December 20, 2012

Stiff Amgen Fine Shows No Slowing Down in Government Prosecution of Off-Label Marketing

By Gordon Schnell

It was only two weeks ago that the Second Circuit Court of Appeals came down with its groundbreaking decision in U.S. v. Caronia.  In a 2-to-1 ruling by a three-judge panel, the appeals court overturned the conviction of a drug company sales representative for promoting a prescription drug for uses not approved by the FDA.  The majority reasoned that banning such off-label marketing violated the sales representative’s constitutionally protected right to free speech.  There has been much disagreement over whether the court got it right in siding with Big Pharma over big government and whether the ruling improperly impedes the FDA’s regulatory function.  But there seems to be little disagreement that, right or wrong, the decision will hamper the government’s off-label enforcement campaign.  This is a crusade through which the government has recovered billions of dollars over the past few years from virtually every major player in the industry.  See What Is Going On With Big Pharma?

Judging from the government’s latest action against biotech giant Amgen Inc., however, it appears that, at least for now, there will be no slowing down in the government’s pursuit of these kinds of off-label claims.  The government not only secured a $762 million payment, the largest False Claims Act settlement by any biotechnology company to date.  It also obtained from the company a guilty plea to a criminal charge of introducing misbranded drugs into interstate commerce.  Click here for the DOJ press release.  The principal drug involved was Amgen’s anemia drug, Aranesp.  The government charged Amgen with promoting it (and other drugs) for off-label uses and dosages that the FDA never approved as safe and effective.  Indeed, the FDA had specifically rejected the off-label uses and dosages Amgen was promoting for Aranesp because of the company’s failure to provide sufficient clinical support.  With respect to one such promoted use — treating anemia for cancer patients not undergoing chemotherapy — the FDA ultimately found the use of the drug increased the risk of death.

The government’s settlement with Amgen is notable not only for the size of the payout, but also for how forcefully the government condemned the practice of off-label marketing .  In the joint press release announcing the settlement, numerous regulators made clear that this kind of misbranding activity will not be tolerated and will be severely punished.  “Today’s resolution reinforces the DOJ’s commitment to cracking down on unlawful conduct by pharmaceutical companies,” said a high-up DOJ representative.  The acting head of the U.S. Attorney’s Office in Brooklyn, Marshall Miller, added: “To all who might consider introducing misbranded drugs into the marketplace, you are on notice — we remain steadfastly committed to prosecuting such violations of law.”  Even the New York Attorney General jumped into the fray with the “clear message” that his office “will continue to ensure that prescriptions be written based on medical judgment — not profit motive.”

With this record settlement and all of the hype surrounding it, the government seemed to go out of its way to signal that the Caronia decision, assuming it stands, will in no way chill its efforts to prosecute and punish off-label marketing by drug companies.  In fact, in a recent New York Times piece, United States Attorney Miller dismissed the decision altogether as merely involving speech by a company sales representative rather than a company’s core business strategy.  “It’s a very different type of prosecution,” he said.

It is also worth noting that the Caronia majority made clear that it was addressing off-label promotional activity that was truthful, not false or misleading.  Since the government’s prosecutions in the off-label area have centered largely on conduct that goes well beyond the sharing of truthful information, Caronia should do little to quell the government’s continued quest to go after off-label marketing.  At the very least, with its aggressive stance against Amgen, that is certainly the message the government is hoping to convey.

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