescribing, 9 MINN. J.L. & TECH. 61, 61 (2008).


or commissions clinical studies so inherently biased as to be useless.191 As one former FDA official noted, “the marketplace of ideas and physician discretion does not work well without accurate information from well-designed studies.”192 In contrast, what if the company has studies supporting the new indication, but decides not to seek FDA approval because the drug’s patent is about to expire?193 What if the company later receives approval for the indication, as happened with Neurontin – an approval obtained while the FCA case was pending?194 What if the company seeks to share information that contradicts the official FDA labeling, as when Caronia informed a physician that patients as young as fourteen had safely used Xyrem despite the FDA-mandated black box warning against using the drug in patients under sixteen? Is a statement false if it concerns an indication for which FDA approval was denied, indicating that the company’s studies—while not untruthful—were insufficient?195

Just as FDA approval does not guarantee that a drug will work for any individual patient, the lack of approval does not always mean the opposite. As Professor Sandra Johnson noted with regard to Neurontin:

The absence of clinical trials does not mean that Neurontin (now generic gabapentin) is not effective in treating these highly similar pain states just as FDA approval in 2002 did not make the drug effective for treating pain. Nor was the experience of doctors and patients who observed the pain relieving effect of Neurontin “false” even though it would be categorized as “anecdotal.”196

Given the standards used by FDA, the fact that proffered clinical studies fail to meet the threshold for approval does not prove that the drug doesn’t work in some patients—it simply means that, for the aggregate patient population, the agency’s threshold for safety and efficacy has not been reached. A company’s representation that it has studies supporting such a use is not scientifically false, even if the evidence may be insufficient to support approval. Of course, statements may be both truthful and misleading: arguably, Caronia may have been accurate in stating that Xyrem had been used in some unspecified number of younger patients, but the

191 See, e.g., Samuel Krumholz et al., Study of Neurontin: Titrate to Effect, Profile of Safety (STEPS)

Trial 171 ARCH. INTERNAL MED. 1100 (2011) (describing “seeding trial” as a study conducted for marketing purposes that “pos[es] as a legitimate scientific study.”).

192 Joshua M. Sharfstein & Alta Charo, The Promotion of Medical Products in the 21st Century: Off-Label Marketing and First Amendment Concerns, 314 JAMA 1795, 1796 (2015).

193 See Dep’t of Justice, supra note 152 (“Warner-Lambert decided not to seek FDA approval for any of the new uses because it was concerned that approval for any of the non-epilepsy uses would allow generic competitors of Neurontin, which was expected to go off-patent soon, to compete with a ‘son of Neurontin’ drug that Warner-Lambert hoped to have approved”).

194 See Johnson, supra note 187, at 117 (describing approval of Neurontin for post-herpetic neuropathic pain); see also Spacapan & Hutchison, supra note 162, at 429 (citing other examples).

195 21 U.S.C. § 355(d) (2015) (permitting FDA to deny approval if there is insufficient evidence of safety or a lack of substantial evidence of efficacy).

196 Johnson, supra note 187, at 117; see also Christopher Robertson, When Truth Cannot Be Presumed: The Regulation of Drug Promotion Under an Expanding First Amendment, 94 B.U. L. REV. 545, 562 (2014) (“Even when a drug is proven effective, it is proven for the median patient, and there is often heterogeneity within the sample of patients. Even when the drugmaker makes a claim of efficacy, it is thus not making a warranty for every individual patient that the drug will work for her.”).


statement certainly was misleading (perhaps fatally so) without a mention of the relevant black box warning. Trying to separate truth from falsity in this context devolves into a scientific morass, from which the FCA offers no easy escape.

FDA appears to judge the veracity of information regarding off-label use similarly to how it undertakes initial drug approval, by demanding “substantial evidence” of efficacy. To many, that approach is unnecessary. As the district court remarked in the initial WLF litigation, by “asserting that any and all scientific claims about . . . prescription drugs are presumptively untruthful or misleading until FDA has had the opportunity to examine them, FDA exaggerates its overall place in the universe.”197 One option would be to use a lower threshold to assess off-label uses of drugs already approved for other indications. An oft-suggested alternative is to adopt the “competent and reliable scientific evidence” standard used by the Federal Trade Commission to assess whether advertising claims have been substantiated.198 Assessing off-label statements under this lower standard “would permit flexibility by potentially enabling myriad sources of relevant evidence, taking into account considerations of the relevant scientific community, to constitute adequate substantiation for drug claims.”199 Yet other commentators have highlighted the difficulty of making any verifiable determination of truth in the absence of robust data, which often is under the manufacturer’s control.200 A lower evidentiary threshold might only exacerbate the problem by tempting manufacturers to restrict data collection and sharing even further.201

Viewed from the vantage point of the FCA, however, this dispute over scientific evidentiary standards should be irrelevant. Even a truthful statement about an uncovered indication does not alter the fact that under current Medicaid and Medicaid coverage rules, that use does not entitle anyone to payment—and the knowing submission of a claim asking for such payment may violate the FCA. In short, questions regarding the truth or falsity of the claim must be kept separate from questions regarding the truth or falsity of the underlying scientific statements. Yet under the current system, because Medicare and Medicaid coverage rests heavily on FDA approval, these issues are inextricably and perhaps fatally intertwined.

197 Washington Legal Found. v. Friedman, 13 F. Supp. 2d 51, 67 (D.D.C. 1998).

198 See, e.g., Bennett et al., supra note 23, at 32 (citing FTC guidance); Boozang et al., supra note 158, at 18–20 (discussing provision allowing companies to use the lower standard in discussing economic information with formulary committees). One recent settlement suggests that the government may be signaling some flexibility in this area, as the DOJ press release focused on the company’s lack of substantial evidence “or substantial clinical experience” regarding the off-label use in question. U.S. Attorney’s Office, supra note 172.

199 Bennett et al., supra note 23, at 33.

200 Robertson, supra note 193, at 572 (“The truth or falsity of the drugmaker’s promotional claims is unknown, largely because the drugmaker has declined to invest in making such a proof.”), 574 (calling for courts to require drugmakers to prove the truth of their promotional claims as an affirmative defense).

201 See, e.g., Marc A. Rodwin, Independent Drug Testing to Ensure Drug Safety and Efficacy, 18 J. HEALTH CARE L. & POL’Y 42, 42 (2015) (proposing eliminating the role of manufacturers in conducting drug testing); Marc A. Rodwin, Independent Clinical Trials to Test Drugs: The Neglected Reform, 6 ST. LOUIS U.J. HEALTH L. & POL’Y 113, 113 (2012).


V. CONCLUSION

We have reached a curious state of equipoise in off-label FCA suits: major pharmaceutical manufacturers remain unwilling to chance a finding of liability under the FCA’s damages and penalties provisions, while the federal government remains reluctant to provide the courts with an opportunity to extend the First Amendment protections announced in Sorrell, Caronia, and now Amarin to the FCA.202 If the pharmaceutical industry is emboldened to challenge these off-label FCA prosecutions, that delicate balance will be tested. Courts will have no choice but to confront the effect of the First Amendment on these FCA disputes.

Yet the FCA is an imperfect tool for fighting battles over the adequacy of scientific knowledge. Truth, in the context of the FCA, concerns “claims” for payment, not statements of efficacy. The core query under the FCA should be whether the payment request is valid: did the claimant act with knowledge, or in reckless disregard or deliberate ignorance of the possibility, that the items or services were not covered by the federal health care programs? The determinations are entirely separate, and courts have been clear that the FCA is of little practical value in resolving scientific disputes. Because Medicare and Medicaid coverage rules implicate a drug’s FDA approval status, however, it is impossible entirely to separate the concept of a false claim for federal health care program reimbursement from the falsity of the statements and actions that may have contributed to that claim being submitted in the first place.

Of course, the relationship between FDA approval and coverage need not be self-perpetuating. Medicare and Medicaid could flatly ban coverage for indications that are not FDA-approved, perhaps with a limited number of exceptions. The virtues of such a clear ban, however, might well be offset by the disadvantages to patients with conditions for which off-label uses may be the only effective treatment.203 Alternatively, we could heed the sirens’ call of the WLF litigation and do away with any limits on the reimbursement of off-label promotion, instead trusting physicians to use their professional medical judgment in prescribing medications and relying on the basic Medicare coverage requirement that services be “reasonable and necessary” as a basis for bringing suit where inappropriate claims knowingly are submitted.204

The ultimate problem, however, may be the abysmal state of public opinion regarding the pharmaceutical industry. While perhaps it once was possible to trust that drug manufacturers embodied science as “a priesthood, an aristocracy of

202 Smolla, supra note 31, at 84–85 (“The government appears to employ a deliberate strategy to

avoid making law in this arena, using its coercive power to force settlements or its interpretative power to deftly alter regulatory positions so as to avoid a frontal First Amendment assault on its position.”); Osborn, supra note 31, at 322 (criticizing FDA’s unwillingness to engage “in an open process in which it attempts to reconcile the competing interests of commercial free speech and regulatory prerogative”).

203 Similarly, FDA could try to ban the use of drugs for unapproved purposes entirely; while offering needed clarity, however, an outright ban would raise concerns over federal interference with traditional state control of the practice of medicine. See, e.g., David Orentlicher, Off-Label Drug Marketing, the First Amendment, and Federalism, 50 WASH. U. J.L. & POL’Y 89, 92 (2016) (addressing federalism concerns).

204 42 U.S.C. § 1395y(a) (2015). However, the reasonable and necessary limitation has proven insufficient in other contexts. See Peter J. Neumann & James D. Chambers, Medicare’s Enduring Struggle to Define “Reasonable and Necessary” Care, 367 NEW ENG. J. MED. 1775, 1775 (2012).


excellence informed by a deep sense of moral obligation,”205 from the vantage point of the twenty-first century, that view seems woefully naïve. As economist Uwe Reinhardt has noted, the industry has evolved into a powerful economic force that unsuccessfully tries to serve two masters:

[S]ociety posits for the industry inconsistent standards of behavior. On some occasions, lawmakers and the general public seem to expect pharmaceutical firms to behave as if they were community-owned, nonprofit entities. At the same time, the firms’ owners—among them the mutual and pension funds that help to manage the savings of Americans—always expect the firms to use their market power and political muscle to maximize the owners’ wealth. Caught between these inconsistent standards of behavior is an industry that naturally will never get it quite right.206

That the industry no longer receives the benefit of the doubt over its intentions in encouraging discussion of off-label drug use may be one reason the attempts to cloak these activities in the protection of the First Amendment ring hollow, and why invoking the FCA is an attractive alternative.

For some, this is a fight over commercial freedom and basic First Amendment rights; for others, it has become a battle for the heart and soul of the FDA. In this battle the FCA is but a tool – albeit a powerful one – to enforce the requirement that business with the government be conducted fairly and honestly. That tool is, or at least should be, agnostic as to the merits of any particular scientific viewpoint. Leveraging the power of the FCA to short-circuit robust scientific and medical debate is unsupported as a matter of jurisprudence, and certainly unwise as a matter of policy.

APPENDIX: SOURCES FOR POST-CARONIA PHARMACEUTICAL

SETTLEMENTS

Activis Group David Voreacos & Margaret Cronin Fisk, Actavis Will Pay $118.6 Million to End Drug-Pricing Claims, BLOOMBERG (Jan. 4, 2012), http://www.bloomberg.com/news/articles/2012-01-04/actavis-will-pay-118-6-million-to-end-drug-pricing-claims-1-

Dava Pharmaceuticals

Press Release, Dep’t of Justice, Dava Pharmaceuticals to Pay U.S. $11 Million to Settle False Claims Act Allegations (Feb. 8, 2012), https://www.justice.gov/opa/pr/dava-pharmaceuticals-pay-us-11-million-settle-false-claims-act-allegations

Mylan Inc. David Voreacos, Mylan to Pay $57 Million to Settle Drug Overpricing Claims, BLOOMBERG (Feb. 28, 2012), http://www.bloomberg.com/news/articles/2012-02-28/mylan-to-pay-57-million-to-settle-drug-overpricing-claims-1-

205 LINDA MARSA, PRESCRIPTION FOR PROFITS: HOW THE PHARMACEUTICAL INDUSTRY

BANKROLLED THE UNHOLY MARRIAGE BETWEEN SCIENCE AND BUSINESS 17 (1997).

206 Uwe E. Reinhardt, Perspectives on the Pharmaceutical Industry, 20 HEALTH AFF. 136, 136 (2001).


Eusa Pharma (USA) Inc.

Press Release, Dep’t of Justice, Pennsylvania- Based Eusa Pharma (USA) Inc. to Pay U.S. $180,000 for Allegedly Submitting Inflated Claims to Medicare (Mar. 23, 2012),

http://www.justice.gov/opa/pr/pennsylvania-based-eusa-pharma-usa-inc-pay-us-180000-allegedly-submitting-inflated-claims

Cypress Pharmaceutical, Inc.

Press Release, Dep’t of Justice, Mississippi Pharmaceutical Firm and CEO to Pay $2.8 Million to Resolve Allegations of Illegal Marketing of Unapproved Drugs (Mar. 28, 2012), https://www.justice.gov/opa/pr/mississippi-pharmaceutical-firm-and-ceo-pay-28-million-resolve-allegations-illegal-marketing

McKesson Corp.

Press Release, Dep’t of Justice, McKesson Corp. Pays U.S. More Than $190 Million to Resolve False Claims Act Allegations (Apr. 26, 2012), https://www.justice.gov/opa/pr/mckesson-corp-pays-us-more-190-million-resolve-false-claims-act-allegations

Abbott Laboratories

Press Release, Dep’t of Justice, Abbott Labs to Pay $1.5 Billion to Resolve Criminal & Civil Investigations of Off-label Promotion of Depakote (May 7, 2012), https://www.justice.gov/opa/pr/abbott-labs-pay-15-billion-resolve-criminal-civil-investigations-label-promotion-depakote

GSK

Press Release, Dep’t of Justice, GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data (July 2, 2012), https://www.justice.gov/opa/pr/glaxosmithkline-plead-guilty-and-pay-3-billion-resolve-fraud-allegations-and-failure-report

Abbott Laboratories

Press Release, Dep’t of Justice, Abbott Laboratories Sentenced for Misbranding Drug (Oct. 2, 2012), https://www.justice.gov/opa/pr/abbott-laboratories-sentenced-misbranding-drug

Boehringer Ingelheim

Press Release, Dep’t of Justice, Boehringer Ingelheim to Pay $95 Million to Resolve False Claims Act Allegations (Oct. 25, 2012), https://www.justice.gov/opa/pr/boehringer-ingelheim-pay-95-million-resolve-false-claims-act-allegations

Healthpoint Ltd.

Press Release, Dep’t of Justice, Healthpoint Ltd. to Pay up to $48 Million for False Medicaid and Medicare Claims for Unapproved Prescription Drug (Dec. 6, 2012), https://www.justice.gov/opa/pr/healthpoint-ltd-pay-48-million-false-medicaid-and-medicare-claims-unapproved-prescription

Pfizer

Press Release, Dep’t of Justice, Pfizer Agrees to Pay $55 Million for Illegally Promoting Protonix for Off-Label Use (Dec. 12, 2012), http://www.justice.gov/opa/pr/pfizer-agrees-pay-55-million-illegally-promoting-protonix-label-use


Amgen

Press Release, Dep’t of Justice, Amgen Inc. Pleads Guilty to Federal Charge in Brooklyn, NY.; Pays $762 Million to Resolve Criminal Liability and False Claims Act Allegations (Dec. 19, 2012), http://www.justice.gov/opa/pr/amgen-inc-pleads-guilty-federal-charge-brooklyn-ny-pays-762-million-resolve-criminal

Sanofi U.S.

Press Release, Dep’t of Justice, Sanofi US Agrees to Pay $109 Million to Resolve False Claims Act Allegations of Free Product Kickbacks to Physicians (Dec. 19, 2012), http://www.justice.gov/opa/pr/sanofi-us-agrees-pay-109-million-resolve-false-claims-act-allegations-free-product-kickbacks

Victory Pharma Inc.

Press Release, Dep’t of Justice, Victory Pharma Inc. of San Diego Pays $11.4 Million to Resolve Kickback Allegations in Connection with Promotion of Its Drugs (Dec. 27, 2012), http://www.justice.gov/opa/pr/victory-pharma-inc-san-diego-pays-114-million-resolve-kickback-allegations-connection

Par Pharmaceuticals

Press Release, Dep’t of Justice, Par Pharmaceuticals Pleads Guilty and Agrees to Pay $45 Million to Resolve Civil and Criminal Allegations Related to Off-Label Marketing (Mar. 5, 2013), https://www.justice.gov/opa/pr/par-pharmaceuticals-pleads-guilty-and-agrees-pay-45-million-resolve-civil-and-criminal

Amgen

Press Release, Dep’t of Justice, Amgen to Pay U.S. $24.9 Million to Resolve False Claims Act Allegations (Apr. 16, 2013), http://www.justice.gov/opa/pr/amgen-pay-us-249-million-resolve-false-claims-act-allegations

Ranbaxy

Press Release, Dep’t of Justice, Generic Drug Manufacturer Ranbaxy Pleads Guilty and Agrees to Pay $500 Million to Resolve False Claims Allegations, cGMP Violations and False Statements to FDA (May 13, 2013), https://www.justice.gov/opa/pr/generic-drug-manufacturer-ranbaxy-pleads-guilty-and-agrees-pay-500-million-resolve-false

ISTA Pharmaceuticals Inc.

Press Release, Dep’t of Justice, ISTA Pharmaceuticals Inc. Pleads Guilty to Federal Felony Charges; Will Pay $33.5 Million to Resolve Criminal Liability and False Claims Act Allegations (May 24, 2013), https://www.justice.gov/opa/pr/ista-pharmaceuticals-inc-pleads-guilty-federal-felony-charges-will-pay-335-million-resolve

Amgen

Press Release, Dep’t of Justice: U.S. Attorney’s Office Central District of California, Ventura County-based Amgen Inc. Pays Over $15 Million To Resolve Allegations That It Illegally Marketed Cancer Drug With Kickbacks (July 11, 2013), https://www.justice.gov/usao-cdca/pr/ventura-county-based-amgen-inc-pays-over-15-million-resolve-allegations-it-illegally


Mallinckrodt LLC

Press Release, Dep’t of Justice: U.S. Attorney’s Office Central District of California, Pharmaceutical Company Agrees To Pay $3.5 Million To Settle False Claims Act Allegations (July 18, 2013), https://www.justice.gov/usao-ndca/pr/pharmaceutical-company-agrees-pay-35-million-settle-false-claims-act-allegations

Wyeth Pharmaceuticals

Press Release, Dep’t of Justice, Wyeth Pharmaceuticals Agrees to Pay $490.9 Million for Marketing the Prescription Drug Rapamune for Unapproved Uses (July 30, 2013), http://www.justice.gov/opa/pr/wyeth-pharmaceuticals-agrees-pay-4909-million-marketing-prescription-drug-rapamune-unapproved

Johnson & Johnson

Press Release, Dep’t of Justice, Johnson & Johnson to Pay More Than $2.2 Billion to Resolve Criminal and Civil Investigations (Nov. 4, 2013), https://www.justice.gov/opa/pr/johnson-johnson-pay-more-22-billion-resolve-criminal-and-civil-investigations

Abbott Laboratories

Press Release, Dep’t of Justice, Abbott Laboratories Pays U.S. $5.475 Million to Settle Claims That Company Paid Kickbacks to Physicians (Dec. 27, 2013), http://www.justice.gov/opa/pr/abbott-laboratories-pays-us-5475-million-settle-claims-company-paid-kickbacks-physicians

CareFusion Corp. Press Release, Dep’t of Justice, CareFusion to Pay the Government $40.1 Million to Resolve Allegations That Include More Than $11 Million in Kickbacks to One Doctor (Jan. 9, 2014), https://www.justice.gov/opa/pr/carefusion-pay-government-401-million-resolve-allegations-include-more-11-million-kickbacks

Endo Pharmaceuticals, Endo Health Solutions

Press Release, Dep’t of Justice, Endo Pharmaceuticals and Endo Health Solutions to Pay $192.7 Million to Resolve Criminal and Civil Liability Relating to Marketing of Prescription Drug Lidoderm for Unapproved Uses (Feb. 21, 2014), http://www.justice.gov/opa/pr/endo-pharmaceuticals-and-endo-health-solutions-pay-1927-million-resolve-criminal-and-civil

Teva Pharmaceuticals and IVAX LLC (subsidiary)

Press Release, Dep’t of Justice, Pharmaceutical Company to Pay $27.6 Million to Settle Allegations Involving False Billings to Federal Health Care Programs (Mar. 11, 2014), http://www.justice.gov/opa/pr/pharmaceutical-company-pay-276-million-settle-allegations-involving-false-billings-federal

Astellas Pharma US Inc.

Press Release, Dep’t of Justice, Astellas Pharma US Inc. to Pay $7.3 Million to Resolve False Claims Act Allegations Relating to Marketing of Drug Mycamine (Apr. 16, 2014), http://www.justice.gov/opa/pr/astellas-pharma-us-inc-pay-73-million-resolve-false-claims-act-allegations-relating-marketing


Shire Pharmaceuticals LLC

Press Release, Dep’t of Justice, Shire Pharmaceuticals LLC to Pay $56.5 Million to Resolve False Claims Act Allegations Relating to Drug Marketing and Promotion Practices (Sept. 24, 2014), http://www.justice.gov/opa/pr/shire-pharmaceuticals-llc-pay-565-million-resolve-false-claims-act-allegations-relating-drug

Daiichi Sankyo Inc.

Press Release, Dep’t of Justice, Daiichi Sankyo Inc. Agrees to Pay $39 Million to Settle Kickback Allegations Under the False Claims Act (Jan. 9, 2015), http://www.justice.gov/opa/pr/daiichi-sankyo-inc-agrees-pay-39-million-settle-kickback-allegations-under-false-claims-act

AstraZeneca

Press Release, Dep’t of Justice, AstraZeneca to Pay $7.9 Million to Resolve Kickback Allegations (Feb. 11, 2015), http://www.justice.gov/opa/pr/astrazeneca-pay-79-million-resolve-kickback-allegations

Inspire Pharmaceuticals, Inc.

Press Release, Dep’t of Justice: U.S. Attorney’s Office Southern District of New York, Manhattan U.S. Attorney Settles Civil Fraud Claims Against Inspire Pharmaceuticals, Inc. For Its Misleading Marketing Designed To Cause Prescriptions Of Azasite For Non-FDA Approved Uses (June 27, 2015), http://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-settles-civil-fraud-claims-against-inspire-pharmaceuticals-inc

NuVaise Inc.

Press Release, Dep’t of Justice, Medical Device Manufacturer NuVasive Inc. to Pay $13.5 Million to Settle False Claims Act Allegations (July 30, 2015), http://www.justice.gov/opa/pr/medical-device-manufacturer-nuvasive-inc-pay-135-million-settle-false-claims-act-allegations

Novartis

Press Release, Dep’t of Justice: U.S. Attorney’s Office Southern District of New York, Manhattan U.S. Attorney Announces $370 Million Civil Fraud Settlement Against Novartis Pharmaceuticals For Kickback Scheme Involving High-Priced Prescription Drugs, Along With $20 Million Forfeiture Of Proceeds From The Scheme (Nov. 20, 2015), https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-370-million-civil-fraud-settlement-against-novartis

Aegerion Pharmaceuticals

Press Release, Aegerion Pharmaceuticals, Aegerion Pharmaceuticals Announces Preliminary Agreements in Principle With DOJ and SEC Related to Ongoing Investigations (May 12, 2016), http://ir.aegerion.com/releasedetail.cfm?ReleaseID=970690

food and drug law journal · food and drug law journal volume 71 number 3 2016 _____ 327 401 442...

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