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Feds seek to punish drug companies for off-label marketing

BOSTON --U.S. District Court Judge Patti Saris had seen cases like this before, and she was fed up.

Another pharmaceutical company was in her court, waiting to be slapped with a multi-million-dollar fine for marketing its drugs for uses that had not been approved by the federal Food & Drug Administration.

"You can't thumb your nose at the FDA," Saris said. She sentenced Schering Sales Corp. and its parent company, Schering-Plough Corp. earlier this year to pay $435 million to settle allegations it lied to the government about drug prices and illegally promoted the drugs Temodar and Intron A for the treatment of cancers for which they were not approved.

Although doctors are free to prescribe drugs for uses that have not been approved by the FDA, pharmaceutical companies are prohibited by law from marketing drugs for so-called "off-label" uses.

Some industry representatives say the law that prohibits illegal marketing and the affiliated FDA regulations are open to different interpretations and are selectively enforced.

Over the last decade, federal prosecutors across the country have aggressively targeted drug companies, including Pfizer Inc., AstraZeneca Pharmaceuticals, and Eli Lilly & Co., for illegal marketing activities. Just this week, Purdue Pharma, the maker of the painkiller OxyContin, agreed to pay $19.5 million to 26 states to settle off-label marketing allegations.

Since 1997, when the Justice Department began receiving funding earmarked for fighting health care fraud, the federal government has collected $11.87 billion in fines for various violations and returned the money to Medicare, Medicaid and other health care programs.

Critics of off-label marketing say drug makers continue to do it for one simple reason: profits. Even when drug makers are forced to pay huge fines, the amounts are small when compared with the money that can be made by promoting drugs for off-label uses.

In 2004, Pfizer paid $430 million in fines to settle allegations it marketed the epilepsy drug Neurontin for pain and psychiatric illnesses. David Franklin, a medical liaison who became a whistleblower against the company, said that even after the settlement -- one of the largest ever in a health care fraud case -- doctors told him that other pharmaceutical companies were still actively promoting their drugs for off-label uses.

"The $430 million penalty was widely referred to as a slap on the wrist," Franklin said.

Sales of Neurontin reached nearly $2.7 billion in 2003, a year before the fines, which settled charges that Warner-Lambert -- a company Pfizer bought in 2000 -- flew doctors to lavish resorts and paid them big speaking fees to hype Neurontin.

Many of the cases begin with a lawsuit filed by a whistleblower like Franklin. Under the federal False Claims Act, private citizens can sue on behalf of the government and receive a portion of fines in cases where companies defraud the government, including cases in which Medicare and Medicaid are charged for these off-label prescriptions. Franklin received a total of $26.6 million in the Neurontin case.

Some of the biggest pharmaceutical companies -- including Schering, Serono Laboratories and Pfizer -- have been prosecuted in Boston, where the U.S. Attorney's Office has one of the most aggressive health care fraud units in the country. Boston gained a reputation after a record $875 million fine was handed out against TAP Pharmaceutical Products in 2001 to settle allegations it inflated prices and bribed doctors to prescribe its prostate cancer drug Lupron.

Thomas Abrams, director of FDA's Division of Drug Marketing, Advertising and Communications, said it is dangerous for pharmaceutical companies to promote non-approved uses for their drugs.

Doctors will use their judgment to decide what's best for their patients, including sometimes off-label prescriptions, but when drug companies promote those uses, it circumvents the FDA approval process and could lead to doctors prescribing drugs for uses that are not safe or effective.

The promotion is done in various ways -- by drug company representatives during visits to doctors' offices, at medical conferences and seminars and by funding research that is featured in medical journals.

Pharmaceutical companies say they have put strict programs in place over the last few years to train their employees to comply with the FDA regulations.

Last month, Pfizer agreed to pay fines totaling $34.7 million for two subsidiaries accused of offering a subsidiary of a pharmacy benefit manager a kickback to recommend company drugs and for promoting the human growth hormone product Genotropin for non-approved uses. In both the Neurontin and Genotropin cases, the illegal marketing activity took place before the units were acquired by Pfizer.

"Pfizer's long-standing policy is that we don't promote our products for off-label uses -- period," said spokesman Bryant Haskins.

Prosecutors say the law is clear: pharmaceutical companies cannot promote off-label uses for their drugs in any way, either in advertising to consumers, brochures handed out to doctors and even during discussions between their sales representatives and doctors. One exception is if a drug company receives an unsolicited letter from a doctor asking about a drug, the company is allowed to respond with a letter that includes a description of off-label uses.

"A lot of drug companies are unhappy about this because it reduces sales," said Dr. Jerry Avorn, author of the book "Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs" and a professor at Harvard Medical School.

"Some of them are unhappy because they really feel they ought to be able to say what they want," he said, "and let the doctor beware."

Brien O'Connor, a Boston attorney who has represented Schering and other pharmaceutical companies in off-label marketing cases, said there is a lot of disagreement between drug companies and the government about what constitutes promotional activity.

"What manufacturers are crying out for... is how can their medical liaisons or medical affairs groups interact with physicians?" O'Connor said. "That's a big area of concern."