Fraud goes where money flows. This statement is particularly true in the growing prescription drug market, which has been fraught with illegal marketing schemes for years. Government and private qui tam lawsuits showed that many of the world’s top 20 pharmaceutical manufacturers have allegedly illegally marketed drugs for unapproved uses.

Manufacturers of orphan drugs have remained largely under the government’s False Claims Act radar screen. However, monetary incentives are quickly aligning such that dishonest manufacturers will increasingly deploy off-label marketing schemes that run afoul of the False Claims Act.

The most troubling development on this front came out of the D.C. District Court. In a case that pitted the government against PhRMA, the court ruled that orphan drug manufacturers may obtain full price for their drugs even when they are prescribed for off-label uses in 340B rural healthcare providers. The Court rejected the government’s argument that the off-label uses of orphan drugs were capped at the deeply discounted price spelled out in section 340B of the Public Health Services Act.

This development encourages dishonest orphan drug manufacturers to ramp up off-label marketing campaigns, all while hiding behind the extended term patent exclusivity afforded by the Orphan Drug Act. Combined with orphan drug designations reaching an all-time high, the government needs potential whistleblowers to closely monitor the marketing plans and activities of orphan drug manufacturers. Off-label marketing will surely wade into these newly opened 340B waters.

More information for whistleblowers is located at the Nolan Auerbach & White website.