Whistleblower Litigation

Pharmaceutical/Medical Device Fraud (Including Off-Label Promotion)

Off-Label Marketing and Promotion of Drugs and Medical Devices

The largest fines levied under the False Claims Act by the Department of Justice have nearly all stemmed from unlawful off-label promotion of pharmaceutical products by the world’s large pharmaceutical companies. And nearly all of these cases started with a qui tam whistleblower who filed suit under the False Claims Act.

GlaxoSmithKline, Pfizer, Johnson & Johnson, Abbott, and Eli Lilly are five of the largest pharmaceutical companies in the world. Each of them has been made to pay one or more billion dollars in settlements of False Claims Act allegations.

Pharmaceutical companies and medical device makers, large and small, are routinely prosecuted under the False Claims Act for various forms of off-label marketing (marketing and promotion for uses not approved by the FDA), sometimes including unlawful kickbacks or other forms of compensation to medical providers, and related improper practices.

The basic idea behind the prosecution of these cases under the False Claims Act is that Medicare, Medicaid, and other government health care providers will not pay for every use of every product put on the market by pharmaceutical and medical device companies. Both federal and state health care programs are limited and constrained by budget concerns, common sense, and the plain requirement that products be used and paid for by the government only where there is demonstrated medical necessity for the product.  

As a general matter, pharmaceutical products and medical devices are regulated by both federal and state regulators. Before any such products or devices can be brought to market, they must be approved for use by the Food and Drug Administration. This application process generally follows years of rigorous scientifically valid testing of the product. Eventually, pharmaceutical companies apply for various “indications” for use of their products. The “indication” states what medical condition the drug is ultimately approved to treat. A company might apply and get approval for some uses; it may be denied approval for other uses. The product might be approved in certain doses or for certain age populations, but not others.

Medical devices are subject to approval based upon the classification of the medical device, which is itself determined by the seriousness of the malady the device is intended to treat: this covers everything from stents intended for use in coronary procedures to more basic wound care materials.

Under federal law, a company is limited to promotion within its approved use. In other words, companies are permitted to market and otherwise promote pharmaceutical products and medical devices only for their indicated or approved use. However, physicians are generally allowed to prescribe any product that the physician is willing to say will be helpful to the patient even if the product’s use for that particular patient would be considered “off-label.” It is considered “off-label” when it is for a use not approved by the FDA or for a patient population not approved.

Because physicians are not limited in what they can prescribe for a patient, companies have significant financial incentives to promote for off-label uses despite the prohibition.

Off-label promotion, however, undermines the integrity of our health care system by circumventing the requirement that companies must first establish the safety of their products for any uses they intend to promote to doctors to provide to patients.

In addition to creating a significant safety threat to patient populations, including, for example, elderly patients and pediatric patients for whom certain products are not approved for use or other high-risk patients for whom a product might pose an unreasonable safety hazard, this behavior can also constitute fraud on the government.

This is because pharmaceutical and medical device companies run afoul of the False Claims Act when their marketing activity results in claims for payment associated with off-label uses of their products that federal and state law are not intended to cover.

The federal False Claims Act (and its state law analogues) prohibits presenting or causing to be presented a false or fraudulent claim for payment or approval (31 U.S.C. § 3729(a)(1)(A)) and also prohibits making, using, or causing to be made or used, a false or fraudulent claim for payment or approval.

When pharmaceutical or medical device makers promote products for uses not indicated, they are generally marketing them also for uses that are not subject to reimbursement by federal and state health care plans. Despite this, many of the largest pharmaceutical and medical device companies have continued to market and promote off-label uses of their products, thereby causing the submission of false claims for payment in violation of the False Claims Act.

Many of the off-label promotion practices that have resulted in violations of the False Claims Act have been brought to the attention of the federal government because someone inside the company or someone approached with the off-label sales pitch (often a medical provider) decided to hire counsel and file a False Claims Act lawsuit challenging the conduct.

Some of the qui tam whistleblowers who have challenged these practices have been executives at the companies engaged in the off-label promotion, other times medical professionals or sales representatives within the company, and at times medical providers, including doctors and nurses, who have been troubled by the off-label promotion engaged in by a pharmaceutical or medical device company.

Though several high-profile off-label promotion cases have resulted in significant recoveries for federal and state governments, and corresponding large awards to the qui tam whistleblowers who initiated the actions, many of these cases do not succeed and whistleblowers will often fail to successfully litigate off-label cases after the government declines to intervene in the qui tam action.

The most egregious off-label promotion cases naturally are the most troubling for the Department of Justice and tend to be the most likely cases to result in significant enforcement action. The most egregious cases tend to be those involving off-label promotion of a pharmaceutical product or medical device for a use that has caused, or is known to the company to create a significant risk of causing, danger to the off-label patient population to whom it is indirectly being marketed. If off-label use creates dangers that the company fails to disclose, or tries to disguise, it is all the more egregious.

Some courts and commentators have attempted to draw a line between truthful and untruthful off-label marketing and promotion. The latter is more troubling and more likely to result in a successful enforcement action, even though federal law does not permit pharmaceutical and medical device companies to market accurate but off-label information.