The Growing Role of HHS-IG/DOJ, & Whistleblowers, In Drug Marketing Policy John F. Kamp August 25, 2005

Pharmaceutical Industry Cases Since 2000 Total fines: approx. $ 3.1 Billion TAP - $ 885 Million Abbott - $ 600 Million Pfizer - $430 Million AstraZeneca - $ 355 Million Schering-Plough - $345 Million Bayer A.G. - $ 257 Million GlaxoSmithKline - $ 88 Million Pfizer-$49 Million Dey Laboratories - $ 19 Million BayerA.G. $ 14 Million

OIG/DOJ/US Attorneys Offices OIG Fraud Alert: Prescription Drug Marketing Schemes – August 1994 False Claims Act Qui Tam Actions (Whistle blowers) Anti-kickback Law FDA Act

Qui Tam Action enables persons with evidence of fraudulent wrong doing to sue for recovery of ill- gotten gains on behalf of the government and to retain a share of the proceeds

Drug Marketing Allegations False Claims Act prohibits the filing of a false claim or the causing of the filing of a false claim Medicaid will not pay for prescription drugs unless the use of the drug is in labeling or is listed in specific compendia The majority of prescriptions for some drugs are for off-label uses.

One Example United States of America and David Franklin, Relator v. Parke-Davis Alleges that Parke-Davis “engaged in fraudulent scheme to promote sale of Rx drugs for off-label uses Illegal marketing campaign caused submission of false claims to VA and to the federal government for Medicaid benefits

Allegations in Parke-Davis DOJ press release June 7, 2004 “Warner-Lambert promoted Neurontin even when scientific studies had shown it was not effective”

Allegations in Parke-Davis (cont'd) DOJ press release June 7, 2004 Sponsored “independent medical education” with extensive input from Warner-Lambert regarding topics, speakers, content and participants.”

The Pathway “Parke-Davis markets Neurontin to doctors, who prescribe it for their patients, who take the prescriptions to their pharmacists, who file claims for Medicaid reimbursement”

The Issue The Court said: “the only issue is whether Parke- Davis ‘caused to be presented’ a false claim, and § 3729 does not require that the “cause” be fraudulent or otherwise independently unlawful. What it means is that: Even the dissemination of “valid” off-label information can make you liable under the FCA. How would you establish the validity of off-label information?

The Result Pfizer pled guilty to two criminal counts of violating the Federal Food Drug & Cosmetic Act for misbranding the drug and for introducing an unapproved drug into interstate commerce

Investigations OIG I US Attorneys (Boston and Philadelphia in the lead) Looking for paper trails regarding proactive campaigns for off-label use Position descriptions Performance evaluations I Voice mail directives Where do drug marketing practices cross the line?

Investigations of FCA Cases Financial incentives for off-label use Failure to identify the company’s funding for CME programs about the off-label use Health consequences Disparate promotional activity and resources for an approved use with a small market May be used to open the door to broader marketing investigation

Federal Anti-Kickback Law The knowing and willful act of: Offering or paying cash or any in-kind remuneration to providers to induce the ordering or purchasing of products that are covered by and ultimately paid for under federal health care programs

Anti-Kickback Law Prohibits in the health care industry some practice that are common in other business sectors Criminal prohibition against payments in any form made purposefully to induce or reward the referral or generation of Federal health care business If any one purpose of the remuneration may be to induce or reward the referral or recommendation of business payable in whole or part by a Federal health care program

Affects Traditional Activities Providing consulting and auditing services to customers Use of physician consultants and advisors Providing trips to conferences and seminars “Unrestricted educational grants” to MCOs, medical practices, and hospitals

Corporate Integrity Agreements Not limited to conduct in plea bargain Will evaluate policies and practices: Physicians as speakers, consultants and as members of advisory boards Sponsorship of meetings, social events, etc. Educational, clinical and research grants Gifts Samples Customer assistance programs

OIG Guidance The PhRMA Code “provides useful and practical advice for reviewing and structuring these relationships” “Although compliance with the PhRMA Code will not protect a manufacturer as a matter of law under the anti-kickback statute, it will substantially reduce the risk of fraud and abuse and help demonstrate a good faith effort to comply with the applicable federal health care program requirements”

State Attorneys General Multi-state investigations Based on a variety of statutes prohibiting false claims or unfair or deceptive marketing practices May affect state Medicaid programs Seek money damages and costs

Who Else Watching? More than 35 state Attorneys General would like to repeat the success of the nationwide campaign against tobacco Class-action law suits from consumer groups alleging false and deceptive marketing

Serious Policy Questions Off label use important to the public health FDA recognizes “Safe Harbors” Independent CME Scientific Exchange Reponses to Legitimate Questions Statutory Provisions FDA v. WLF

Serious Policy Issues WLF Letter to Department of Justice, March 2005 Appropriate DOJ Policy Oversight Patient Needs v. Lowering Cost Primacy of the FDA Middle Ground Support First Amendment Challenge

Coalition Public Response Public Policy Dialogue Needed Danger to Public Health Professional Judgment of Doctors Value of FDA Expertise See Coalition Statement: