Archive for the ‘Off-Label Marketing’ Category

Wyeth Pharmaceuticals Settles Off-label Marketing Allegations for $490.9 Million

Wyeth Pharmaceuticals Inc., (Wyeth) acquired by Pfizer Inc. in 2009, entered a $490.9 million settlement with the United States government that resolved criminal and civil liability arising from the off-label marketing of it immunosuppressive drug Rapamune.

Under the Federal Food, Drug and Cosmetic Act (FDCA), when a pharmaceutical company developes a product it must indicate the specific use of the product in its new drug approval application submitted to the U.S. Food and Drug Administration (FDA).  Once the FDA approves the product for the specific use, a company may not market the drug for any other uses, unless if recieves FDA approval for such new use. The FDA, in 1999, approved Wyeth’s Rapamune for the limited use in renal (kidney) transplant patients and required the drug’s label to include a warning against certain uses.

Under the government’s criminal information, it alleged that Wyeth trained its national Rapamune sales force to promote the drug for use with non-renal transplant patients. Or in other words to promote the use of Rapamune for uses other than its specific FDA approved use.  According to the information Wyeth also supplied its sales force with training materials regarding the off-label use of Rapamune and how to use such materials in presentations to transplant physicians.  Wyeth provided its sales force with financial incentives to target all transplant patients with the goal of increasing Rapamune sales. Sanford Coats, U.S. Attorney for the Western District of Oklahoma characterized Wyeth’s training of its sales forceon the off-label promotions of Rapamune as “a systemic, corporate effort to seek profit over safety.”

Wyeth pleaded guilty to the criminal information that charged it with a misbranding violation under the FDCA.  Wyeth was charged with a criminal fine and forfeiture of $233.5 million.  Wyeth concurrently settled civil allegations with the federal and state governments totalling $257.4 million.  The government under the civil settlement alleged that from 1998 through 2009, Wyeth promoted Rapamune for unapproved uses, some which were not medically accepted indications and, therefore, were not covered by Medicare, Medicaid and other federal health care programs.  The unapproved uses included promoting Rapamune for non-renal transplants, converting patients from other immunosuppressant drugs to Rapamune, and using Rapamune in combination with other immunosuppressive agents not included on Rapamune’s FDA approved label.  This conduct resulted in false claims being submitted to the federal and state health care programs.  Wyeth in settling these allegations will pay the federal government $230, 112, 596 and the state governments will recieve $27,287,404.

This civil settlement resovles two qui tam cases filed which included these allegations.  The first action was filed by former Rapamune sales representative Marlene Sandler, and pharmacist Scott Paris.  The second qui tam was filed by former Rapamune sales reprsentative Mark Campbell.  At the time of the Department of Justice’s announcement on July 30, 2013, the whistleblowers had not resovled the amount of their share of the total settlement.


Posted in False Claims, Federal False Claims Act, Healthcare Fraud, Off-Label Marketing, Qui Tam, Settlements, State False Claims ActsNo Comments

Glaxo Smith Kline Settles Largest Health Care Fraud Case in U.S. History

The Department of Justice announced today, Monday, July 2, 2012, that Glaxo Smith Kline, LLC (GSK) has agreed to plead guilty and to pay 3 billion in criminal and civil fines for the company’s unlawful promotion of its drugs: Paxil, Wellbutrin, Avandia, Lamictal and Zofran; making false statements about the safety of Avandia and failing to report these safety concerns; paying kickbacks to physicians to promote these drugs as well as Imitrex, Lotronex, Flovent, and Valtrex; and reporting false best pricing and underpaying rebates owed under the Medicaid Drug Rebate Program.  GSK will pay a total of 1 billion under the criminal plea agreement as well as 2 billion to resolve its civil liabilities under the False Claims Act.  The settlement resolves four qui tam lawsuits alleging GSK promoted off-label uses for its drugs which were pending in the federal court in the District of Massachusetts.

Under the criminal plea agreement, the government alleged that from April 1998 to August 2003, GSK promoted the drug Paxil for treating depression in children under the age of 18 even though the drug had not received FDA approval to do so, among other allegations.  GSK agreed to plead guilty to this misbranding allegation, more familiarly referred to as off-label marketing.

Additionally, the government alleged that from January 1999 to December 2003, GSK marketed Wellbutrin as a weight loss drug, and a treatment for sexual dysfunction, substance addictions, and Attention Deficit Hyperactivity Disorder as well as other off-label uses despite the drug being approved by the FDA only as a treatment of Major Depressive Disorder.  GSK agreed to plead guilty of misbranding Wellbutrin, as its label did not include adequate directions for these off-label uses.  GSK will pay $757,387,200 in criminal fines and forfeiture for the Paxil and Wellbutrin offenses.

The government also included criminal allegations for GSK’s drug Avandia.  The government alleged that between 2001 and 2007, GSK did not include safety data about Avandia in its reports to the FDA which were to determine whether Avandia was still a safe drug for its approved use – Diabetes – and to identify drug safety trends. Since 2007, GKS has been required to include a black box warning on Avandia’s labels alerting physicians to the potential increased risk of congestive heart failure and myocardial infarction – heart attacks.  GLS plead guilty to this failure to report data allegations and agreed to pay a fine of $242,612,800 for its criminal conduct.

This historic settlement also resolved four pending civil False Claims allegations – qui tam lawsuits – against GSK.  The civil false claims allegations involved off-label marketing of Paxil and Wellbutrin as well as off-label allegations that GSK marketed its asthma drug, Advair, for first line therapy for mild asthma, and for chronic obstructive pulmonary disease including misleading claims as to the relevant treatment guidelines.  Furthermore, GSK promoted Lamictal its anti-epileptic medication for off-label non-covered psychiatric uses, neuropathic pain and pain management. GSK also promoted Zofran, FDA approved for post operative nausea, to pregnant women to treat morning sickness.  The government further alleges that GSK paid kickbacks through various schemes to physicians to induce the promotion and prescription of all these drugs as well as Imitrex, Lotronex, Flovent and Valtrex. GSK agreed to pay $1.04 billion for this conduct, with the federal government’s share equalling $832 million and the states’ share equalling $200 million.

Also under the civil settlement, the government alleged that GSK promoted Avandia with false and misleading representations regarding the drug’s safety profile.  GSK agreed to pay $657 million relating to the false misrepresentation of Avandia’s positive cholesterol profile and cardiovascular benefits.

Finally, under the civil settlement, GSK resolved allegations that between 1994 and 2003, GSK and its corporate predecessors reported false drug prices resulting in the underpayment of rebates it owed to the states’ Medicaid programs.  GSK bundled the sales of drugs which included deep discounts commonly known as “nominal” pricing, but did not report such discounts to the Medicaid programs as required by law.  By not reporting the discounts given, GSK effectively underpaid rebates owed to the Medicaid programs.  GSK agreed to pay $300 million to resolve these pricing allegations, which includes $118,792, 931 going to the states’ Medicaid programs.

In addition to the criminal and civil fines, GSK executed a five year Corporate Integrity Agreement under which GSK must change the way in which it compensates its sales force, no longer able to do so based on sales goals or volume of sales, and allowing GSK to recoup annual bonuses and long term incentives from its executive ranks for employees who engage in significant misconduct.

Posted in Anti-Kickback Statute, Best Price, False Claims, Healthcare Fraud, Off-Label Marketing, SettlementsNo Comments

Pfizer Settles Detrol Marketing Allegations

Pfizer Inc. agreed to pay $14.5 million to settle False Claims Act allegations related to marketing of its drug Detrol.  The qui tam suit alleged that Pfizer illegally marketed Detrol–a drug approved for the treatment of overactive bladder–for use in men with enlarged prostates and related conditions, including bladder obstruction. Pfizer denied all allegations of wrongdoing in a statement.

Of the $14.5 million settlement, $11,878,846 will go to the federal government, and $2,621,154 will go to state Medicaid programs.  The whistleblowers will receive  a relator’s share of $3,282,019 under the False Claims Act.  The settlement was part of the governments’ Health Care Fraud Prevention and Enforcement Action Team (HEAT), announced in May 2009 by the Department of Justice and the Department of Health and Human Services.

Posted in Off-Label Marketing, SettlementsNo Comments

Drugmaker Settles Qui Tam Claims for $26.7 Million

Novo Nordisk will pay $25 million to the U.S. Government to settle allegations of improper marketing of the anti-clotting drug NovoSeven. The complaint alleged that the company improperly promoted NovoSeven for indications not approved by the Food and Drug Administration.

Novo Nordisk also agreed to pay $1.725 million to the U.S. Government and four states to resolve allegations that its sales representatives paid Rite Aid pharmacists to recommend the diabetes drugs Novolin and Novolog.

Novo Nordisk made no admission of wrongdoing in either settlement.

Posted in Anti-Kickback Statute, False Claims, Off-Label Marketing, SettlementsNo Comments

AARP signed on as co-counsel in a qui tam lawsuit

AARP has signed on as co-counsel in a qui tam whistleblower suit filed in 2006 against Abbott Laboratories, Johnson & Johnson and Boston Scientific who allegedly deceived the Food and Drug Administration (FDA) to gain approval for biliary stents, which they then illegally marketed its off-label use as vascular stents. AARP is sending a clear message to pharmaceutical companies who illegally market their drugs and devices off-label with their involvement in this qui tam case.

“More and more people see the False Claims Act as a means of correcting years of fraudulent activity,” says Joel Androphy, partner at the Nationwide Law Firm of Berg & Androphy.

The education of the growing senior population is an essential ingredient in reducing the incidents of Medicare fraud. Recently, the Centers for Medicare & Medicaid Services (CMS) announced that $9 million in grants have been awarded to bolster 51 Senior Medicare Patrol programs enlisting volunteers to educate seniors to recognize and report Medicare fraud.

The Obama administration recently warned that, due to confusion over the provisions of the Patient Protection and Affordable Care Act, fraudsters are taking advantage of the Act to prey on seniors, whose Medicare beneficiary numbers are the key to billing scams that drain resources from the federal health program.

Posted in Healthcare Fraud, Off-Label Marketing1 Comment

Whistleblower Complaints Lead to Probe of Allergan’s Marketing of Botox

Allergan Inc., has agreed to settle a federal investigation over how it marketed Botox, said the Associated Press (AP). Allergan Inc. allegedly promoted Botox Therapeutic for unapproved medical uses through Medicaid resulting in a combined $600 million in civil and criminal penalties. The settlement becomes official once a federal judge approves it, said the AP.

A whistleblower complaint led to the probe that lasted one year, with the Justice Department looking at Allergan’s marketing of Botox from 2001 through 2008. The five whistleblowers will split $37.8 million of the government’s settlement.

Private citizens who file lawsuits on behalf of the government alleging fraud are eligible for up to 18 percent of whatever is recovered as the result of a qui tam lawsuit. According to a press release, Allergan Inc. agreed to pay state governments and the federal government a combined $225 million civil settlement to compensate Medicaid, Medicare and other federal health programs for reimbursements wrongly paid for Botox Therapeutic. This includes $210 million to the federal government—the rest to a number of states—connected to the probe.

Off-label marketing violates the civil and criminal laws.” says Joel Androphy, Partner at the prestigous Nationwide law firm of Berg and Androphy. “In addition to misbranding a drug, many pharmaceutical companies pay kickbacks to doctors to induce more prescriptions. As long as companies compete for patients, off-label marketing will continue.”

Posted in Off-Label Marketing, Whistleblower LawsuitNo Comments

AtriCure Case Reaches Settlement

Earlier this week AtriCure, Inc. executed a settlement with the Department of Justice in a case brought to court by a relator in 2007. AtriCure, primarily a manufacturer of cardiac surgical ablation systems, settled with the Department of Health and Human services for $3.8 million plus interest covering a five year period.

The case was filed in the United States District Court for the Southern District of Texas and charges AtriCure in violation of the Federal False Claims Act. By using illegal kickbacks and sponsoring non-branded marketing, AtriCure coaxed medical practices into favoring the corporation’s costly in-patient cardiac surgical ablation procedure over a clinically more effective out-patient catheter process.

Compensation for the costs incurred to Medicare because of the more costly treatment being falsely preferred are being sought by the relator and the Department of Justice on behalf of the Department of Health and Human Services.

In a press release earlier this week, the Department of Justice stated that this case is part of a larger movement to fight healthcare fraud. In the last year alone, the legal jurisdiction granted by the False Claims Act has been used by the US Government to recover approximately $2.2 billion in cases of fraud towards United States health care programs.

Posted in Anti-Kickback Statute, Federal False Claims Act, Healthcare Fraud, Off-Label Marketing, SettlementsNo Comments

Announcement of Pfizer’s Off-Label Settlement a Harbinger of Increasing Accountability

Last Wednesday, the Justice Department held a conference to announce Pfizer’s off-label criminal and civil settlement for its fraudulent marketing practices.

Pfizer’s subsidiaries will plead guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding with the intent to defraud or mislead. It will pay a criminal fine of $1.195 billion and forfeit $105 million, bringing the total criminal settlement to $1.3 billion.

The civil settlement of $1 billion will resolve claims under the False Claims Act that Pfizer illegally promoted four of drugs (most notably the anti-inflammatory drug Bextra), caused false claims to be submitted to government healthcare programs for indications other than those approved by the FDA, and provided kickbacks to doctors to induce them to prescribe these drugs.

Pfizer has also entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services that will subject the company’s marketing practices to additional review procedures and safeguards to help avoid and promptly detect similarly offending conduct. For example, Pfizer’s executives will need to complete annual compliance certifications and the company will be required to make detailed disclosures on its website.

The settlement is notable enough for its sheer magnitude: it is the largest in the Department of Justice’s history; it also represents the largest criminal fine imposed ever in the United States for any matter.

But the story behind the story is also interesting. The settlement itself was already announced–and largely completed–by the Bush administration. But whereas the Bush administration was less likely to tout its strikes against big pharmaceutical companies, the Obama administration is happy to take the credit. This certainly signals a bleak future for the drug companies. The administration appears poised to go after these cases with more gusto, especially as it faces criticism for the high cost of Obama’s healthcare proposals.

In January, Eli Lilly and Company settled similar claims over its marketing of Zyprexa for $800 million. The success of that case can be traced directly to courageous stands taken by employee whistleblowers.

The six whistleblowers in the Pfizer case will share some $102 million of the federal portion of the civil recovery. As employee whistleblowers continue to work with the current administration, we can expect to see more of these announcements in the coming months.

Learn more about the Justice Department Conference
Learn more about Pfizer’s Corporate Identity Agreement
Learn more about Eli Lilly and Company’s Zyprexa case

Posted in Damages, Healthcare Fraud, Off-Label Marketing, Qui Tam Litigation, SettlementsNo Comments

Whistleblower Qui Tam Case Discusses Compendia, Drug Utilization and Kickback Issues

By: Joel Androphy, Rachel Grier, and Scott Braden

Medicaid can only reimburse drugs that are used for a medically accepted indication, meaning an indication that is either approved by the FDA or supported by one of three drug compendia. In Rost, the whistleblower, a former Pfizer marketing executive, brought a qui tam suit alleging that Pfizer unlawfully promoted the off-label use of Genotropin (human growth hormone) for treatment of short stature in children. Pfizer argued that one of the compendia, DRUGDEX, cited Genotropin as “possibly effective” for short stature in children.  Citing to a recent statement by the Center for Medicaid and State Operations, the court pointed out that to be reimbursable, an off-label use must be supported by the compendia as opposed to merely listed.  It was unclear from the record whether being cited by DRUGDEX as “possibly effective” could be read to “support” an off-label use. 

The court stated that Pfizer’s stronger argument was that the off-label claims were not false because they were approved by Indiana Drug Utilization Review (“DUR”) Board.  For example, if a state knowingly reimburses for the off-label use of a drug “after a prior authorization review,” the government knowledge could “negate the intent requirement under the FCA.”  This argument, however, was trumped by the allegations (and potential proof) that the false qui tam claims were caused by unlawful kickbacks.

Posted in Anti-Kickback Statute, Healthcare Fraud, Off-Label MarketingNo Comments

Court Rejects Free Speech as Defense to Off-Label Drug Promotion

A federal judge in Brooklyn rejected a pharmaceutical sales representative’s defense of commercial free speech in responding to charges of criminal misbranding.   The Court found that the prohibition of off-label promotion of drugs is essential to maintaining the integrity of the FDA’s drug approval process,  The government used informants in investigating the case.   The case is United States v. Caronia, a court in Brooklyn, the Eastern District of N.Y.

Posted in Healthcare Fraud, Off-Label MarketingNo Comments

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