What is Off-Label Marketing?

In 2013, False Claims Act recoveries reached record levels, drawing in more than $3.8 billion in settlements and judgments.  A staggering amount of that recovery – more than $2 billion – came from a little known aspect of healthcare fraud called “off-label marketing.”  The massive settlements related to off-label marketing make one thing clear: familiarity with the concepts of this scheme can enable pharmaceutical company insiders to bring successful False Claims Act cases and return significant funds to the government.

What Does Off-Label Marketing Really Mean?

All pharmaceutical drugs sold in the United States must be approved by the United States Food and Drug Administration prior to being marketed for public consumption.  In seeking approval, a pharmaceutical company must identify a selected “indication,” which is the ailment that the drug is intended to treat, relieve, or cure.  When the FDA approves a drug, the approval is limited to that identified indication.  When a patient is prescribed the drug for its approved use, the prescription is referred to as “on-label.”  However, when a patient is prescribed the drug for any other purpose, it is referred to as “off-label.”

It is important to remember that prescribing or using a pharmaceutical drug off-label is not illegal.  A physician has the ultimate discretion to prescribe a drug that he or she determines to be medically appropriate.  Studies have found that up to 20% of drugs are prescribed off-label, and the percentage increases significantly for certain types of medication.[1]  Certain ailments are also more likely to be treated with an off-label prescription.  For example, even in the early 1990’s, more than half of cancer patients received at least one off-label drug as part of their treatment regimen.[2]

However, even though off-label usage is not illegal or uncommon, it simply cannot be guaranteed to be safe or effective.  Off-label use of a drug essentially amounts to experimentation – usage without the benefit of proven outcomes or known side-effects.  For some physicians and patients, the potential reward is worth the risk, particularly if other drugs have not been able to help a patient.  So while the FDA does not interfere with a physician and patient’s discretion to choose a course of medical treatment, it does retain the discretion to regulate the promotion of a drug for off-label uses.

Pharmaceutical marketing is typically guided by the Food, Drug, and Cosmetic Act (“FDCA”).  Under the FDCA, drug companies are prohibited from marketing or promoting drugs for anything other than the approved uses.  Specifically, a drug is considered “misbranded” if its labeling includes information about an indication that has not been approved by the FDA.   Labeling does not mean just the information on the product’s packaging – it also covers any promotional material associated with the product.  The FDCA provides criminal liability for companies that violate the promotional rules.

The Center for Medicare and Medicaid Services (“CMS”) also regulates off-label use of prescription medications by prohibiting payment for drugs for a non-approved indication.  Both Medicare and Medicaid cover prescription drugs to varying extents, but both include limitations that require the medication be used for a medically-necessary indication.  The statutory language varies a bit between the two programs, but essentially, both programs require that the medication be used for an on-label purpose or be listed in certain approved compendia to qualify for reimbursement.

The governing regulations related to both the FDCA and CMS are very complex.  Any suspicions about a company’s marketing conduct, or whether government payments are proper, should be discussed with an experienced False Claims Act attorney.

Does the Government Really Care about Off-Label Marketing?

In short – absolutely.

In the past ten years, the United States government has shown an unparalleled interest in prosecuting and recovering funds for off-label promotion and marketing of pharmaceutical drugs.  Off-label marketing cases make up some of the largest healthcare fraud settlements in the history of the United States, including:

Of course, these cases are notable because of their very high settlement values.  Not every off-label case is expected to bring in billion-dollar settlements, and you should not be deterred from bringing a case just because it may have a smaller damage calculation.

If you believe you have information regarding the off-label promotion and marketing of a pharmaceutical drug and are considering bringing a False Claims Act case, please contact James Hoyer for an evaluation of your claims.  Click here for more information about the firm and to submit your information electronically, or you may contact our office at 813-397-2300.



[1] David Radley, Stan Finkelstein, Randall Stafford, “Off-label Prescribing Among Office-Based Physicians,” Archives of Internal Medicine, 2006.

 

[2] “Off-Label Drugs: Reimbursement Policies Constrain Physicians in Their Choice of Cancer Therapies,” General Accounting Office, Report to the Chairman, Committee on Labor and Human Resources, U.S. Senate, September 1991.

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