Off-Label Marketing Fraud

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What is off-label marketing fraud?

Off-label marketing fraud refers to the illegal practice of promoting or selling pharmaceutical drugs, medical devices, or other healthcare products for uses that have not been approved by regulatory agencies like the U.S. Food and Drug Administration (FDA). These unapproved uses are called off-label uses.

Typically, before a drug or medical device can be marketed to the public, the manufacturer must submit clinical trial data to the FDA for approval. The approval is based on specific indications (conditions or diseases) for which the product has been proven to be safe and effective.

Sometimes, healthcare providers may prescribe drugs or devices for conditions or patient populations that the FDA has not approved. These off-label uses can be legal if the healthcare provider determines that the drug or device might benefit the patient in a particular situation, based on their professional judgment or existing evidence. However, it may become fraud when a company actively promotes a drug or device for off-label uses, in violation of FDA regulations. This can include advertising a drug or device for an unapproved condition or patient group, providing incentives to doctors or healthcare providers to prescribe the product off-label, and distributing materials that suggest off-label uses without appropriate scientific evidence.

Why is off-label marketing fraud bad?

Simply put, off-label marketing fraud puts patient health at risk. Drugs and medical devices are approved based on clinical trials that demonstrate their effectiveness for specific conditions. Approved uses come with recommended dosages and monitoring guidelines, but off-label uses often lack these safeguards. Promoting drugs and medical devices for unapproved uses can expose patients to treatments that may not be effective, and may in fact have adverse side effects, drug interactions, or complications that the manufacturer or the patient’s healthcare provider might not anticipate. When patients use medications or medical devices for off-label uses, they may not be fully informed about the risks or lack of proven benefit, and their condition may worsen as they delay proper treatment.

Pharmaceutical companies and medical device manufacturers may be incentivized by profit to promote their drugs or devices for off-label uses. This can lead to unnecessary prescriptions of expensive drugs or treatments that might not work for the patient’s condition, driving up costs for healthcare providers, insurance companies, and taxpayers, without improving patient outcomes. Furthermore, when healthcare providers are improperly incentivized to prescribe drugs or devices off-label (for example, through kickbacks or other forms of compensation), they may feel pressured to make decisions that are not in the best interest of their patients.

Does the government care about off-label marketing fraud?

The Department of Justice (DOJ) has been actively involved in investigating and prosecuting pharmaceutical companies and medical device manufacturers for off-label marketing practices. Many of those enforcement actions have resulted in some of the largest healthcare fraud settlements in history.

  • GlaxoSmithKline paid $3 billion in 2012 to settle charges of illegally marketing Paxil and Wellbutrin for off-label uses and failing to report safety data about Avandia to the FDA. GSK had promoted the antidepressant drug Paxil off-label for patients under the age of 18, despite studies showing the drug was ineffective for that population and may increase their risk of suicidal thoughts and behavior. The case resulted in the largest healthcare fraud settlement in history.
  • Pfizer paid $2.3 billion in 2009 for illegally promoting drugs like Bextra, Geodon, Zyvox, and Lyrica for off-label uses. For example, although Bextra had been pulled from the market in 2005 due to concerns that it increased the risk of strokes and heart attacks, stomach bleeding, and a fatal skin reaction, Pfizer still promoted it for uses and dosages the FDA did not approve.
  • Johnson & Johnson paid $2.2 billion in 2013 to resolve criminal and civil charges related to the off-label marketing of drugs like Risperdal, Invega, and Natrecor, as well as the payment of kickbacks to physicians to prescribe those drugs. J&J had promoted the antipsychotic drug Risperdal for use in vulnerable populations—including elderly dementia patients, children with autism or ADHD, and individuals with mental disabilities—even though the drug could increase the risk of diabetes, strokes, and hormonal imbalances.
  • Eli Lilly paid $1.42 billion to resolve criminal and civil charges related to promoting Zyprexa for unapproved uses and minimizing the risks of severe side effects. The $515 million criminal fine, the largest ever in a healthcare case, was also the largest individual corporate criminal fine in history.
  • Insys Therapeutics paid $225 million to settle allegations of engaging in fraudulent off-label marketing of Subsys, a powerful and highly addictive fentanyl-based painkiller intended for adult cancer patients, as well as paying bribes to doctors to prescribe the drug to patients who didn't need it.

What role do whistleblowers play in exposing off-label marketing fraud?

Off-label marketing fraud can involve the violation of multiple laws, including the Food, Drug and Cosmetic Act, the Anti-Kickback Statute (AKS), and the False Claims Act (FCA). Under those laws, if a healthcare provider submits claims to federal healthcare programs (like Medicare or Medicaid) for off-label uses of drugs or devices, or stemming from improper inducements by a pharmaceutical company or medical device manufacturer, those claims are considered fraudulent and can lead to significant penalties.

Many off-label marketing fraud cases have been brought to light through whistleblower lawsuits by employees or insiders with firsthand knowledge of illegal activity. As an incentive, whistleblowers can receive a portion of any financial settlement paid to the government. More importantly, whistleblowers can also help protect patients from unsafe or ineffective drugs or treatments.

How can you blow the whistle on off-label marketing fraud?

Whistleblowing can be a complex legal process, and it’s essential to consult with a lawyer who specializes in these cases. An experienced attorney can advise you on how to protect your identity and avoid retaliation from your employer, guide you through the process of filing a whistleblower lawsuit under the False Claims Act, and ensure you have all the legal and procedural knowledge necessary to file a strong case. If you would like more information or to speak to an attorney at Whistleblower Partners, please contact us for a confidential consultation.

These descriptions of off-label marketing fraud are general in nature and do not constitute legal advice. Off-label marketing fraud violations are complex and ever-evolving. The attorneys at Whistleblower Partners understand the complicated, constantly changing legal landscape and are happy to discuss any potential matter further.

If you would like more information or would like to speak to an attorney at Whistleblower Partners, please contact us for a confidential consultation.