Consequences of Pharmaceutical Fraud Settlements: Off-Label Marketing Continues?

Reporter Susan Todd wrote a fine article in the June 6, 2010 Star –Ledger about off-label marketing.

“There are very few companies that haven’t had their turn in the wheelhouse to get a spanking,” according to a quote in the article by Ira Loss, an independent analyst who follows the pharmaceutical industry. “I tend to think the pressure put on these salesmen to hit targets and goals leads to misbehavior.”

Off-label marketing allows pharma companies to increase profit from their best-selling products. This illegal shortcut is alluring because the companies don’t invest in further FDA approvals. Pfizer generated $10 billion in about five years selling its seizure drug Neurontin for unapproved uses.

Doctors may prescribe medicines for unapproved uses, but pharma companies cross the line when their reps sell physicians on the idea of using drugs for off-label purposes, sometimes with inducements and misrepresentations.

These violations of the False Claims Act will continue, one expert said, as long as drug companies make more on off-label promoting than they lose in fines. But big financial penalties and the threat of having medicines taken off Medicare, Medicaid and other formularies could make the risk too great.

Frank Palumbo, executive director of the University of Maryland School of Pharmacy Center on Drug and Public Policy, said in the article: “I think companies are on notice at this point to make sure they’re in compliance. Adopting a corporate integrity agreement puts a company on notice that they need to be more proactive about their sales reps are doing.”

For more information about qui tam law and pharmaceutical fraud, contact Nolan and Auerbach, PA.