Off-Label Promotion: Risks, Controls and Assessment
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1 7 th th Annual National Pharmaceutical Congress November 9, 2006 Off-Label Promotion: Risks, Controls and Assessment John T. Bentivoglio Co-Leader FDA/Healthcare Group
2 Overview Basic FDA, Payment Rules The Role of the False Claims Act in Off-Label Promotion Cases Risk Areas and Red Flags Off-Label Promotion Controls Conducting An Off-Label Compliance Assessment 2
3 FDA Rules on Promotion Under the FDCA, new drugs cannot be distributed in interstate commerce unless the sponsor demonstrates to the FDA that the drug is safe and effective for each of its intended uses. 21 USC Sec. 355(a) & (d). Though physicians may prescribe a drug for a use other than the one for which it is approved, the FDA prohibits drug manufacturers from marketing or promoting a drug for a use that the FDA has not approved. 21 USC Sec. 331(d), 355(a). In some contexts, dissemination of information on unapproved uses may be viewed by FDA as promotional labeling or advertising that fails to meet FDA regulatory requirements and therefore constitutes unlawful off-label promotion in violation of the FDCA. 3
4 Overview of Reimbursement Rules Medicaid reimbursement is available only for covered outpatient drugs, i.e., drugs used for a medically accepted indication. 42 USC Sec. 1396b(i)(10). A medically accepted indication includes: (1) an FDA-approved indication, and (2) certain other indications in specified drug compendia. Id. Sec. 1396r-8(k)(6), Sec. 1396r-8(g)(1)(B)(i). Medicaid reimbursement is not available for indications outside these two categories. 4
5 Overview of the False Claims Act The False Claims Act imposes liability upon any person who: (1) knowingly presents, or causes to be presented, to the United States Government a false or fraudulent claim for payment or approval; [or] (2) knowingly makes or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government. 31 USC Sec While pharmaceutical manufacturers do not generally submit claims directly to the Federal government, they can be held liable under the FCA for causing a false claim to be submitted (e.g., by a physician). Knowingly is defined in the FCA to mean acting: (1) with actual knowledge, (2) in reckless disregard, or (3) deliberate ignorance of the truth or falsity of the claim. 5
6 What s the Link? DOJ has taken the position that the submission of an off-label prescription -- i.e., a not-covered outpatient drug -- for Medicaid reimbursement is a material misrepresentation made to obtain a government benefit and therefore constitutes a false claim under the FCA. Excerpt from DOJ Statement of Interest in the Parke-Davis (Neurontin Case): Parke-Davis illegal conduct caused the pharmacists to submit claims that as a result were (unknowingly) false and/or fraudulent representations that the supplies or products billed were procured in accordance with all laws and regulations governing Medicaid and thus eligible for reimbursement. U.S. Statement of Interest at 8 Civ. No PBS May 23,
7 Risk Areas and Red Flags* Sales Force Activities Consultants and Speakers CME and Independent Medical Education Programs MSLs Statements to Payors Reimbursement Support Submissions to Formulary Sponsors, Compendia * Listing of activities does not mean or imply that these activities are necessarily unlawful or inappropriate 7
8 Risk Areas and Red Flags -- Sales Force Activities Small market for approved use vs. large sales force Incentive compensation plans that include off-label sales Call plans that include HCPs not likely to prescribe on label Providing samples to HCPs not likely to prescribe on label Providing off-label information to sales reps for background purposes (particularly where other controls are lacking ) Sales force involvement in non-promotional programs Preceptorships with HCPs not likely to prescribe on label Permitting sales reps to answer off-label questions, provide offlabel information Special issues for device companies -- sales reps in operating room for off-label procedures, etc. 8
9 Risk Areas and Red Flags -- Consultants Hiring of consultants not likely to use the product on label Hiring of more consultants than is reasonably necessary to meet legitimate business purpose Provision of excessive amounts of off-label information to consultants when compared to desired feedback/issues Failure to collect and use feedback from consultants for intended business purpose Tracking of ROI or similar analysis on effectiveness of consulting programs 9
10 Risk Areas and Red Flags -- Speakers Training more speakers than reasonably necessary to achieve legitimate business purpose Providing more off-label information to speakers than necessary to train them for promotional presentations Targeting of invitees/hcps not likely to prescribe on label Planting questions with attendees to raise off-label issues that will be discussed in front of other attendees Speaker programs with small number of attendees, peer-to-peer (or one-on-one) presentations Focus groups or other informal meetings/discussions led by an HCP paid by the manufacturer 10
11 Risk Areas and Red Flags -- CME and IME Programs Sales force involvement in submission, review, and approval of CME/IME funding Marketing involvement in CME/IME funding Lack of controls ensuring independence of CME/IME programs from manufacturer CME/IME funding to specialty societies, patient groups 11
12 Risk Areas and Red Flags -- MSLs Placement of function in and/or reporting relationships to commercial executives Incentive compensation similar to field sales force Affirmative call plans Close alignment with activities of sales representatives (e.g., ride alongs) Job descriptions and/or performance evaluations not consistent with non-promotional roles (e.g., metrics for time in field) Participation in promotional programs (e.g., speaker programs) 12
13 Risk Areas, Red Flags -- Other Areas Phase IV funding activities (i.e., support for off-label studies) Reimbursement support/patient assistance activities Submissions/communications to formulary sponsors, compendia Interactions with patient advocacy/support groups, patients Internet activities Web sites Chat rooms Blogs 13
14 Risk Areas, Red Flags -- Miscellaneous DOJ rarely builds a case based on a single activity or event, particularly with respect to off-label promotion Prosecutors will look at a body of evidence -- marketing plans, call notes, s, compensation plans, witness interviews -- when deciding whether to take enforcement action Targeting of non-promotional programs based on HCP prescribing practices Off-label promotion for claims that have been -- and rejected -- by the FDA appear to trigger heightened scrutiny Off-label promotion involving false/misleading information, particularly where it could lead to patient harm/safety issues, also likely to trigger heightened scrutiny 14
15 Potential Controls -- Sales Force Review call plans to reduce/eliminate calls on HCPs unlikely to prescribe on label Back out off-label prescriptions from calculation of incentive compensation Strict and clear rules on what sales reps can/can t say in response to off-label questions Limit amount of background material (i.e., not intended to be used with physicians) provided to sales reps Limit sales rep activities in non-promotional programs Watermark/seal off-label materials that are to be distributed by sales reps DMs are key to achieving compliance goals 15
16 Potential Controls -- Consultants, Speakers Require and review annual plans for use of consultants, speakers Develop clear guidelines for use of consultants, speakers Build in compliance safeguards (including monitoring and/or duty to report compliance problems) in contracts with vendors supporting such activities; consider financial penalties for noncompliant programs Establish minimum number of programs all speaker trainees must do; establish a tracking system to ensure compliance Require sales reps to attend promotional meetings -- and require sales reps to report non-compliance (and sanction sales reps that fail to adequately police such programs) Periodically audit consultant meetings, speaker programs 16
17 Potential Controls -- CME, IME Funding Establish clear rules/procedures to ensure independence of CME/IME programs Program Content Faculty Invitees Enduring materials Limit/eliminate sales force involvement in CME/IME programs Prohibit CME, IME funding to individual HCPs, HCP practices, or non-profit groups closely affiliated with HCPs Focus heightened attention on funding to specialty societies, patient groups (particularly for programs aimed at developing treatment guidelines) 17
18 Potential Controls -- MSLs Reporting relationships and supervision should be outside sales and marketing Compensation should be consistent with non-promotional position Job description and performance goals/metrics should be consistent with non-promotional program Limit interactions with sales force Carefully review affirmative call plans, time-in-field plans Policies should address specific issues: Ride alongs Distribution of off-label information Responding to unsolicited requests Review of funding requests (IME, Phase IV) 18
19 Monitoring and Assessment Identify key products with potential off-label uses Pay particular attention to off-label indications that were considered but rejected by FDA Include products in the pipeline for risks of pre-approval promotion Review policies and procedures to ensure they adequately address current risks Assess whether entire package of policies/procedures is adequate to control risk given product portfolio, etc. Assess whether the field believes management is sending mixed messages on off-label promotion Review internal and external sources for red flags Hotline calls Exit interviews or HR proceedings Warning Letters Competitor complaints 19
20 Monitoring and Assessment (cont d) Review incentive compensation plans Review performance plans Don t limit monitoring/assessment to specific activities -- where possible, look at activities in context (e.g., linkage between marketing plans, product sales goals, call plans) Periodically audit specific programs All documents for a specific consulting meeting Call notes and field contact reports are still providing a treasure trove of evidence to investigators/prosecutors Auditing/monitoring that doesn t include review of s is unlikely to give accurate picture of current activities 20
21 Fine Print These slides and accompanying discussion provide a general overview of legal and regulatory issues. They are not intended to be, and should not be relied upon, as legal advice. The views expressed herein are those of the author and not those of King & Spalding LLP and/or any of its clients. 21
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