Off-Label Promotions and Prescriptions Pursued Under the False Claims Act Shelley R. Slade Vogel, Slade & Goldstein, LLP September 2007 1

Pharmaceutical companies often market drugs, and physicians often prescribe drugs for uses other than those specified on the product labels approved by the Food & Drug Administration (FDA). This so-called “off-label” distribution of medications can expose drug manufacturers and doctors to liability under federal and state false claims laws. This is because government health programs ordinarily do not cover “off-label” uses of medications except for those occasional cases in which an off-label use has been conclusively determined to be both safe and effective.

An individual with inside knowledge of illegal, off-label promotional activity can earn a reward for blowing the whistle on this misconduct. The federal False Claims Act as well as many of the state false claims statutes permits a private individual with knowledge of such fraud to sue in the name of the government payers and receive a share of any resulting financial recovery.

After providing background on the facts and law that give rise to liability in such circumstances, this article discusses the federal government’s willingness to aggressively use the federal False Claims Act to recover taxpayer funds misspent on drugs prescribed off-label, and offers suggestions on assessing potential legal action.

I. THE STATUTORY REMEDY

The federal False Claims Act imposes triple damage liability on any person who, among other things, knowingly causes the submission of false claims to the federal government for payment or approval.[2] Pursuant to a so-called “qui tam provision³,” this law permits a private individual to sue on behalf of the United States to recover lost taxpayer funds, and, if he or she meets certain criteria, receive 15 to 30% of any recovery to the government, plus attorneys fees, costs and expenses.⁴ As of this writing, twenty states have enacted analogous legislation governing false claims for state funds^5.

If liability is to turn on the “causation” of false claims, it is useful to think of these laws as requiring a plaintiff to establish the following elements:

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