Transcript Risk Areas and Red Flags -

7th Annual National Pharmaceutical Congress
November 9, 2006
Off-Label Promotion: Risks, Controls
and Assessment
John T. Bentivoglio
Co-Leader
FDA/Healthcare Group
[email protected]
202.626.5591
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
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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.
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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.
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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. 3729.
• 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.
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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. 96-11651-PBS
May 23, 2003
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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
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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.
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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
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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
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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
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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)
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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
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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, emails, 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
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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
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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
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Potential Controls -- CME, IME Funding
• Establish clear rules/procedures to ensure independence of
CME/IME programs
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–
–
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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)
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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:
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Ride alongs
Distribution of off-label information
Responding to unsolicited requests
Review of funding requests (IME, Phase IV)
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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
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Hotline calls
Exit interviews or HR proceedings
Warning Letters
Competitor complaints
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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 emails is
unlikely to give accurate picture of current activities
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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.
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