Defining Off-Label Marketing of Prescription Drugs

1. Defining Off-Label Marketing of Prescription Drugs Conduct Likely to Trigger Government Scrutiny Antonia F. Giuliana March 31, 2011

2. Off-Label Drug Settlements 2004-2010 1Drugs with * did not involve off-label conduct. 2

3. Off-Label Drug Settlements 2004-2010 (cont’d) 1Drugs with * did not involve off-label conduct. 3

4. Off-Label Drug Settlements 2004-2010 (cont’d) 1Drugs with * did not involve off-label conduct. 4

5. Off-Label Settlements: Statistics by U.S. Attorney’s Offices 5

6. Off-Label Settlement Statistics The government settled 21 drug cases between 2004 and 2010. 95% of the government’s investigations in these cases were initiated by a qui tam complaint. Companies were required to enter into Corporate Integrity Agreements (“CIAs”) in 81% of the cases. Criminal pleas were made in 72% of the cases. felony pleas were made in 29% of cases misdemeanor pleas were made in 43% of cases 52% of the settlements were in excess of $100 million each. 6

7. Recent Government Interventions Wyeth/Rapamune (E.D. Pa. Oct. 2010) In October 2010, the DOJ intervened in a whistleblower suit accusing Wyeth of marketing Rapamune, a kidney transplant drug, for off-label uses. The relators, former sales representatives of Wyeth, allege that Wyeth targeted African Americans, a high risk patient group. The relators allege that Wyeth targeted two hospitals with mostly African-American patients – Philadelphia’s Einstein Medical Center and New York’s SUNY Downstate Medical Center. Wyeth is also accused of offering off-label studies, abstracts, and lists of studies to use when marketing Rapamune for off-label usage. 7

8. Recent Government Interventions (cont’d) Wyeth/Rapamune (E.D. Pa. Oct. 2010) The relators claim that Wyeth paid kickbacks to doctors and hospitals in the form of donations, grants, and speaker fees to prescribe Rapamune for off-label uses. The relators’ complaint does not include factual allegations after 2007. 8

9. Recent Government Interventions (cont’d) Abbott/Depakote (W. Va. Feb. 2011) In February 2011, the DOJ moved to intervene in a qui tam suit brought by three former employees accusing Abbott of marketing Depakote, an anti-seizure drug, for off-label uses such as dementia and behaviors seen in Alzheimer’s patients. The relators allege: Company gave its sales representatives materials requiring them to encourage nursing homes to use Depakote for off-label uses. Company failed to disclose that certain favorable articles about Depakote were written by doctors who were paid by the company. Company offered sales force bonuses and incentives for off-label promotion. 9

10. Recent Government Interventions (cont’d) Abbott/Depakote (W. Va. Feb. 2011) Other allegations by relators: Company disguised seminars for doctors that were actually sessions for discussion of off-label uses. Company paid doctors to prescribe Depakote off-label. Company trained its sales representatives to avoid being detected when promoting off-label uses. No allegations after 2008. 10

11. Recent Subpoenas On February 11, 2011, Cephalon announced that it received a subpoena requesting documents relating to Fentora, a drug to treat cancer pain, in connection with an investigation conducted by the U.S. Postal Service Office and the Civil Division of the U.S. Attorney’s Office for the Eastern District of Pennsylvania. On February 16, 2011, NovoNordisk announced that it received a subpoena requesting documents relating to the company’s marketing practices for its diabetes drugs Novolog, Levemir, and Victoza from the U.S. Attorney’s Office for the District of Massachusetts. 11

12. Pipeline for Off-Label Investigations & Cases In January 2011, the DOJ and HHS released the following statistics about sealed qui tam cases, including cases involving off-label marketing: As of January 4, 2011, there were 1,341 qui tam cases under investigation awaiting an intervention decision by the government. 885 (or 66%) of cases allege health care fraud. 867 (or 98%) of health care fraud cases involve Medicare or Medicaid. DOJ/HHS declined to disclose how many sealed qui tam cases involve off-label marketing allegations, but revealed generally that 180 casesallege fraud in connection with the pricing and marketing of pharmaceuticals. Many of the 180 pricing and marketing cases make allegations against multiple pharmaceutical manufacturers. 12

13. Conduct Likely to Trigger anOff-Label Investigation by the DOJ 95% of the off-label investigations that resulted in settlements from 2004 to 2010 were initiated by the filing of a qui tam complaint under the False Claims Act. 13

14. #1. Target Vulnerable Population (Children, Elderly, or Institutionalized Patients) Marketing an anti-depressant that was approved only for adult depression for treatment of children and adolescents. Promoting an atypical anti-psychotic that was approved only for adult use for pediatric use and to treat dementia-related psychosis in elderly patients. Promoting an atypical anti-psychotic drug for treatment that was approved only for adult use to treat elderly, pediatric, and adolescent patients in long term fare facilities and prisons. 14

15. #2. Target Doctors Who Do Not Normally Treat Patients for Any On-Label Use Company instructed its sales representatives to sell an anti-inflammatory drug to market the drug for pre- and post-operative pain to orthopedic surgeons, podiatrists, oral surgeons, and “anyone that used a scalpel for a living” even though the drug was not approved to treat the acute pain of surgery. Sales representatives marketed an anti-epilepsy drug by calling on psychiatrists and promoting the drug for anxiety and other psychiatric indications. Sales representatives promoted an atypical anti-psychotic drug approved only for adult use to child psychiatrists, nursing homes, and pediatric specialists. 15

16. #3. Misrepresent or Conceal Study Results Concerning Off-Label Uses Company publicized the positive results of a study of an anti-depressant drug in adolescents while failing to tell doctors about a similar study that had negative results. Company submitted both studies confidentially to FDA and FDA rejected pediatric approval for the drug based on the negative study. Negative study did not become public until the New York Times published an article about it several years later. Company promoted an anti-epilepsy drug as effective for treating bipolar disease even though a study demonstrated that a placebo worked as well or better than the drug. Company promoted a biological drug for treatment of a lung disease despite a clinical trial that failed to establish statistically significant evidence for such treatment. 16

17. #4. Promote Drug for an Off-Label Use that FDA Has Rejected Company promoted an osteoporosis drug for reducing the risk of breast cancer, even after FDA rejected the company’s proposed labeling for this use. Company promoted an anti-depressant drug as a treatment for adolescent depression after FDA denied approval for this indication. Company marketed an anti-inflammatory drug for acute pain, including the pain of surgery, even though FDA declined to approve drug for this indication because of safety concerns. Company promoted anti-epilepsy drug as effective for use as the sole drug (monotherapy) for epileptic seizures, even though FDA rejected this use. 17

18. #5. Ignore FDA Letter Instructing Company to Cease Off-Label Promotion of Drug FDA first approved the company’s narcolepsy drug to treat excessive daytime sleepiness associated with narcolepsy, then expanded the label to include excessive sleepiness associated with sleep apnea and shift work sleep disorder. From 2001 to 2006, the company promoted the drug as a non-stimulant for the treatment of sleepiness, tiredness, decreased activity, lack of energy, and fatigue, despite a 2002 letter from FDA instructing company to cease such promotion. 18

19. #6. Drug Has Serious Adverse Effects, For Which “Black Box” Warning May Have Been Issued FDA mandated that an atypical anti-psychotic drug carry a “black box” warning concerning its use in the treatment of dementia-related psychosis. The company allegedly created a specialized long term care sales force that called almost exclusively on nursing homes, where dementia-related psychosis is far more prevalent than on-label uses for schizophrenia or bipolar disorder. Company allegedly knew that significant weight gain and obesity were adverse side effects of its atypical anti-psychotic drug and that weight gain and obesity were factors in causing hyperglycemia and diabetes. Despite written caution from FDA, the company continued to promote those adverse events as therapeutic benefits, particularly in the elderly. 19

20. #6. Drug Has Serious Adverse Effects, For Which “Black Box” Warning May Have Been Issued (cont’d) FDA approved a fentanyl product, a strong and highly addictive narcotic manufactured as a lollipop, for use only in opiod-tolerant cancer patients. Company allegedly promoted the drug for non-cancer patients to use for such maladies as migraine headaches, sickle-cell pain crises, and injuries. Company also allegedly promoted the drug for use in patients who were not yet opiod-tolerant, and for whom the drug could have life-threatening results. Company marketed two anti-depressant drugs for use in children even after FDA issued “black box” warning that the drugs could cause suicidal thinking in children. 20

21. #7. Drug Is Later Withdrawn from Market Due to Serious Adverse Effects FDA approved anti-epilepsy drug for treatment of partial seizures. The company allegedly promoted the drug as a remedy for anxiety, insomnia, and pain. Following reports of seizures in patients taking the drug who did not have epilepsy, FDA required the company to send a warning letter to doctors advising the on the connection between off-label use and the risk of seizures. The company then ceased promotion of the drug. Company’s anti-inflammatory drug was withdrawn from the market after 3 ½ years at FDA’s request due to cardiovascular risk issues. 21

22. #8. Off-Label Promotion Accompanied by Kickbacks Company allegedly paid doctors to prescribe anti-depressant drugs. The remuneration included “cash payments disguised as grants or consulting fees, expensive meals and lavish entertainment,” including tickets to St. Louis Cardinal and Red Sox games, a $1,000 gift certificate to a gourmet French restaurant, Broadway theater tickets, and a deep sea fishing trip for a doctor and his family. Company allegedly used “sham” consulting agreements to pay doctors between $500 and $1000 to attend dinners and conferences where off-label uses of its drug were discussed. These meetings were held at expensive resorts and restaurants. Doctors who wrote large numbers of prescriptions for off-label uses were asked to speak at various events for additional financial bonuses. 22

23. #8. Off-Label Promotion Accompanied by Kickbacks (cont’d) Company allegedly offered and paid doctors, other medical professionals, physician groups, and managed care organizations money, free travel, grants, honoraria, and other valuable goods and services to get them to prescribe certain drugs. Two doctors proposed they would endorse the use of the company’s products in exchange for a series of payments. In 4 ½ years, one doctor wrote 4,130 prescriptions for the company’s products. Company allegedly offered to make excess payments of several million dollars on a distribution contract to a subsidiary of a pharmacy benefit manager, in the expectation of obtaining improved formulary positioning and improved formulary ancillary benefits from that pharmacy benefit manager for the company’s drug products. 23

24. #9. Use of CMEs and Similar Programs to Influence Prescribing Behaviors Company allegedly used advisory boards, consultant meetings, and other forums to promote drug for unapproved uses and dosages. Company used these meetings to invite doctors to serve as “consultants,” but the goal was to develop them to be “advocates” on behalf of the company. An “advocate,” as one company slide set explained, provides a solid and positive product message, rather than just presenting “balanced information, not advocating one product over the other.” The slide set demonstrated with sports images how the doctors were to be developed into advocates who could rise from the “Farm League” to ultimately be on the company’s “All Star Team.” 24

25. #9. Use of CMEs and Similar Programs to Influence Prescribing Behaviors (con’t) Company allegedly sponsored “independent medical education” events on off-label uses of a drug with extensive input from the company regarding topics, speakers, content, and participants. Company allegedly misled the medical community beforehand about the content, as well as the lack of independence from the company’s influence, of many of these educational events. In at least one instance, when unfavorable remarks were proposed by a speaker, the company offset the negative impact by “planting” people in the audience to ask questions highlighting the benefits of the drug. 25

26. #9. Use of CMEs and Similar Programs to Influence Prescribing Behaviors (con’t) Company allegedly funded continuing medical education programs, through millions of dollars in grants, to promote off-label uses of its drugs. Company allegedly retained medical professionals to speak to doctors during peer-to-peer sessions about off-label uses. Company allegedly used “medical liaisons” who represented themselves, often falsely, as scientific experts on a particular disease, to promote off-label uses of a drug. Doctors were paid to attend “consultants meetings” in which doctors received a fee for attending expensive dinners or conferences during which presentations about off-label uses were made. These events included lavish weekends and trips to Florida, the 1996 Atlanta Olympics, and Hawaii. There was allegedly little or no consulting provided by the doctors. 26

27. #9. Use of CMEs and Similar Programs to Influence Prescribing Behaviors (con’t) Company allegedly directed physician workshops and dinners focused on off-label uses, paid doctors to attend “advisory boards” promoting off-label uses, and created an “independent” online education organization to stimulate increased off-label use. Company allegedly made a series of payments to two doctors in the form of a “sponsorship” of continuing medical education classes conducted by the doctors. Company allegedly promoted an anti-epilepsy drug for off-label psychiatric uses through its “Doctor-for-a-Day” program. Using this program, the company hired outside doctors to join sales representatives in their visits to the offices of health care providers and to speak at meetings and dinners about prescribing the drug for unapproved uses and doses. 27

28. #9. Use of CMEs and Similar Programs to Influence Prescribing Behaviors (con’t) Company allegedly organized a “market research summit” during which off-label uses for an osteoporosis drug were discussed. Company also organized “consultant meetings” for doctors who prescribed the drug during which unapproved uses were discussed. Company allegedly engaged doctors to give promotional speaker programs on off-label uses and to conduct studies on such use. 28

29. #10. Conduct Demonstrating Intent to Engage in Unlawful Off-Label Promotion Sales force created “sham physician requests” from physicians for medical information in order to send unsolicited information to physicians about unapproved uses of drugs. Sales force promoted, drafted, and distributed proposed physician standing orders and hospital wide protocols and pain pathways that called for unapproved uses of drugs. Sales representatives were trained to prompt or bait questions by doctors in order to promote drug for unapproved uses. 29

30. #11. Top Level Management Involved in Off-Label Promotion Strategy Management allegedly created marketing materials to promote a drug for off-label uses, trained its sales force to “disregard the law,” and directed its sales personnel to promote the drug for off-label uses. Management specifically trained the sales force on how to respond to doctors’ concerns about off-label uses of the drug and how to continue to promote the drug for off-label conditions. Company’s marketing team positioned the drug for unapproved uses and commissioned market research to test its sales materials. Strategic marketing plans and promotion material generated by management show company’s intent to expand the market by promoting drug for unapproved uses. 30

31. #12. Problematic Promotional Activities at Company’s National Sales Meeting Promotional activities at a company’s national sales meetings are of particular interest to the government when conducting off-label investigations (and other investigations concerning the marketing and pricing of drugs). If problematic marketing activities occur at a company’s national sales meeting, the government may argue that such problematic activities were not isolated events, but rather were widespread activities that were part of the company’s national marketing plan. 31

32. #12. Problematic Promotional Activities at Company’s National Sales Meeting (cont’d) Example Drug X was officially launched at a national sales meeting for sales representatives in 2002. During this meeting, the sales force was given a vivid message of how to promote Drug X for the “power” position. Sales representatives were inundated with displays of music, light shows, acrobats, and dancers. The marketing managers led the entire audience in thrusting their fists into the air (the marketing symbol of Drug X) and pounding them against their upraised hands in unison to symbolize the power of Drug X and to “Power Up” the sales force. Ultimately, simulated large steel doors crash down on the stage, and Drug X’s fist symbol crashed through the doors. According to the government, the events from the launch demonstrate the sales frenzy that accompanied the launch of Drug X as the company strove to make the drug reach blockbuster status. 32

33. #13. Ghostwriting Articles About Off-Label Uses Company allegedly initiated, funded, and sometimes drafted or paid vendors to draft articles about its drug for unapproved uses without appropriately disclosing the company’s role. Company allegedly recruited doctors to serve as authors of articles that were ghostwritten by medical literature companies and about studies the doctors in question did not conduct. Company allegedly uses these studies and articles as the basis for promotional messages about unapproved uses of the drug. 33

34. #14. Teach Doctors How to Get Reimbursed for Off-Label Use Company allegedly doubled the size of its reimbursement team to assist doctors in obtaining payment for off-label uses and: Held workshops to teach doctors and their office staff how to bill for off-label uses; Conducted detailed audits of doctors’ billing records to demonstrate how they could make money by prescribing the drug; and Operated a Reimbursement Hotline which provided a wide array of free on-demand services to doctors for off-label uses. 34

35. #15. Exploit On-Label Indication to Grow Off-Label Sales Company allegedly exploited its on-label cervical dystonia (CD) indication to grow off-label pain and headache (HA) sales. Company allegedly developed the “CD/HA Initiative” as a “rescue strategy” in the event of negative results from its clinical trials to ensure continued expansion into the pain and headache markets. Company allegedly claimed that cervical dystonia was “underdiagnosed” and that doctors could diagnose cervical dystonia based on headache and pain symptoms, even when the doctor “doesn’t see any cervical dystonia.” 35

36. #16. Sales Force Quotas Cannot Be Met Without Off-Label Use Company structured its sales quotas and bonuses in such a way that sales representatives could reach their sales goals only if they promoted and sold the drugs for off-label uses. Sales representatives were given sales quotas for the amount of a drug that had to be purchased in their districts, without regard to whether those sales were on or off-label. Because sales representatives were judged on a competitive basis, they would have been negatively affected if they did not capture off-label sales but their colleagues did. Sales numbers substantially above quota resulted in significant bonuses annually. 36

37. #17. Majority of Sales Come From Off-Label Use 57% of sales for an anti-inflammatory drug were off-label. The “vast majority” of sales for a biological drug were attributable to off-label prescriptions. 78% of sales for an anti-epilepsy drug were off-label. 37

38. #18. Drug Achieves Blockbuster Status During Period of Alleged Off-Label Marketing In the early 2000s, the company was one of the drug industry’s biggest success stories. It was a small specialty pharmaceutical company that licensed an anti-depressant drug and turned it into a blockbuster drug. In the fiscal year ending March 2002, the drug’s sales were greater than $1 billion and accounted for 69% of the company’s total revenue. The drug lost patent protection in 2004 causing much of its sales to vanish. The company then introduced a new improved anti-depressant drug. The new drug was the company’s #1 product with sales of $2.3 billion in 2008. 38

39. Contact Antonia F. GiulianaPARTNERLitigation Phone: (212) 808-7941agiuliana@kelleydrye.com