Three recent developments call on industry and health care providers to employ increased rigor in their compliance self-assessment and self-reform initiatives.

Just two weeks into 2009, three noteworthy developments have occurred with respect to industry relationships with health care professionals—a historic settlement with a pharmaceutical manufacturer, the long awaited publication of the U.S. Food and Drug Administration’s (FDA) final “Good Reprint Practices” guidance and a derisive report by the Department of Health and Human Services Office of Inspector General (OIG) addressing the FDA’s oversight of clinical investigator financial information.  These events portend a continuation in the coming year of the government’s relentless focus on the various compliance implications of such relationships and its corresponding aggressive enforcement and policy reform initiatives.

Eli Lilly and Company Enters into Unprecedented Off-Label Use and False Claims Settlement

On January 16, 2009, the U.S. Department of Justice (DOJ) announced that Eli Lilly and Company (Eli Lilly) agreed to pay $1.4 billion ($600 million criminal, $800 million civil) to settle both criminal and civil charges relating to alleged marketing and promotion of the company’s antipsychotic drug, Zyprexa, for “off-label” uses not approved by the FDA.  The DOJ alleged that Eli Lilly created marketing materials to promote off-label use of Zyprexa, trained sales representatives to promote the drug for off-label conditions and retained medical professionals to speak to doctors during peer-to-peer meetings regarding off-label uses of Zyprexa.  According to the DOJ release, the criminal fine is the largest ever imposed on an individual corporation.                           

The criminal portion of the settlement requires Eli Lilly to pay a criminal fine of $515 million, forfeit assets of $100 million and enter into a plea agreement admitting its guilt to a misdemeanor criminal charge.  Eli Lilly will also pay approximately $800 million to the federal government and several states to resolve civil allegations that by marketing Zyprexa for off-label uses, which caused the submission of false claims for payment to federal insurance programs such as Medicaid, TRICARE and the Federal Employee Health Benefits Program. 

Separately, Eli Lilly entered into a five year Corporate Integrity Agreement with the OIG, which requires the board of directors and senior executives to sign and submit to the OIG detailed compliance certifications.  The company is also required to post certain information regarding payments to physicians on its company website. 

FDA Publishes Final Guidance on Good Reprint Practices Under Off-Label Use Laws

The historic Eli Lilly settlement comes just days after the FDA published its final “Good Reprint Practices” guidance, which addresses the FDA’s principles for distribution of medical journal articles or medical reference publications that discuss off-label uses of FDA approved drugs and medical devices.  This guidance document sets forth both the types of articles and publications suitable for distribution and the appropriate manner for distribution.  Congressman Henry Waxman, Chairman of the House Energy and Commerce Committee which has jurisdiction over the FDA, voiced his objections to the FDA’s guidance  in draft form in 2007.

OIG Issues Report Criticizing FDA Oversight of Conflicts of Interest

On a related front, on January 12, 2009, the OIG issued a report  sharply criticizing the FDA’s oversight of financial conflict of interest information submitted by investigators conducting clinical trials.  Currently, federal regulations require clinical trial sponsors to collect and disclose certain financial interests of investigators that could create bias in the clinical research, such as serving as a consultant for the study sponsor or participating in the sponsor’s speakers bureau.  The OIG report found significant deficits in the FDA’s ability to determine whether sponsors have submitted all necessary financial information and that FDA action in response to disclosed financial interests was inconsistent. 

Particularly noteworthy is the fact the some of the same types of financial relationships between industry and health care professionals that gave rise to off-label use and false claims allegations in the Eli Lilly case are the basis for the government’s concern about the integrity of the clinical research process undertaken to support FDA market approval. 

Dealing with Complex Compliance Requirements in a Rigorous Enforcement and Policy Reform Environment

Enforcement authorities such as the DOJ and OIG are clearly focused on industry-provider relationships and interactions.  For example, in response to the announcement of the Eli Lilly settlement, the FDA’s Office of Criminal Investigations stated, “[t]he FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the safeguards of the drug approval process and recklessly promote drugs for uses for which they have not been proven to be safe and effective.”  What is also clear is that any one or all of a manufacturer’s interactions with health care professionals could trigger any one or more types of compliance enforcement exposure—particularly anti-kickback, false claims, off-label use, and conflicts of interest in research and clinical care.  And, finally, the price tag for reaching a settlement in the context of investigations by any one or more of the enforcement agencies may now be exponentially higher.

Both providers and industry should respond to these developments with increased rigor in their compliance self-assessment and self-reform initiatives and with a focus on a program that fully integrates and tightly manages these complex and interrelated compliance considerations.