Late last month, the Government stung Novartis with separate False Claims Act (FCA) suits only days apart. On April 23rd, the Government charged that Novartis paid kickbacks to numerous pharmacies in the form of discounts and rebates in order to induce the pharmacies to switch kidney transplant patients to Novartis’ Myfortic® from rival branded and generic drugs. And while that case presents a good blog topic in its own right, it is the Government’s second case that should really make everyone stand up and take notice. In the April 26th FCA Complaint, the Government reveals that Novartis spent $65 million on 38,000 speaker programs from 2002 through 2011 in support of sales for the hypertension drugs Lotrel® and Valturna®, and the diabetes drug Starlix® and has charged that the Company’s Speaker Programs were essentially nothing but kickbacks, providing little or no educational value. The problem is that much of what happened at Novartis has happened (and may well continue to happen) elsewhere. [Read more...]
While the NCAA “March Madness” Tournament is always the lead sports story this time of year – did anybody out there watch Florida Gulf Coast College over the weekend?! –March can also provide a madness of sorts for high-profile Supreme Court arguments. Last March, the Supreme Court set aside an unprecedented number of days for lengthy arguments over the constitutionality of President Obama’s Affordable Care Act. Although this year the mainstream media will be focusing on the arguments regarding the constitutionality of California’s Proposition 8 and the Defense of Marriage Act (regarding gay marriage), two significant cases with far-reaching consequences for the branded and generic drug industries were also argued this month. How the Supreme Court rules on so-called “pay for delay” settlements in patent infringement litigations and a First Circuit decision holding that generic drug makers can be held liable for personal injuries on a “design defect” theory, even if federal preemption would bar an identical suit on a “failure to warn” theory, should decide the course for much drug industry litigation for years to come. [Read more...]
We hoped for the best and feared the worst. As is usually the case when it comes to the Government, our fears came out on top. Last Wednesday, the Government announced that Par Pharmaceutical Companies Inc. had pleaded guilty to civil and criminal charges relating to the company’s alleged off-label marketing of Megace ES in violation of the Federal Food, Drug and Cosmetic Act (FDCA). Now that the Government has decided to “skip” the opportunity to defend its myopic view of the First Amendment before the Supreme Court, by not appealing the Second Circuit’s decision in U.S. v. Caronia, and has succeeded in beating Par into submission, is it business as usual in the world of off-label marketing? It appears that way. [Read more...]
Dear PharmaRisc Readers,
I am writing to notify you of some upcoming enhancements to the PharmaRisc blog.
As you know, the goal of this blog is to bring you news of legal, compliance, and corporate governance issues facing pharmaceutical and other life science companies. Blog articles are particularly focused on the elements of “RISC” – Reporting, Information Systems and Controls.
Starting this month, you will be receiving more frequent blog posts on RISC-related topics in the pharma and life sciences industries. In addition to commenting on recent court cases and regulatory guidelines, I will start to provide insight into practical issues that a life sciences company and its executives must address when dealing with a whistleblower, qui tam, or False Claims Act investigation. [Read more...]
It has been a busy month for legal commentators digesting the Second Circuit’s “landmark” decision in U.S. v. Caronia and its ramifications for the pharmaceutical industry. By ruling 2-1 that truthful, accurate and non-misleading off-label speech is constitutionally protected that cannot be used by the Government as the sole basis upon which to prosecute drug misbranding under 21 U.S.C. Section 331(a), the majority panel sent shock waves through the legal writing community. While there has been no shortage of articles, alerts and commentary on the subject, few have addressed the only two important questions that remain in the aftermath of Court’s decision: First, will the opinion stand? Second, if it does, can manufacturers actually begin to promote off-label? [Read more...]
It finally happened. After two long years (plus one day) since oral argument, the U.S. Court of Appeals for the Second Circuit in a 2-1 split vote decided U.S. v. Caronia, tossing Alfred Caronia’s misdemeanor conviction for engaging in off-label promotion. The former Orphan/Jazz Pharmaceuticals sales rep had argued that in promoting Orphan’s Xyrem for unapproved uses, he did not speak untruthfully, inaccurately or in a misleading manner and that his conviction under 21 U.S.C. Sections 331(a) and (a)(1), therefore, violated his right of free speech under the First Amendment. Fortunately for Caronia — and perhaps even more fortunately for pharmaceutical and medical device manufacturers, battered by billions in fines – two federal circuit judges agreed. Unfortunately, the fight is probably far from over. [Read more...]
After years of waiting, companies doing business overseas got an early holiday gift from the Feds on November 14th — the long-awaited guidance on the FCPA. Unfortunately, the 120-page document entitled A Resource Guide to the U.S. Foreign Corrupt Practices Act (issued jointly by the DOJ and SEC) is much like that beautifully wrapped large gift one often finds under a Christmas tree: as the wrapping paper is torn and the box’s contents inspected, the excitement dwindles when the recipient realizes he got the same gift last year . . . and the year before. [Read more...]
In my last post, I discussed how generic manufacturers use the practice of “skinny labeling” to get a free ride on a branded drug’s unexpired method of use patent. As I explained, when a pioneer drug has multiple indications, each of which is protected by a separate method of use patent with its own expiration date, the generic drug manufacturer can avoid having to incur the considerable expense and risk in challenging the validitiy and enforceability of the unexpired method of use patent by submitting a “section viii” statement with its ANDA. By side-stepping a Paragraph IV certification under Hatch-Waxman, the generic manufacturer not only avoids the risk of an adverse ruling and losing millions of dollars in patent infringement litigation, but ends up selling its skinny-labeled drug for the patent-protected use anyway because of mandatory and permissive “substitution” rules that require/allow generic substitution of cheaper “AB” rated generic drugs for branded drugs. While a skinny label free ride is great for the generic drug industry, the innovator drug industry is caught in the horns of a skinny label dilemma: should it continue to invest and lose billions of dollars in clinical research getting FDA approval of current off-label uses (knowing that as soon as the patents on a drug’s compound and original indication(s) expire, the drug will get skinny labeled), or forego the investment and face the possibility of investigation and prosecution for off-label promotion of those uses? [Read more...]
Let me start by apologizing for the long hiatus since my last posting in July. While the demands of law firm practice often interfere with a legal blogger’s desire to publish on a frequent and consistent basis, work commitments this past Summer were particularly unforgiving for this blogger. When I finally sat at my keyboard, I double-checked to make sure there had been no major events in the cases that I have been following for this blog, particularly the Caronia and Par cases. Regretably, we are quickly reaching the second anniversary of oral argument before the Second Circuit in Caronia and we still don’t have a decision. In the Par case, negotiations between the Government and Par Pharmaceuticals are continuing into their ninth month and I am still predicting a settlement with no discussion of Par’s First Amendment challenge. So, before moving away from the topic of off-label promotion entirely, and keeping with this blog’s commitment to deal with other “risks” facing the pharma/med device/bio-tech industries, I’d like to discuss a topic that is mostly of interest to patent lawyers, but which is instructive on the Government’s thinking on what really is and isn’t “off-label” use: generic “skinny labeling” of innovator drugs. [Read more...]
My how things change. At the beginning of this year the Government was worried that Par Pharmaceutical’s legal challenge to the constitutionality of off-label marketing might cripple its efforts to collect billions of dollars from Big Pharma through criminal and civil enforcement of the FDA’s off-label rules. Last week the Government and GlaxoSmithKline announced that the company had agreed to pay $3 billion in criminal and civil fines related in large part to off-label promotion of several GSK drugs in the largest health care fraud settlement in U.S. history. But, while the GSK settlement grabbed all the headlines, the Government continued to quietly negotiate an assuredly more modest settlement with Par, the consummation of which will undoubtedly involve a much bigger prize for the Feds than a billion dollar fine: the silencing of free speech. [Read more...]