A Focus on Off-Label Issues
Stephen F. Mohr
Deputy Compliance Officer
AstraZeneca Pharmaceuticals
Sheryl Vacca
West Coast Practice Leader
Life Science Regulatory Practice
Deloitte & Touche LLP
Disclaimer
The information presented represents the
opinions of the authors and does not
necessarily reflect the views of
AstraZeneca Pharmaceuticals LP or
Deloitte & Touche LLP
Topics discussed
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2005 Headlines
Off-label promotion defined
Governing Law
Key Risk Areas
The Neurontin case
Other current investigations
Serono settlement
Impact on Compliance Departments
2005 Headlines
From Rx Compliance Report
 Lew Morris, Chief Counsel HHS OIG
 Legal problems associated with off-label promotion
have the potential to get even worse under the new
Part D benefit
 “About half the pharma companies have truly effective
compliance programs in place, and half of them are just
giving it lip service.”
 Morris says companies may seek to put on
manufacturer-sponsored conferences, get doctors to
participate as medical experts, or hire them as
consultants in order to push products for off-label
uses, knowing that they may be reimbursed under
the new Medicare Part D benefit
2005 Headlines
From Rx Compliance Report
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Mary Riordan, Sr. Counsel, HHS OIG
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With Medicare Part D looming, OIG and
Department of Justice will be vigilant in
their coordination concerning evaluation of
off-label cases
What is Off-label Promotion
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Marketing of a pharmaceutical product for uses not
included in its FDA-approved labeling. Can include
information as to unapproved:
 Indications
 Dosing
 Route of administration
 Patient population
Governing Laws
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Food Drug and Cosmetic Act
False Claims Act
Federal Anti-Kickback Statute
Food Drug and Cosmetic Act
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In order to obtain FDA approval to sell a
pharmaceutical product, the manufacturer must
demonstrate the safety and effectiveness of the
product for its intended uses. Promoting a drug for
uses outside of its approved indications constitutes
the introduction of an unapproved new drug into
interstate commerce in violation of the FD&C Act, 21
USC Sec. 331(d)
False Claims Act
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Prohibits knowingly presenting or causing to be
presented a false or fraudulent claim for payment
or approval by the federal government, 31 USC
Sec. 3729
In USA ex rel. Franklin v. Parke-Davis, 2003 WL
22048255 (D. Mass.), district court held that the
Relator need not prove that Parke-Davis “lied to
physicians about Neurontin’s off-label efficacy” in
order to state a claim under the False Claims Act.
“[T]ruthful off-label marketing (ineligible for
federal safe harbors) and financial incentives like
kickbacks would suffice.”
Federal Anti-Kickback Statute
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Makes it a criminal offense to knowingly and
willfully offer, pay, solicit, or receive remuneration
in order to induce the purchasing or
recommending of any item or service that the
federal government may purchase or otherwise
pay for under Federal health care programs. 42
U.S.C. Sec. 1320a-7b(b).
Many cases of off-label promotion also involve
allegations of kickbacks, for example consulting
programs that are used inappropriately as a
venue to deliver off-label messages
Off-Label Implications of Medicare
Part D Implementation
 Formulary activities
 Expansion of coverage
Business Practices That
Can Create Off-Label Risk
 Sales representative activities
 Field medical activities
 Reprint use
 Third party relationships
 Pharmacy benefit manager/GPO
interactions
 Use of Consultants
Business Practices That Can
Create Off-Label Risk (continued)
 Use of Speakers
 Clinical research grants
 Continuing Medical Education
 Publications
 Sampling Activity
The Neurontin Case
 Neurontin developed by Warner-Lambert
(later acquired by Pfizer). Approved by the
FDA in 1993 as an adjunctive anti-seizure
medication for adult epileptics.
 Market began to plateau, so WarnerLambert chose to pursue more off-label
sales. Percentage of off-label use grew from
15% in 1994 to 94% in 2002.
The Neurontin Strategic Plan
(as described in the Neurontin Sentencing
Memorandum)
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1997--Home office implemented strategic plan to
“maximize Neurontin opportunities in emerging
applications”
Elements of the plan
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Educate the medical profession on emerging use areas
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Expand the user base beyond those treating epilepsy
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Expand communication regarding different types of uses of
Neurontin
Support publications regarding expanded uses of Neurontin
Groom thought leaders for peer to peer selling in expanded use
areas
Specific Tactics Used to Implement the
Neurontin Strategic Plan (according to the
Sentencing Memorandum)
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Direct selling on off-label indications
Use of field medical personnel to push off-label use
Preceptorships with physicians where off-label uses
were discussed
Lavish consultant meetings at which off-label uses
were discussed
Frequent teleconferences at which doctors were paid
to speak about off-label topics
Sponsoring allegedly independent CME events with
extensive input from Warner-Lambert as to content
Neurontin Settlement
 Settled in June 2004. $430 million
settlement payment
 Criminal guilty plea by Warner-Lambert to
violation of the Food Drug & Cosmetic Act
 Detailed Corporate Integrity Agreement
signed with OIG
Other current investigations
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Schering-Plough (May 2003) disclosed that the U.S. Attorney’s Office in
Boston is investigating its sales and marketing practices in a number of areas,
including possible off-label promotion
Johnson & Johnson (December 2003) disclosed that it received a subpoena
from the U.S. Attorney’s Office in Boston regarding promotional activities for one
of its products, including alleged off-label marketing
GSK (February 2004) disclosed that the U.S. Attorney’s Office in Colorado is
investigating its sales and marketing practices for a number of its drugs; the
allegations include off-label promotion
Eli Lilly (March 2004) disclosed that the U.S. Attorney’s Office in Philadelphia
was investigating its US marketing and promotional practices for several drugs,
including its communications to physicians
Bristol-Myers Squibb (August 2005) disclosed that it has received a
subpoena from the U.S. Attorney’s Office in Boston relating to alleged off-label
promotion of one of its products
Genentech (August 2005) disclosed that it is under investigation by the U.S.
Attorney’s Office in Philadelphia for alleged off-label promotion
Serono Settlement
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Case involved allegations of illegal sales and marketing
activities surrounding the drug Serostim, approved for
the treatment of a condition known as “AIDS wasting.”
October 17, 2005 settlement includes $704 million
settlement payment, a guilty plea to criminal conspiracy,
exclusion for five years from participation in federal
health care programs and a comprehensive Corporate
Integrity Agreement
In addition to allegations of kickbacks to physicians, the
government asserted that Serono had caused the
submission of false claims for reimbursement, which were
based on tests developed by Serono to diagnose the
condition of AIDS wasting that the government found to
be inaccurate
Latest Views from DOJ
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“Jeffrey Bucholtz, Dep. Asst. Attorney General at
Department of Justice
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Activities raising “red flags”
 Paying doctors to attend meetings in expensive
restaurants, sporting events or exotic locales to hear
presentations about off-label uses
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Paying large fees to “thought leaders” to give speeches
touting off-label uses
Directing sales reps to market a drug to doctors who,
because of their specialty, are very unlikely to ever
prescribe the drug for the approved use
Using medical liaisons to recommend off-label uses
Making promotional claims that are not truthful, balanced
or substantiated
Conclusion (Part I)
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Off-label marketing remains a prime focus of
government investigations of the
pharmaceutical industry
Government is highly focused on cases where
the generation of off-label sales is a home
office approved strategy
Impact on Compliance
Department Activities
Compliance Program Structure
Governance
Compliance Professional
Employee Training
Reporting
Policies & Procedures
Corrective Action
Monitoring &
Auditing
Compliance Perspective
Board &
Executive
Committee
Code of Conduct
Corporate Policies
Corporate
Compliance
Program
Compliance Standards
Financial Risk
Regulatory Risk
Systems/IT Risks
Operational Risks
Standard
Operating Procedures
Day-to-Day Operations
Departmental
Procedures
The Compliance Program Design Dilemma
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Designing an integrated compliance
program that operates as one unit
rather than many silos is challenging
The business’s processes and operations
often function in silos
The compliance-related risks touch
every aspect of the organization’s
business & are difficult to
“compartmentalize”
The design should be based upon the
organization’s business strategies
The design should result in an
organization-wide compliance
monitoring plan
Drivers of an Effective Compliance Program
Federal
Sentencing
Guidelines
OIG Guidance
X
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X
X
X
X
Employee
Training
X
X
Reporting
System
X
X
Auditing &
Monitoring
X
X
Policies &
Procedures
X
X
Corrective
Action
X
X
Compliance
Structure
/Governance
Chief
Compliance or
Risk Officer
Code of
Conduct or
Ethics Code
Employee
PhRMA
Code
X
X
Governmen
FDA t Price
GxPs
Reporting
Pre-Approval
Inspections
(PAI) and PAI
responses
FDA Promotional
Practices
Quality
System
(QSR)
The Role of Compliance in the Off-Label Crisis
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Primary Purpose
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Secondary Purpose
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Minimize adverse consequences to the company in the event illegal offlabel promotion conduct is identified
“Get Out Of Jail Free” Card
Examining the Evidence
 Intentional Acts
 Reckless Acts
 Innocent Mistakes
The Key Objective of the Compliance Program
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Prevent illegal conduct related to off-label activities
Protect the assets of the company
The ability to identify the elements in action
Making sure the program works
The Critical Success Factors
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Scaling the approach
Not “biting off more than you can chew”
Identify Business Gaps and Risks
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Identify the regulations, guidelines, standards that apply to the
respective process
Identify existing process from a-z, ie: sales rep makes a sales
call, customer requests “off-label” information, etc. Include all
business functions that relate to the activity
Once the “as is” process is outlined, identify controls that are
missing in the process, ie: clearly defined roles, objective
policies, systems which have controls validated throughout the
process, IT/manual systems for collecting data, duplications etc.
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Policies, ie: CME, Grants, Handling Off-label discussions, Med
Ed, expenses, et.
Systems, ie: data integrity, function, checks and balances
Define “to be” process and identify action steps to address the
gaps in the “as is” process
Risk Identification & Ranking Process
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Identify risks
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Rank risk criticality
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Locate risk potential in business
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Evaluate risk management status
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Determine risk likelihood
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Incorporate management of risk into compliance
program
Locate Risk Potential in Business –
Product Information Dissemination
Commercial
Activities
Promotional
Materials
Sales Calls
Standards
•Food, Drug & Cosmetic Act
•FDA Promotional Regulations
•FDA Guidance on Industry-Supported
Scientific and Educational Activities
•ACCME Guidelines for Commercial
Advisory
Boards
Convention
Booths
Support of Continuing Medical Education
•Government Investigation Settlements
and Corporate Integrity Agreements
•PhRMA Code on Interactions with Healthcare
Professionals (2002)
Third Party
(CME) Grants
• HHS OIG Compliance Program Guidance for
Pharmaceutical Manufacturers
•Court Decisions
Reprint
Dissemination
•Food and Drug Administration Modernization
Act of 1997
There are numerous inherent risks and those risks touch aspects of
every business process within the commercial organization
Compliance Approaches to Mitigating
Off-Label Risk
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Is there a committee that reviews issues related to off-label
activities?
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Is there an employee handbook, code of conduct or operational
policies and procedures that addresses off-label activities?
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Anonymous Complaint System
Is there a mechanism to review compliance with company policies on offlabel activities?
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Employee Education
Is there a hotline or reporting mechanism for off-label complaints?
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Compliance Standards
Are there training programs around off-label activities?
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Compliance Committee
Auditing & Monitoring
Is there an employee discipline system for unauthorized off-label activities?
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Corrective Action
Getting Started - Implementing OffLabel Compliance
Strategic Decisions:
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Will the company prohibit all off-label
communications?
Will the company allow off-label communications
that meet the safe harbor requirements?
The company’s decision will impact all
compliance program components
Getting Started - Implementing OffLabel Compliance
Risk Assessment
Identify the off-label risks that are potentially
critical or significant and require incorporation into
the formal compliance program
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Rank risk criticality based on:
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Risk potential in business
Risk likelihood
Status of risk management currently in the company
Getting Started - Implementing
Off-Label Compliance
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Compliance Committee
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Off-Label Compliance Standards
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Build a communication channel to find out about off-label compliance-related complaints or
issues
Monitoring
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Develop training materials which address off-label compliance
Identify participants and roll out mandatory training
Anonymous Complaint System
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Develop compliance policies and procedures addressing off-label activities
Employee Education
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Integrate off-label-related compliance structure into the company’s enterprise-wide
Compliance Program
Conduct audits or self-assessments as part of an ongoing auditing and monitoring cycle
Corrective Action
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Keep track of employee discipline that relates to a failure to comply with company policies on
off-label compliance
Create a Compliance “Crosswalk”
Monitoring plan should be designed with the
Compliance Program dilemma in mind.
 Monitoring creates the crosswalk between the
Business Strategies and the Risk Areas.
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Monitoring
Vaccines will be available
for the public
Business Strategy
Will be impacted by
many risk areas
Quality Control and
Drug Safety
Monitoring
Risk Area
Apply to more than
one business strategy
Auditing and Monitoring Cycle
Define
Review Scope &
Assumptions
Develop Review
Criteria
Define Review
Sample
Reaudit
Education,
Remedial Action
Finalize Report &
Corrective Action
Plan
Define Methodology
Review
Process for
Each Risk Area
Test Inter-rater
Reliability with
Multiple Reviewers
Conduct Review
Obtain
Management
Response
Validate Findings
Document
Observations & Findings
Practical Considerations
Related to Auditing and
Monitoring Strategy
Practical Considerations Related to
Auditing and Monitoring Strategy
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Developing your Auditing and Monitoring Plan
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Deciding what to monitor
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Prioritize Risk Areas
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Internal Factors, i.e. any system changes, people changes, new practice, etc.
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External Factors, i.e. new regulation, national and local enforcement activity
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Compliance Program evaluation
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Identify controls that make the process work : PROCESS AUDIT
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Determine overall purpose effective: OUTCOMES AUDIT
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Resources available to execute plan
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Consider integration with Internal Audit Plan
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Identify timeframes for audits
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Communication and Commitment to Plan
Developing Your Audit Approach
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Deciding the scope
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Narrow down the purpose of the audit
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Avoid scope creep before you start
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Resources available to execute the audit
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Methodology
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Sample size determination
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Communication/Reporting Results
Sampling Methodology
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What should you consider before you decide
what your sample size will be?
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Are you trying to figure out whether there is really a
problem?
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What is the organization’s perspective on “fixing” problems?
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What resources are available to audit this area?
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Does Senior Management agree this risk area is important?
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Who do you expect to share the information with and what
is their frame of reference?
What is the worst case scenario if this audit reflects
unfavorable outcomes?
Attorney/Client Privilege?
Continuous Monitoring Cycle
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Monitoring never ends… each review leads to the next, and the monitoring
plan and unplanned issues drive additional monitoring activities. It is a
continuous process…
Re-audit and add new
audits to the cycle
Finalize Report
& Corrective
Action Plan
Obtain
Management
Response
Define
Review Scope &
Assumptions
Define
Finalize Report Review Scope &
& Corrective
Assumptions
Action Plan
Finalize Report
& Corrective
Action Plan
Develop Review
Criteria
Define
Review Scope &
Assumptions
Develop Review
Criteria
Obtain
Management
Response
Document
Observations
& Findings
Define
Review
Sample
Document
Observations
& Findings
Document
Observations
& Findings
Conduct Review
Test
Interrator
Reliability
Define
Review
Sample
Conduct
Review
Conduct Review
Re-audit and add new
audits to the cycle
Develop
Review
Criteria
Define
Review Sample
Test
Interrator
Reliability
Corrective Action Plan
Area of Focus
1. Contract load
Finding
1.
2.
20% data errors
in contract load
Etc.
Recommendation
Management
Action Plan
Acct/Timeframes
Periodically review
data entry
Develop a periodic
review system
Etc.
Accountable Party:
John Smith, VP
Timeframe:
2nd Quarter
Training
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Corporate compliance training
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Online courses include:
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Online
Classroom
CD-ROM
Code of Ethics
Code of Conduct
Interactions with Healthcare Professionals
“Now You’re A Manager”
Careful Communication
Upcoming: Marketing & Promotion Basics
100% completion of online courses
Integration into Business Strategy
 Use monitoring findings to develop and
document ROI
 Assist the business process owners to identify
root cause of findings
 Use corrective action to enhance efficiency
and mitigate risk
 Organization-wide (vs. silo) allow program
leverage
Sample Report Card
Privacy
Department
Inducements
Develop the Report Card
Risk Area
Privacy Notice
Employee Training
Complaints
Admissions
Employee Discipline
Customer
Service
Or
Authorizations
Minimum Necessary
Access to Records
Amendment of Records
Marketing
Confidential Communications
Facility Directory
Medical
Records
Business Associate
Agreements
Summary
 An effective Auditing and Monitoring approach provides a
method to:

Assist in identifying risk to the business that may have been otherwise
undetected internally
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Assist by identifying if the controls developed to remediate a risk are
working and have actually helped to mitigate the risk

Assist with preventing a real and/or potential risk from escalating by
early detection through auditing which may help avoid additional
harm to the company’s business
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Provides a “good faith” organization the ability to approach their real
and/or potential risk weaknesses with a reasonable, scaleable method
 Auditing and Monitoring is a critical element for an effective
compliance program which helps to drive compliance and
behavior.
Sheryl Vacca, CHC
West Coast Practice Leader
Life Sciences and Health Care Regulatory
Deloitte & Touche LLP
(714) 436-7710
svacca@deloitte.com
Ms. Vacca is the West coast Leader for Deloitte & Touche’s National Life Sciences and Health Care Regulatory
practice. She has assisted several life science companies develop their compliance programs, investigations,
perform risk assessments and develop auditing and monitoring plans for the compliance department. She has
significant experience consulting with life sciences and health care organizations on compliance issues
including self disclosure, writing plans of correction, implementing systems in response to plans of correction,
implementing QA systems and general regulatory compliance.