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Regulatory Off-Label Communications Conference © 2011 Fox Rothschild 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 - Liability for a civil penalty calculated on a per-claim basis - Plus three times the damages sustained by the government Broadly defines “knowing” - 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 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 - Amended FDCA to: Ensure prescription drugs are safe and effective Avoid risk from, e.g., misbranded drugs - Violations lead to civil and/or criminal consequences
Regulatory Off-Label Communications Conference © 2011 Fox Rothschild Policies and Guidance HHS OIG - Compliance Program for Pharmaceutical Manufacturers (68 Fed. Reg. 23731 (May 5, 2003)) Elements of an effective compliance program Specific risk areas for manufacturers - Encourages “hotline” reporting when sales representatives promote off-label uses - Regulatory safe harbors May shield remuneration paid by pharma companies 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 - 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 - OIG recovers $1.6 billion and excludes over 3,400 people 2007 - 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 - 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 - FCA “qui tam” actions - SEC whistleblower bounty
Regulatory Off-Label Communications Conference © 2011 Fox Rothschild “This Just In …” $950 million over drug marketing - $321 criminal fine; misdemeanor guilty plea; $226 million to settle federal civil claims and another $202 million to state Medicaid agencies Corporate officials sent to jail & fined - 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 - 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: - Misbranded drugs 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 E-mails Inspections and Audits Whistleblower claims Payments to physicians Competitors S.E.C. disclosure statements Regulators review Internet, TV, radio
Regulatory Off-Label Communications Conference © 2011 Fox Rothschild 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 in- house 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 - “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)) - 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)) - 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) - 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 off- label uses, as determined by independent medical personnel
Regulatory Off-Label Communications Conference © 2011 Fox Rothschild Social Media Defining “social media” - Twitter, Facebook, YouTube, websites, blogs Lack of FDA guidance - 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: - 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 - 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 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 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 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 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 firstname.lastname@example.org
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