Exploring the Nature of Scrutiny
Surrounding Off-Label Information
December 6, 2011
Presented by
David Restaino, Esq.
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Scrutiny of Off-Label Promotion
 A quick history lesson
 Enforcement “waves”
 Government methodology … and what
we can learn from it
 Grey areas of off-label promotion
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Background
 False Claims Act (31 U.S.C. §§ 3729 to 3733)
 Anti-kickback law (42 U.S.C. § 1320a-7b)
 Federal Food Drug and Cosmetic Act (21 U.S.C. § 301 et
seq.)
 Prescription Drug Marketing Act (21 U.S.C. § 331 et seq.)
 HHS Office of Inspector General guidance documents
 Accreditation Council for Continuing Medical Education
(ACCME) policies and guidelines
 PhRMA Code (code of conduct for sales representatives)
 AdvaMed Code of Ethics on Interactions with Health Care
Professionals
 State law
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
False Claims Act
 Knowingly presenting a false or fraudulent
claim for payment
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Liability for a civil penalty calculated on a per-claim
basis
Plus three times the damages sustained by the
government
 Broadly defines “knowing”
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A knowing violation includes illegal acts for products
that are reimbursed by a federal health care
program
 “Relators” can sue on behalf of the government
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Other Statutes
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Anti-kickback law
- Illegal to offer to pay to induce a person to purchase or order any item
or service for which payment may be made under a federal health
care program, or recommend purchasing or ordering such an item or
service
- A person need not have actual knowledge of the statue or a specific
intent to violate it
- Violations are “federal healthcare fraud offenses”
- Punishable by prison terms, fines, civil penalties … and exclusion
from participation in federal health care programs
Federal Food Drug and Cosmetic Act (FDCA)
- Illegal to introduce a misbranded drug into interstate commerce
- False or misleading labels, or inadequate warnings or directions,
constitute misbranding, and this includes marketing a drug for an
unapproved use
- Can distribute off-label use information in response to certain
unsolicited requests (21 U.S.C. §§ 360aaa - 360aaa6)
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Other Statutes
 Prescription Drug Marketing Act
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Amended FDCA to:
Ensure prescription drugs are safe and effective
 Avoid risk from, e.g., misbranded drugs

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Violations lead to civil and/or criminal
consequences
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Policies and Guidance
 HHS OIG
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Compliance Program for Pharmaceutical Manufacturers (68 Fed.
Reg. 23731 (May 5, 2003))
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Elements of an effective compliance program
Specific risk areas for manufacturers

May shield remuneration paid by pharma companies
Encourages “hotline” reporting when sales representatives promote
off-label uses
Regulatory safe harbors
 FDA’s “Good Reprint Practices” Guidance for Industry (Jan. 2009)
 Pharmaceutical Research and Manufacturers of America Code on
Interactions with Healthcare Professionals (PhRMA Code)
 ACCME
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Standards to ensure independence of CME activities
Disclosure of financial relationships / conflicts of interest
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Enforcement Waves
in the Past Decade

2006
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2007
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OIG reports that 14% of nursing home residents receive antipsychotic drugs … and 83%
of Medicare claims for those drugs are for off-label conditions
2010
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
OIG recovers $1.6 billion and excludes over 3,400 people
HHS and DOJ announce $4 billion recovered in FY 2010 in health care fraud and
prevention efforts
Numerous off-label promotion settlements in excess of $10 million
2011
-
Manufacturer pleads guilty to misdemeanor under FDCA and pays $85 MM criminal fine
for intending an off-label use for a heart failure drug; civil case under FCA is still pending
Executives personally pay > $30 MM; but they appeal 12-year exclusion


Oral argument on exclusion set for 12-6-2011
Whistleblower cases on the rise
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FCA “qui tam” actions
SEC whistleblower bounty
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
“This Just In …”
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$950 million over drug marketing
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Corporate officials sent to jail & fined
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Unapproved testing of bone-cement product; 3 people dead; alleged failure to
report and alleged lies during FDA audit
Medical device manufacturer pays $2.39 million
-
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$321 criminal fine; misdemeanor guilty plea; $226 million to settle federal civil
claims and another $202 million to state Medicaid agencies
Illegal kickbacks to induce physicians’ use
Discovered by whistleblower qui tam action
Manufacturer pays $600 million to resolve criminal and civil allegations for
off-label uses, and pleads guilty to misdemeanor
Manufacturer pays $3 billion to settle civil and criminal charges that
include off-label marketing
DOJ / HHS Health Care Fraud Prevention and Enforcement Action Team
(HEAT); state partners
Increased use of “untitled letters” in 2011
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Recent Areas of
Government Investigation
 Schemes uncovered by the United States
include:
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Misbranded drugs

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One defendant allegedly went so far as to have
its employees work overtime to ship misbranded
drugs soon after receiving a government warning
letter
Promoting off-label drug uses
Illegal kickbacks
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Specific Areas of Scrutiny
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E-mails
Inspections and Audits
Whistleblower claims
Payments to physicians
Competitors
S.E.C. disclosure statements
Regulators review Internet, TV, radio
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More Areas of Scrutiny
 Sales staff targeting physicians who prescribe
for off-label uses
 Medicaid rebate manipulation
 Labels and Promotional materials
 Scientific meetings
 Responsible corporate officials, including inhouse counsel
 Fines / penalties and exclusion
 Medical device labeling
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Settling with the Government
 Admit wrongdoing
 “Deferred prosecution agreement,” often for
two years
 Discharge executives and personnel
 Exclusion from federal health care programs
 LARGE payment
 “Corporate Integrity Agreement”
-
A corporate compliance and governance program
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Corporate Integrity Agreements
 Code of conduct, written policies
 Appointing a compliance officer and a compliance
committee
 Mandatory training
 Compliance accountability enforced via performance
evaluations
 Constant interaction between compliance staff and
sales & marketing personnel
 Internal audits plus independent review
 Establishing an internal disclosure program
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Other Litigation Concerns
 Claims asserted by states
 Investor lawsuits regarding stock losses
 Civil suits / class actions
-
Failure to warn actions brought under state
law
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Grey Areas
of Off-Label Promotion
 First Amendment right to free speech
 Social media
 Government interpretation of improper promotion and safe
harbors
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“Unsolicited” requests for information
Kickbacks
Compensating pharmacists for services
Specific reimbursement coding for a drug
Manipulating prices or rebates
Fair market value
 Advice of counsel and negating “intent” under the FCA
 Electronic discovery
 “Whistleblowers”
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
First Amendment Right to Speech
 Sorrell case (131 S.Ct. 2653 (2011))
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Not an off-label case
Vermont’s Prescription Confidentiality Law of 2007
required doctors’ consent for the purchase of doctor
prescribing records, from data mining companies, to
reveal prescribing histories
Supreme Court strikes down the law
“The statute . . . disfavors marketing, that is, speech
with a particular content. More than that, the statute
disfavors specific speakers, namely pharmaceutical
manufacturers .... The law on its face burdens
disfavored speech by disfavored speakers”
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
First Amendment Right to Speech
 Caronia case (576 F.Supp.2d 385 (E.D.N.Y. 2008))
-
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Pharma sales rep criminally charged with
misbranding for promoting off-label usage
Does the rep have a right to truthful speech about
off-label uses?
Court below said “no”
Appeal to Second Circuit Court of Appeals is
pending; time extended to address impact of Sorrell
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
First Amendment
 Par Pharmaceutical case (U.S. District Court
for the District of Columbia)
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Par files suit October 14, 2011
Sues FDA and HHS to challenge regulations and
citing unconstitutional action under First Amendment
Seeks declaratory and injunctive relief to bar the
criminalization of truthful speech about off-label
uses
Par cites to medical data showing legitimacy of offlabel uses, as determined by independent medical
personnel
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Social Media
 Defining “social media”
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Twitter, Facebook, YouTube, websites, blogs
 Lack of FDA guidance
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Guidelines promised, 74 Fed. Reg. 48083 (September 21,
2009)
Comment period long-since expired
 Grey areas
-
Use of web-links
Erroneous information
Unsolicited requests
Mobile “apps”
Which communications can be charged to a manufacturer?
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Petition for FDA Action
 Filed July 2011 by 7 medical product mfrs.
 Requests FDA action to clarify dissemination of info
regarding new uses of marketed drugs & medical
devices:
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Seeks binding rules, rather than “guidance” re: manufacturer
responses to unsolicited requests
Requests clarity re: scientific exchange “safe harbor” and
parity between drugs and medical devices
Recommends FDA approval of interactions with formulary
committees, payors and others about investigational products
and off-label uses
Asks for formal ruling about manufacturer circulation of clinical
practice guidelines to third-parties, re: patient care, even if
concerning off-label uses
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Other Open Questions
 Patient postings
 Correcting misinformation
 Advice of counsel
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May 2011 dismissal of indictment against
counsel in alleged off-label marketing case

Crime-fraud exception
 E-discovery
 Whistleblowers
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Compliance Issues
 Compliance program and business code of
conduct / standard operating procedures
 Training program
 Product labeling
 Grant proposals
 Promotional materials, and drafts
 Conference presentations
 Circulating journal articles
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Compliance Efforts
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Look to corporate integrity agreements as a model
Start with basics
Then create a written-yet-dynamic compliance program
Use data to identify problems and priorities
Choose the appropriate management system to tackle
priorities
 Implement – and test – the design to ensure its
continuing viability
 Seeking out information and immediately deal with
adverse results
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Create Compliance Assets
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Leadership
Metrics and data collection
Identify target areas
Establish priorities and pilot programs
Educate and train
Create incentives
Audit, and audit the auditors
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Asset Management
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Delegate and coordinate
Manage existing policies
Anticipate new issues, and plan
Track results (% compliance)
Communicate results
Enforcement and punishment
Self-reporting
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
What Can We Expect
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More whistleblowers
More scrutiny from the government
More fraud and abuse charges
More penalties and exclusion
More jail time for owners, officers & managers
More deferred prosecution agreements and
corporate integrity agreements
 More guidelines and more rules
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Looking Forward …
 Deferred prosecution and corporate
integrity agreements will create a “new
normal”
 Smaller manufacturers will have to keep
up with larger, more sophisticated
corporate compliance programs
 Other thoughts ….
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild
Contact Information
David Restaino, Esq.
609.895.6701
drestaino@foxrothschild.com
Regulatory Off-Label Communications Conference
© 2011 Fox Rothschild