This year, both the Food and Drug Administration (FDA) and Department of Justice have repeatedly signaled to the pharmaceutical and medical device industries that they should expect an increase in the criminal prosecution of individuals for alleged violations of the food and drug laws, with the stated goals of increasing deterrence and greater compliance.

Obstruction Alleged Relating to Off-label Promotion of a Medication. Making good on that promise, the two agencies announced on November 9, 2010 the indictment of Lauren C. Stevens, a former Vice President and Associate General Counsel of a "major" pharmaceutical company (which was not identified in the charges).i The indictment charges Ms. Stevens with obstructing an official proceeding, concealing and falsifying documents to influence a federal agency, and making false statements to the FDA. The alleged obstruction pertains to an FDA inquiry between late 2002 and early 2003 into the promotion of a depression medication for unapproved ("off-label") uses, including weight loss.

According to the indictment, Ms. Stevens was the attorney in charge of responding to the FDA's inquiry, and "led a team of lawyers and paralegals" who gathered documents and information. In a telephone call with FDA representatives, confirmed in a follow-up letter, Ms. Stevens promised to provide the materials presented at promotional programs sponsored by the company. Ms. Stevens further agreed to seek these materials from health care professionals who spoke on the company's behalf in 2001 and 2002 regarding the medication.

The indictment alleges Ms. Stevens caused the company to withhold relevant and allegedly incriminating documents gathered as a result of the internal review, including 40 sets of slides used at continuing medical education or other programs sponsored by the pharmaceutical company, many of which, according to the indictment, improperly contained information about unapproved uses of the drug at issue. The internal review also identified two physicians ("Dr. P" and "Dr. H") who each had spoken at approximately 500 such events. The indictment further alleges that Ms. Stevens represented in a letter to the FDA that the company had completed the production of the documents requested by the FDA, although it allegedly had not produced any of the slide sets, including those from "Dr. P" and "Dr. H."

Notably, the indictment alleges that, "as [the pharmaceutical company] prepared to finish its response to the FDA inquiry," Ms. Stevens specifically asked for a memo from other lawyers on her team summarizing the "pros and cons" of producing these slide sets to the FDA. Among the "cons" was the following:

"Provides incriminating evidence about potential off-label promotion of [the drug] that may be used against [the pharmaceutical company] in this or in a future investigation."

Nonetheless, Ms. Stevens allegedly sent a "final letter" in May 2003 that "falsely" stated the company had completed its production of information and documents in response to the inquiry.

Several months later, in September 2003, according to the indictment, Ms. Stevens learned that a sales representative "had blown the whistle" by providing the FDA with several of the slides the company had withheld from the FDA. In November 2003, Ms. Stevens allegedly sent a letter to the FDA, claiming there were only "isolated deficiencies" in the company's promotional programs, and that the company had not encouraged use of the drug to treat obesity. Moreover, according to the indictment, Ms. Stevens selectively enclosed with this letter only the few slide sets she knew the FDA had received from the whistleblower. Further, the government press release announcing the charges notes that the pharmaceutical company for whom Ms. Stevens worked has not been charged with a crime.

Alleged Promotion of Unapproved Combination of Bone Filler and Bone Growth Protein. Another recent case where the Justice Department has charged individuals allegedly engaged in off-label promotion involves employees of Stryker Corporation. Prosecutors charged last year that Stryker, its former President and several sales managers conspired to market and sell a combination of a bone void-filler product, along with a protein product that promotes bone growth, to surgeons and medical staff, despite the fact that the FDA had not approved the combination of the two products. The indictment alleges that Stryker sales managers allegedly instructed the company's sales force on how to market the combination. The case is currently in the pre-trial phase.

Take Aways: There are a host of notable issues raised by these prosecutions, including:

A Clear Message -- Holding Individuals Accountable: The FDA and Justice Department aim to send a clear message to pharmaceutical and medical device companies about enforcement and compliance by charging executives and other employees, as in the Stryker matter. Now, with this latest indictment for obstructing an FDA inquiry, the Justice Department has sought to raise the stakes, charging an in-house lawyer who acted in the "gatekeeper" function - something the Department did repeatedly several years ago during its investigation of technology companies allegedly engaged in stock options backdating.

Using All Available Tools. No substantive charge for off-label marketing is included in the indictment announced this week; all of the charges relate to obstructing and impeding an FDA inquiry. As with other regulatory enforcement efforts, the government has now demonstrated it will use all available tools when enforcing the food and drug laws - including prosecuting the "cover up" as well as the crime - and is willing reach back in time to do so, here to events allegedly occurring in 2002.

Reliance on Whistleblowers. During the time period at issue, 2001 through 2002, it was not uncommon for pharmaceutical companies to fund continuing medical education presentations out of sales and marketing budgets. As with many other off-label investigations, the inquiry into the pharmaceutical company was apparently catalyzed by a sales representative-turned whistleblower, re-emphasizing the importance of establishing and maintaining a robust compliance program -- one that employees feel is accessible to them. Expanding avenues for qui tam lawsuits under recent Congressional legislation make clear the risks of not implementing an effective compliance program