A Focus on Off-Label Issues Stephen F. Mohr Deputy Compliance Officer AstraZeneca Pharmaceuticals Sheryl Vacca West Coast Practice Leader Life Science Regulatory Practice Deloitte & Touche LLP
Disclaimer The information presented represents the opinions of the authors and does not necessarily reflect the views of AstraZeneca Pharmaceuticals LP or Deloitte & Touche LLP
Topics discussed 2005 Headlines Off-label promotion defined Governing Law Key Risk Areas The Neurontin case Other current investigations Serono settlement Impact on Compliance Departments
2005 Headlines From Rx Compliance Report Lew Morris, Chief Counsel HHS OIG Legal problems associated with off-label promotion have the potential to get even worse under the new Part D benefit About half the pharma companies have truly effective compliance programs in place, and half of them are just giving it lip service. Morris says companies may seek to put on manufacturer-sponsored conferences, get doctors to participate as medical experts, or hire them as consultants in order to push products for off-label uses, knowing that they may be reimbursed under the new Medicare Part D benefit
2005 Headlines From Rx Compliance Report Mary Riordan, Sr. Counsel, HHS OIG With Medicare Part D looming, OIG and Department of Justice will be vigilant in their coordination concerning evaluation of off-label cases
What is Off-label Promotion Marketing of a pharmaceutical product for uses not included in its FDA-approved labeling. Can include information as to unapproved: Indications Dosing Route of administration Patient population
Governing Laws Food Drug and Cosmetic Act False Claims Act Federal Anti-Kickback Statute
Food Drug and Cosmetic Act In order to obtain FDA approval to sell a pharmaceutical product, the manufacturer must demonstrate the safety and effectiveness of the product for its intended uses. Promoting a drug for uses outside of its approved indications constitutes the introduction of an unapproved new drug into interstate commerce in violation of the FD&C Act, 21 USC Sec. 331(d)
False Claims Act Prohibits knowingly presenting or causing to be presented a false or fraudulent claim for payment or approval by the federal government, 31 USC Sec. 3729 In USA ex rel. Franklin v. Parke-Davis, 2003 WL 22048255 (D. Mass.), district court held that the Relator need not prove that Parke-Davis lied to physicians about Neurontin s off-label efficacy in order to state a claim under the False Claims Act. [T]ruthful off-label marketing (ineligible for federal safe harbors) and financial incentives like kickbacks would suffice.
Federal Anti-Kickback Statute Makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce the purchasing or recommending of any item or service that the federal government may purchase or otherwise pay for under Federal health care programs. 42 U.S.C. Sec. 1320a-7b(b). Many cases of off-label promotion also involve allegations of kickbacks, for example consulting programs that are used inappropriately as a venue to deliver off-label messages
Off-Label Implications of Medicare Part D Implementation Formulary activities Expansion of coverage
Business Practices That Can Create Off-Label Risk Sales representative activities Field medical activities Reprint use Third party relationships Pharmacy benefit manager/gpo interactions Use of Consultants
Business Practices That Can Create Off-Label Risk (continued) Use of Speakers Clinical research grants Continuing Medical Education Publications Sampling Activity
The Neurontin Case Neurontin developed by Warner-Lambert (later acquired by Pfizer). Approved by the FDA in 1993 as an adjunctive anti-seizure medication for adult epileptics. Market began to plateau, so Warner- Lambert chose to pursue more off-label sales. Percentage of off-label use grew from 15% in 1994 to 94% in 2002.
The Neurontin Strategic Plan (as described in the Neurontin Sentencing Memorandum) 1997--Home office implemented strategic plan to maximize Neurontin opportunities in emerging applications Elements of the plan Educate the medical profession on emerging use areas Expand the user base beyond those treating epilepsy Expand communication regarding different types of uses of Neurontin Support publications regarding expanded uses of Neurontin Groom thought leaders for peer to peer selling in expanded use areas
Specific Tactics Used to Implement the Neurontin Strategic Plan (according to the Sentencing Memorandum) Direct selling on off-label indications Use of field medical personnel to push off-label use Preceptorships with physicians where off-label uses were discussed Lavish consultant meetings at which off-label uses were discussed Frequent teleconferences at which doctors were paid to speak about off-label topics Sponsoring allegedly independent CME events with extensive input from Warner-Lambert as to content
Neurontin Settlement Settled in June 2004. $430 million settlement payment Criminal guilty plea by Warner-Lambert to violation of the Food Drug & Cosmetic Act Detailed Corporate Integrity Agreement signed with OIG
Other current investigations Schering-Plough (May 2003) disclosed that the U.S. Attorney s Office in Boston is investigating its sales and marketing practices in a number of areas, including possible off-label promotion Johnson & Johnson (December 2003) disclosed that it received a subpoena from the U.S. Attorney s Office in Boston regarding promotional activities for one of its products, including alleged off-label marketing GSK (February 2004) disclosed that the U.S. Attorney s Office in Colorado is investigating its sales and marketing practices for a number of its drugs; the allegations include off-label promotion Eli Lilly (March 2004) disclosed that the U.S. Attorney s Office in Philadelphia was investigating its US marketing and promotional practices for several drugs, including its communications to physicians Bristol-Myers Squibb (August 2005) disclosed that it has received a subpoena from the U.S. Attorney s Office in Boston relating to alleged off-label promotion of one of its products Genentech (August 2005) disclosed that it is under investigation by the U.S. Attorney s Office in Philadelphia for alleged off-label promotion
Serono Settlement Case involved allegations of illegal sales and marketing activities surrounding the drug Serostim, approved for the treatment of a condition known as AIDS wasting. October 17, 2005 settlement includes $704 million settlement payment, a guilty plea to criminal conspiracy, exclusion for five years from participation in federal health care programs and a comprehensive Corporate Integrity Agreement In addition to allegations of kickbacks to physicians, the government asserted that Serono had caused the submission of false claims for reimbursement, which were based on tests developed by Serono to diagnose the condition of AIDS wasting that the government found to be inaccurate
Latest Views from DOJ Jeffrey Bucholtz, Dep. Asst. Attorney General at Department of Justice Activities raising red flags Paying doctors to attend meetings in expensive restaurants, sporting events or exotic locales to hear presentations about off-label uses Paying large fees to thought leaders to give speeches touting off-label uses Directing sales reps to market a drug to doctors who, because of their specialty, are very unlikely to ever prescribe the drug for the approved use Using medical liaisons to recommend off-label uses Making promotional claims that are not truthful, balanced or substantiated
Conclusion (Part I) Off-label marketing remains a prime focus of government investigations of the pharmaceutical industry Government is highly focused on cases where the generation of off-label sales is a home office approved strategy
Impact on Compliance Department Activities
Compliance Program Structure Governance Compliance Professional Employee Training Reporting Monitoring & Auditing Policies & Procedures Corrective Action
Compliance Perspective Board & Executive Committee Corporate Compliance Program Financial Risk Regulatory Risk Systems/IT Risks Operational Risks Code of Conduct Corporate Policies Compliance Standards Standard Operating Procedures Day-to-Day Operations Departmental Procedures
The Compliance Program Design Dilemma Designing an integrated compliance program that operates as one unit rather than many silos is challenging The business s processes and operations often function in silos The compliance-related risks touch every aspect of the organization s business & are difficult to compartmentalize The design should be based upon the organization s business strategies The design should result in an organization-wide compliance monitoring plan Risk Mitigation Business Processes Business Strategy Monitoring
Drivers of an Effective Compliance Program Federal Sentencing Guidelines OIG Guidance PhRMA Code Governmen t Price Reporting FDA - GxPs Pre-Approval Inspections (PAI) and PAI responses FDA - Promotional Practices Quality System (QSR) Compliance Structure /Governance X X Chief Compliance or Risk Officer X X Code of Conduct or Ethics Code Employee X X X Employee Training X X Reporting System X X Auditing & Monitoring X X Policies & Procedures X X X Corrective Action X X
The Role of Compliance in the Off-Label Crisis Primary Purpose Prevent illegal conduct related to off-label activities Protect the assets of the company Secondary Purpose Minimize adverse consequences to the company in the event illegal offlabel promotion conduct is identified Get Out Of Jail Free Card Examining the Evidence Intentional Acts Reckless Acts Innocent Mistakes The Key Objective of the Compliance Program The ability to identify the elements in action Making sure the program works The Critical Success Factors Scaling the approach Not biting off more than you can chew
Identify Business Gaps and Risks Identify the regulations, guidelines, standards that apply to the respective process Identify existing process from a-z, ie: sales rep makes a sales call, customer requests off-label information, etc. Include all business functions that relate to the activity Once the as is process is outlined, identify controls that are missing in the process, ie: clearly defined roles, objective policies, systems which have controls validated throughout the process, IT/manual systems for collecting data, duplications etc. Policies, ie: CME, Grants, Handling Off-label discussions, Med Ed, expenses, et. Systems, ie: data integrity, function, checks and balances Define to be process and identify action steps to address the gaps in the as is process
Risk Identification & Ranking Process Identify risks Rank risk criticality Locate risk potential in business Evaluate risk management status Determine risk likelihood Incorporate management of risk into compliance program
Locate Risk Potential in Business Product Information Dissemination Commercial Activities Promotional Materials Sales Calls Advisory Boards Convention Booths Third Party (CME) Grants Standards Food, Drug & Cosmetic Act FDA Promotional Regulations FDA Guidance on Industry-Supported Scientific and Educational Activities ACCME Guidelines for Commercial Support of Continuing Medical Education Government Investigation Settlements and Corporate Integrity Agreements PhRMA Code on Interactions with Healthcare Professionals (2002) HHS OIG Compliance Program Guidance for Pharmaceutical Manufacturers Reprint Dissemination Court Decisions Food and Drug Administration Modernization Act of 1997 There are numerous inherent risks and those risks touch aspects of every business process within the commercial organization
Compliance Approaches to Mitigating Off-Label Risk Is there a committee that reviews issues related to off-label activities? Compliance Committee Is there an employee handbook, code of conduct or operational policies and procedures that addresses off-label activities? Compliance Standards Are there training programs around off-label activities? Employee Education Is there a hotline or reporting mechanism for off-label complaints? Anonymous Complaint System Is there a mechanism to review compliance with company policies on offlabel activities? Auditing & Monitoring Is there an employee discipline system for unauthorized off-label activities? Corrective Action
Getting Started - Implementing Off- Label Compliance Strategic Decisions: Will the company prohibit all off-label communications? Will the company allow off-label communications that meet the safe harbor requirements? The company s decision will impact all compliance program components
Getting Started - Implementing Off- Label Compliance Risk Assessment Identify the off-label risks that are potentially critical or significant and require incorporation into the formal compliance program Rank risk criticality based on: Risk potential in business Risk likelihood Status of risk management currently in the company
Getting Started - Implementing Off-Label Compliance Compliance Committee Integrate off-label-related compliance structure into the company s enterprise-wide Compliance Program Off-Label Compliance Standards Develop compliance policies and procedures addressing off-label activities Employee Education Develop training materials which address off-label compliance Identify participants and roll out mandatory training Anonymous Complaint System Build a communication channel to find out about off-label compliance-related complaints or issues Monitoring Conduct audits or self-assessments as part of an ongoing auditing and monitoring cycle Corrective Action Keep track of employee discipline that relates to a failure to comply with company policies on off-label compliance
Create a Compliance Crosswalk Monitoring plan should be designed with the Compliance Program dilemma in mind. Monitoring creates the crosswalk between the Business Strategies and the Risk Areas. Vaccines will be available for the public Monitoring Quality Control and Drug Safety Business Strategy Will be impacted by many risk areas Monitoring Risk Area Apply to more than one business strategy
Auditing and Monitoring Cycle Define Review Scope & Assumptions Reaudit Develop Review Criteria Define Review Sample Define Methodology Education, Remedial Action Finalize Report & Corrective Action Plan Review Process for Each Risk Area Test Inter-rater Reliability with Multiple Reviewers Conduct Review Obtain Management Response Validate Findings Document Observations & Findings
Practical Considerations Related to Auditing and Monitoring Strategy
Practical Considerations Related to Auditing and Monitoring Strategy Developing your Auditing and Monitoring Plan Deciding what to monitor Prioritize Risk Areas Internal Factors, i.e. any system changes, people changes, new practice, etc. External Factors, i.e. new regulation, national and local enforcement activity Compliance Program evaluation Identify controls that make the process work : PROCESS AUDIT Determine overall purpose effective: OUTCOMES AUDIT Resources available to execute plan Consider integration with Internal Audit Plan Identify timeframes for audits Communication and Commitment to Plan
Developing Your Audit Approach Deciding the scope Narrow down the purpose of the audit Avoid scope creep before you start Resources available to execute the audit Methodology Sample size determination Communication/Reporting Results
Sampling Methodology What should you consider before you decide what your sample size will be? Who do you expect to share the information with and what is their frame of reference? Are you trying to figure out whether there is really a problem? What is the organization s perspective on fixing problems? What resources are available to audit this area? Does Senior Management agree this risk area is important? What is the worst case scenario if this audit reflects unfavorable outcomes? Attorney/Client Privilege?
Continuous Monitoring Cycle Monitoring never ends each review leads to the next, and the monitoring plan and unplanned issues drive additional monitoring activities. It is a continuous process Re-audit and add new audits to the cycle Finalize Report & Corrective Action Plan Define Review Scope & Assumptions Finalize Report & Corrective Action Plan Develop Review Criteria Define Review Scope & Assumptions Develop Review Criteria Finalize Report & Corrective Action Plan Define Review Scope & Assumptions Obtain Management Response Obtain Management Response Define Review Sample Document Observations & Findings Define Review Sample Develop Review Criteria Document Observations & Findings Conduct Review Document Observations & Findings Test Interrator Reliability Conduct Review Conduct Review Test Interrator Reliability Define Review Sample Re-audit and add new audits to the cycle
Corrective Action Plan Area of Focus Finding Recommendation Management Action Plan Acct/Timeframes 1. Contract load 1. 20% data errors in contract load Periodically review data entry Develop a periodic review system Accountable Party: 2. Etc. Etc. John Smith, VP Timeframe: 2 nd Quarter
Training Corporate compliance training Online Classroom CD-ROM Online courses include: Code of Ethics Code of Conduct Interactions with Healthcare Professionals Now You re A Manager Careful Communication Upcoming: Marketing & Promotion Basics 100% completion of online courses
Integration into Business Strategy Use monitoring findings to develop and document ROI Assist the business process owners to identify root cause of findings Use corrective action to enhance efficiency and mitigate risk Organization-wide (vs. silo) allow program leverage
Sample Report Card Develop the Report Card Department Privacy Inducements Risk Area Privacy Notice Employee Training Admissions Customer Service Or Complaints Employee Discipline Authorizations Minimum Necessary Access to Records Marketing Amendment of Records Confidential Communications Facility Directory Medical Records Business Associate Agreements
Summary An effective Auditing and Monitoring approach provides a method to: Assist in identifying risk to the business that may have been otherwise undetected internally Assist by identifying if the controls developed to remediate a risk are working and have actually helped to mitigate the risk Assist with preventing a real and/or potential risk from escalating by early detection through auditing which may help avoid additional harm to the company s business Provides a good faith organization the ability to approach their real and/or potential risk weaknesses with a reasonable, scaleable method Auditing and Monitoring is a critical element for an effective compliance program which helps to drive compliance and behavior.
Sheryl Vacca, CHC West Coast Practice Leader Life Sciences and Health Care Regulatory Deloitte & Touche LLP (714) 436-7710 svacca@deloitte.com Ms. Vacca is the West coast Leader for Deloitte & Touche s National Life Sciences and Health Care Regulatory practice. She has assisted several life science companies develop their compliance programs, investigations, perform risk assessments and develop auditing and monitoring plans for the compliance department. She has significant experience consulting with life sciences and health care organizations on compliance issues including self disclosure, writing plans of correction, implementing systems in response to plans of correction, implementing QA systems and general regulatory compliance.