Off-Label Promotion and Pharmaceutical False Claims: The Missing Reimbursement Link

Off-label promotion can support a False Claims Act case when a drug company’s conduct knowingly causes false claims for government payment. Taxpayers bear the cost when the campaign gets Medicare or Medicaid to pay for prescriptions those programs do not cover. The connection runs from the message to the prescription to the bill. A sales representative may know exactly which patients the company targeted. A medical affairs employee may know what the study actually showed. The reimbursement question brings those accounts together: what made the resulting prescription eligible for public money, and what did the company do to obtain that payment?

What Is Considered Off-Label Promotion?

Off-label promotion means a manufacturer markets an approved drug for a use outside its FDA-approved labeling. That comparison reaches the indication, the patient population, the dose and the treatment regimen. It asks what disease the drug treats, who receives it, how much they receive and how it is used.

The manufacturer chooses the message it gives physicians and the audience it targets. The FDA approval, the company’s promotional claim and the payer’s coverage decision each concern a different part of that transaction.

The population can be the decisive difference even when the disease stays the same. In the Novartis TOBI settlement, the government alleged promotion both for diseases other than cystic fibrosis and for cystic fibrosis patients outside the approved indication’s parameters.

The regimen can change the payment question, too. The government’s civil allegations against Scios concerned scheduled, serial outpatient Natrecor infusions for less severe heart failure. According to the Department of Justice’s account, the company encouraged doctors and hospitals to establish outpatient infusion clinics and supplied resources for billing Medicare. The alleged sales effort reached the place of treatment and the machinery for getting paid.

How Off-Label Promotion Reaches a False Claims Act Claim

An off-label promotion False Claims Act case needs a connection between the company’s conduct and a false claim submitted for payment. A pharmacy, physician or facility may submit the bill. The manufacturer can be responsible for causing that submission, including through false statements that matter to whether the government pays.

That is why the coverage rule belongs beside the sales message. We examine the promoted use, the public program, the information presented for reimbursement and the company’s role in getting the claim submitted. The same marketing campaign may reach prescribers treating patients under different benefits and coverage rules.

Compendia Can Supply the Reimbursement Link

Medicaid’s definition of a medically accepted indication includes an FDA-approved use or a use supported by a citation included, or approved for inclusion, in specified drug compendia. These reference works include American Hospital Formulary Service Drug Information and DRUGDEX. Their assessment of a use can therefore matter directly to eligibility for government coverage.

This makes the route into the reference book part of the money trail. Who supplied the study? What did it actually establish? What use did the resulting entry support? A medical affairs employee who worked on the publication may understand something that the person processing the claim never saw.

Amgen illustrates the connection. In its civil allegations concerning Aranesp, the government contended that Amgen used journal articles insufficient to support the safety and efficacy of the promoted uses and improperly obtained compendia listings to establish eligibility for federal healthcare coverage. A whistleblower’s complaint described the alleged publication strategy:

The same paragraph alleged that tainted studies supported listings in Thomson-owned compendia and that the government used those listings for reimbursement decisions. The allegation follows the information through each stage: a study, an article, a reference entry and a payment decision. The publication had a job to do beyond persuading a doctor.

The Benefit and the Patient’s Use Matter

Medicare Part B covers specified categories of drugs, including drugs not usually self-administered that are furnished as part of a physician’s service. When Part B payment is available for a drug as prescribed and administered to a particular patient, that prescription falls outside Part D. A plan’s formulary can add prior authorization or step-therapy requirements.

An insider’s account becomes more useful when it identifies the particular use behind the payment. A 2018 Managed Care article, Indication-Specific Drug Pricing–Simple in Theory, Complex in Reality, described an information gap: the indication may appear in the patient’s electronic medical record without being captured at the pharmacy point of sale.

That observation explains why a dispensing record and a clinical record can answer different questions. We connect what was prescribed and paid for to the patient’s use, then compare it with the coverage support the company promoted. The product name supplies only part of that comparison.

What Sales and Medical Affairs Employees May See

Sales instructions, bonus plans, study presentations and medical-information requests can show how a company turned a promoted use into a sales objective. The useful details identify the message, the audience, the incentive and the route toward reimbursement.

The Bonus Plan Named the Uses

The whistleblower’s complaint against ISTA Pharmaceuticals alleged that the company divided off-label Xibrom uses into sales categories called buckets. It reproduced this instruction:

The complaint also alleged that representatives received training on how to defend a study that lacked statistical significance. It described instructions to print preoperative sheets to encourage prescriptions and to place samples in surgical kits. Each item served a different part of the sales effort: answering an objection, making the prescription easier and putting the product beside the procedure.

The payment allegation was specific. The whistleblower alleged that the promoted uses lacked recognition as medically accepted indications and were ineligible for Medicare and Medicaid coverage. That allegation supplied the connection between the internal sales categories and the public bill.

A Question the Sales Team Had Planned

Medical-information channels can reveal how the company arranged the conversation. A separate whistleblower complaint against Amgen alleged that representatives used an unbranded disease-state piece to prompt an unsolicited question about Aranesp, then presented data promoting the off-label use. It also alleged that management expected representatives to present materials at almost every physician meeting in response to a routine greeting.

The alleged sequence matters. The company prepared the opening, anticipated the question and supplied the answer. For an employee in medical affairs, the detail piece, request and response may show how a sales objective traveled through a channel presented as scientific exchange.

The Payer Was Also a Sales Target

Promotional claims can reach the people who control access to a drug. Shire agreed to a $56.5 million civil settlement announced in September 2014 over allegations that its drug marketing and efficacy claims affected prescriptions and government reimbursement. The government alleged that company representatives made false and misleading statements about Vyvanse’s efficacy and potential for abuse to state Medicaid formulary committees as well as physicians.

A formulary committee influences which prescriptions the program will cover. The presentation made to that committee can sit directly between a sales strategy and patient access.

Civil Settlements Show the Payment Patterns

Civil off-label promotion settlements show how the sales message can reach government spending through different channels. In its April 2010 AstraZeneca announcement, the Department of Justice announced a $520 million civil settlement over allegations that AstraZeneca caused noncovered Seroquel claims through promotion of unapproved uses and paid physicians recruited as authors of company-prepared articles.

That publication channel has a parallel in the Amgen complaint. A scientific article can help carry a company’s message beyond the sales call, whether through a physician’s apparent endorsement or a compendium used in coverage decisions. The insider question is who shaped the evidence and how the company used it to obtain prescriptions and payment.

Celgene’s July 2017 civil settlement was $280 million and resolved allegations involving promotion of Thalomid and Revlimid for unapproved uses and resulting false claims.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. A sales or medical affairs employee may hold the internal explanation for why the company pursued those prescriptions and how it supported payment for them.

Why a Company Might Pursue the Use Without Seeking Approval

An additional approval can affect the competition a manufacturer expects to face. In the Neurontin case, the Justice Department alleged that Warner-Lambert chose not to seek approval for new uses because it feared that generic competitors could use those indications to compete with a planned successor drug.

That is a business reason an employee might recognize. According to that account, the company wanted the market for the additional uses while protecting its plans for the next product. The alleged campaign used medical liaisons, sales pitches, purported consulting and medical education as channels for Neurontin promotion. The commercial plan and the scientific presentation belonged in the same inquiry.

The government also alleged that Warner-Lambert promoted Neurontin as a sole treatment for epileptic seizures after the FDA had rejected that use. It also promoted the drug for bipolar disease even though a study showed that a placebo worked as well or better. The gap between the study result and the sales message is something an employee can recognize.

Off-Label Enforcement and the Payment Evidence

Payments to prescribers can supply another connection between a promotional campaign and a false claim. Public Citizen’s 2018 study, Twenty-Seven Years of Pharmaceutical Industry Criminal and Civil Penalties: 1991 Through 2017, identified kickbacks, including foreign bribery, as a continuing focus of federal settlements.

A prescribing scorecard, a falsified attendance sheet or an expense report with a name omitted can reveal the purpose and execution of the arrangement. Federal law connects health care claims resulting from prohibited kickbacks to the False Claims Act. The financial records can supply a part of the case that the slide presentation leaves out.

When You Know the Message Behind the Prescription

If you know how a sales target became a scientific claim or a reimbursement strategy, speak with our whistleblower experts about the campaign you worked on. We work with you to connect the internal decisions to government payment and build your strongest pharmaceutical whistleblower case. We bring in pharmaceutical fraud whistleblower lawyers who understand promotion and reimbursement, and stay beside you through the process.