Kusserow’s Corner: Wyeth Pharmaceuticals to Pay Nearly $491 Million for Unapproved Off-Label Uses of a Drug

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In the latest in a series of cases brought against pharmaceutical manufacturers for unallowable “off label” uses of their products, the Department of Justice (DOJ) announced on July 30, 2013 a new settlement.  Wyeth Pharmaceuticals, Inc. (acquired by Pfizer, Inc. in 2009) agreed to pay $490.9 million to resolve its criminal and civil liability arising from the unlawful marketing of the prescription drug Rapamune® for uses not approved as safe and effective by the FDA. Rapamune is an “immunosuppressive” drug that prevents the body’s immune system from rejecting a transplanted organ. The case originated in two cases brought by qui tam relators (“whistleblowers”) under provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and share in any recovery.  The relators were a former Wyeth sales representative and a pharmacist.  The resolution agreement includes a criminal fine and forfeiture totaling $233.5 million, as well as an agreement to pay a criminal fine of $157.58 million and forfeit assets of $76 million.

Under the Federal Food, Drug and Cosmetic Act (FDCA), a company such as Wyeth is required to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. In 1999, Wyeth received approval from the FDA for use of Rapamune in renal (kidney) transplant patients; however from 1998 through 2009, it promoted Rapamune for unapproved uses, some of which were not medically accepted indications, and, therefore, were not covered by Medicare, Medicaid and other federal health care programs.  Wyeth’s sales force was trained to promote this drug for off-label uses not approved by the FDA, including ex-renal uses, and even paid bonuses to incentivize those sales.

The unapproved uses included non-renal transplants, conversion use (switching a patient from another immunosuppressant to Rapamune) and using their drug in combination with other immunosuppressive agents not listed on the label. The government alleged that this conduct resulted in the submission of false claims to government health care programs.

Pfizer is currently subject to a Corporate Integrity Agreement (CIA) with HHS’ Office of Inspector General that it entered in connection with another matter in 2009, shortly before acquiring Wyeth.

Richard P. Kusserow served as DHHS Inspector General for 11 years.  He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters.  The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2013 Strategic Management Services, LLC.  Published with permission.