Few industries are so heavily monitored and tightly controlled as the pharmaceutical industry. And rightly so since prescription drugs are so widely used. No part of the health care system has grown as rapidly or is more extensively used than the prescription drug benefit. In 2009, the U.S. used 3.9 billion prescriptions at a cost of $300 billion.
Looked at another way, it comes down to this: Every American citizen uses 13 prescriptions and spends $1,000 per year on prescription drugs.
How does a drug come to market?
Long before a pharmaceutical firm can sell a new drug, it must adhere to a long and arduous process of testing.
According to the Food, Drug, and Cosmetics ACT (FDCA), the company must file a New Drug Application (NDA) to the Food and Drug Administration (FDA). The drug then undergoes years of clinical testing to determine its safety and efficacy for its intended use.
Once it passes those tests, the FDA approves its use for only those applications for which it was tested and in the tested dosages.
Drugs are approved for specific, not general, use. Once approved for these “indication or on-label” uses, it may be promoted, marketed, prescribed and administered.
Any pharmaceutical company wishing to extend the usage of an approved drug must submit a Supplemental New Drug Application. The clinical trials process begins once again and continues until such time as the new usage is deemed safe and effective.
Off-Label Use and Marketing
However, the FDA does not prohibit physicians from prescribing drugs for usages which they didn’t initially approve.
They do prohibit however the marketing or promotion of the drug for any unapproved or “off-label” usage by the manufacturer.
This prohibition is designed to protect the public from the unethical promotion of drugs by pharmaceutical companies which haven’t met the government’s rigorous standards for safety and effectiveness.
Off-Label Marketing and Medicare Fraud
If a drug manufacturer promotes off-label use of a drug which is paid for by the government health care providers, Medicare or Medicaid, that manufacturer has violated the False Claims Act (FCA).
Why? Because payment for off-label uses of prescription drugs by these programs is highly regulated and restricted. Usually, drugs prescribed for off-label uses or dosages do not qualify for reimbursement under these programs.
Marketing the drugs in this way would cause the submission of false claims for their reimbursement, a clear violation of the FCA.
How do pharmaceutical companies typically accomplish such off-label marketing? Here are just a few:
- Improperly training pharmaceutical sales representatives about off-label uses and dosages (typically higher than the approved dose)
- Giving sales representatives medical literature that endorses off-label uses
- Giving monetary incentives or kickbacks to physicians in exchange for writing off-label prescriptions
- Hiring doctors to market and promote off-label uses in speaking engagements or medical literature
Another alarming fact: America’s physicians rely on the pharmaceutical industry for a great deal of their most critical information. According to Dr. Jerry Avorn of Harvard Medical School, 80% of U.S. practitioners receive the majority of their pharmaceutical updates from proprietary sales forces from the pharmaceutical industry.
Many of the false claims cases initiated and eventually won against pharmaceutical manufacturers are initiated by whistleblowers. A recent study of such cases, from 1996 to 2010, detailed some of the practices used by pharmaceutical companies to market off-label usage of their drug lines.
- The most common fraudulent practice was to market the drugs as having benefits unapproved by the FDA
- Another tack was to market different dosing strategies and expansion into unapproved indications
- Reps usually market directly to physicians
- They will cite misrepresented data and cite scientific data with errors in their methods
- Many use kickbacks, including trips, gifts, awards and other valuable items
Over 90% of the whistleblowers were individuals either employed by the manufacturer or otherwise closely involved with the marketing of the drugs.
Drug sales reps and their managers were the predominant insiders who had direct evidence and knowledge of the fraud. Over the time period of the study, more than $7 billion had been recovered in settlements.
Report improper off label drug use/Medicare fraud here.
Do you work for a pharmaceutical company or pharmacy that is committing Medicare fraud? Help stop government waste and abuse, and get rewarded for your efforts. Our attorneys have significant experience representing healthcare industry whisteblowers. Complete the secure form on this page or call 1-800-581-1790 for a free no obligation consultation with a lawyer.