Novartis - $72.5 Million

On May 4, 2010, the DOJ announced another off-label drug settlement, this one with Novartis. The DOJ announced that two units of drugmaker Novartis will pay a total of $72.5 million to resolve allegations that the company caused false claims to be submitted to federal health care programs for an antibiotic drug, TOBI (an inhaled antibiotic). The case was filed by former employees of a Novartis predecessor, Chiron Corp., under the whistleblower provisions of the FCA. According to DOJ, the Food and Drug Administration (FDA) approved TOBI, which is an inhaled antibiotic, for treatment of certain cystic fibrosis patients. Novartis is accused of marketing TOBI for unapproved uses, such as diseases other than cystic fibrosis, and for cystic fibrosis patients who did not meet what DOJ called the parameters of the FDA-approved indication and for which the drug was not a medically accepted use.

AstraZeneca - $520 Million

On April 27, 2010, the DOJ announced that AstraZeneca and AstraZeneca Pharmaceuticals LP agreed to settle a False Claims suit regarding off label marketing of their anti-psychotic drug Seroquel for $520 million. The government alleged that AstraZeneca illegally marketed the drug to doctors for uses that were not approved by the FDA.

Seroquel was approved for the treatment of psychotic disorders and permitted for short term treatment of schizophrenia, manic episodes, bipolar disorders and bipolar depression. However, AstraZeneca promoted Seroquel for the treatment of aggression, Alzheimer’s disease, anger management, anxiety, attention deficit hyperactivity disorder, dementia, depression and post-traumatic stress disorder, all of which were off label uses never approved by the FDA for safe, effective treatment. AstraZeneca marketed the illegal uses of the drug mainly to physicians through speakers at company-sponsored continuing medical education programs and through doctors recruited to author articles discussing the drug’s application.

Although doctors are permitted to prescribe any approved drug for off-label uses, it is illegal for drug makers to promote medications for any purpose not specifically approved by the FDA. In addition, the government alleged that the recruitment and payment of doctors to author articles and promote Seroquel for the treatment of unauthorized ailments violated the Anti-Kickback Statute.

In addition to the huge settlement, AstraZeneca was required to enter into a Corporate Integrity Agreement (CIA) with the OIG in exchange for a release of the OIG’s permissive exclusion authority. The CIA requires, among other things, that a board of directors committee annually review the company’s compliance program and certify its effectiveness; that certain managers annually certify that their departments or functional areas are compliant; that AstraZeneca send doctors a letter notifying them about the settlement; and that the company post on its website information about payments to doctors, such as honoraria, travel or lodging.

This case was launched by a whistleblower, a former drug rep for both AstraZeneca and Eli Lilly who previously had filed a whistleblower action against Eli Lilly for off-label marketing of its antipsychotic drug, Zyprexa. In this settlement, the whistleblower’s share is $45 million.

These are not the first, and probably will not be the last of these types of FCA settlements as there is big money in off-label use of drugs. We will likely continue to see these types of settlements until the settlement payouts exceed the money to be made by these big pharmaceutical companies for off-label sales of their drugs. Physicians should be wary of offers from pharmaceutical companies that encourage or provide incentives to them to prescribe approved drugs for off-label purposes, as we would expect to soon see a related wave of settlements with the physicians who accepted the kickbacks in exchange for prescribing TOBI and Seroquel.