Another Big Pharma Payout – But Is It Enough?

Another Big Pharma Payout – But Is It Enough?

Following big settlements against Eli Lilly and Pfizer for unlawful, off-label marketing of Zyprexa and Geodon respectively, the U.S. Department of Justice this week announced a settlement with AstraZeneca with regard to its atypical antipsychotic, Seroquel. As part of the settlement, the company has agreed to pay $520 million. The Wilmington, Del.-based pharmaceutical company was accused of promoting the drug’s use for multiple illnesses never approved by the FDA.

The DOJ said that by promoting Seroquel for off-label uses, the company caused false payment claims to be submitted to various federal programs including Medicaid and Medicare. The allegations were originally raised in a lawsuit under the whistleblower provisions of the False Claims Act. As part of the settlement, the federal government will receive $302 million and the states and the District of Columbia will receive $218 million.

While the government should be commended for this important settlement, the amount being paid by Astra Zeneca must be put in perspective. Seroquel originally went to market in 1997 and its sales have since eclipsed over $4 Billion Dollars per year, most of which were for non-approved or off-label uses as a direct result of AZ’s marketing misconduct. So while the amount being paid by AZ may seem like a lot, in the overall scheme of things it appears to be the cost of doing business.

We suspect that because of the incredible amount of money at issue, that companies like AZ will continue to find ways to market these expensive drugs off-label knowing that they are still making out in terms of the overall profits generated. One of the potential consequences of a government contractor such as AZ being found guilty of off-label violations is disbarrment. We suspect that until some of these Pharma giants are debarred, that unfortunately wrongful marketing tactics such as those at issue in the Seroquel case will continue.

Significant Big Pharma Payouts

Whistleblower cases in the pharmaceutical industry have resulted in significant payouts, reflecting the magnitude of the fraudulent practices exposed. Here are some of the biggest payouts involving whistleblowers and big pharma:

Johnson & Johnson – $2.2 billion: In 2013, Johnson & Johnson settled a lawsuit for $2.2 billion, making it one of the largest healthcare fraud settlements in U.S. history. The case involved allegations that the company promoted the antipsychotic drug Risperdal for off-label uses and paid kickbacks to physicians and pharmacies.

GlaxoSmithKline – $3 billion: In 2012, GlaxoSmithKline (GSK) reached a $3 billion settlement with the U.S. Department of Justice. The settlement resolved multiple allegations, including off-label promotion of drugs like Paxil and Wellbutrin, failure to disclose safety data, and paying kickbacks to healthcare professionals.

Pfizer – $2.3 billion: In 2009, Pfizer agreed to pay $2.3 billion to settle allegations related to the off-label promotion of several drugs, including Bextra, Geodon, Zyvox, and Lyrica. The case involved fraudulent marketing practices and illegal promotion for unapproved uses.

Merck – $950 million: In 2011, Merck settled a whistleblower lawsuit for $950 million. The case accused the company of engaging in off-label marketing of the painkiller Vioxx and making false claims about its cardiovascular safety.

Abbott Laboratories – $1.6 billion: In 2012, Abbott Laboratories agreed to pay $1.6 billion to settle allegations involving off-label marketing of the antiepileptic drug Depakote. The case included claims of promoting the drug for psychiatric uses without FDA approval.

These settlements highlight the significant financial repercussions faced by pharmaceutical companies when their fraudulent practices are exposed through whistleblower actions. Whistleblowers play a crucial role in uncovering misconduct and protecting the interests of public health.

What Are the Signs of Off-Label Marketing Fraud?

Detecting signs of off-label marketing fraud in pharmaceutical companies requires careful scrutiny of their promotional practices and adherence to regulatory guidelines. Here are some signs that may indicate off-label marketing fraud:

1. Promotion of unapproved uses: If a pharmaceutical company aggressively promotes a drug for uses that have not been approved by regulatory authorities, such as the FDA, it could be a sign of off-label marketing fraud. This includes marketing the drug for conditions or patient populations for which it has not received official approval.
2. Lack of scientific evidence: Off-label marketing fraud often involves promoting a drug for uses without sufficient scientific evidence to support its efficacy and safety in those indications. If a company makes bold claims about a drug’s effectiveness for unapproved uses without proper clinical studies or data, it could raise suspicions.
3. Misleading or false advertising: Misleading or false advertising can be an indication of off-label marketing fraud. If a company engages in deceptive practices, such as manipulating clinical trial results, selectively presenting data, or making unsupported claims about a drug’s benefits, it may be attempting to promote off-label uses.
4. Kickbacks or inducements: Offering financial incentives or kickbacks to healthcare professionals, such as physicians or pharmacists, for prescribing or promoting a drug for off-label uses is another red flag. Such arrangements could indicate an attempt to influence medical decisions and expand the drug’s market beyond approved indications.
5. Internal company documents or whistleblowers: Internal company documents, such as emails or memos, can provide valuable evidence of off-label marketing fraud. Whistleblowers who come forward with firsthand knowledge of fraudulent promotional practices within the company can also expose such misconduct.

It’s important to note that the presence of these signs does not automatically confirm off-label marketing fraud. Investigations, legal proceedings, and regulatory reviews are necessary to establish the veracity of allegations and hold companies accountable for their actions.