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Pharmaceutical Off Label Sales Leads to False Claims Act Settlement


Pharmacy.Drug.Pills.Off.Label.False.Claims.Dollar.Photo.Club.12.23.15.jpgAs we have discussed previously, whistleblowers play a vital role in our society; they are uniquely situated to report frauds perpetuated on the government and the tax paying public.

Our Award Winning New York Whistleblower Attorney has been asked to comment on a recent multi-million dollar settlement resolving a Medicaid fraud case that was brought under state and federal False Claims Acts. If you are aware of any situations where the government is being defrauded, contact our office for a confidential consultation. As discussed below, it is imperative that whistleblowers speak with counsel before taking any steps.

United States of America ex rel. J. Doe, et al. v. Inspire Pharmaceutical, Inc.

The complaint was brought on by a whistleblower, a former sales manager for Inspire Pharmaceutical, Inc. (“Inspire”). According to the allegations of the complaint, the ocular drug, AzaSite, had been approved for the treatment of bacterial conjunctivitis, also known as “pink eye”. The Food and Drug Administration (the “FDA”), however, had not approved it for treatment of any other illness. Notwithstanding the lack of approval, from 2008 through May of 2011, Inspire allegedly aggressively and misleadingly marketed the drug’s use for the treatment of another eye condition, blepharitis. The complaint alleged that the marketing efforts, aimed at doctors, focused on AzaSite’s supposed anti-inflammatory properties, despite the lack of substantial evidence or substantial clinical experience. As a result of the misleading advertising, the government alleged that “federal healthcare programs pay[ed] millions of dollars in false claims.”

Off-label marketing is a heavily debated topic within the healthcare industry, especially in the context of the False Claims Act. Advocates of off-label marketing argue that prohibiting the practice is tantamount to a First Amendment violation by denying a company’s right to free speech and advertising. The federal government, however, maintains that the only reimbursable uses are those that have been approved. Marketing pharmaceuticals for uses other than those that are FDA approved, and doing so by making misleading statements puts patients in danger of unexpected and unknown side effects. Having taxpayers pick up the bill, almost literally adding insult to injury, and subsequently causing invoices to be submitted for reimbursement could (and did) trigger False Claims Act liability.

The Settlement

The parties, including the federal government, Inspire, 47 states, (including New York) and the District of Columbia, and the whistleblower entered into a settlement agreeing to the following:

  • Inspire agreed to pay $5,960,163.28;
  • Inspire admitted that starting in January 2008, it commenced an advertising campaign designed to broaden the customer base for AzaSite by focusing on, among other things, AzaSite’s claimed anti-inflammatory effects, which were not approved by the FDA, and were not demonstrated by substantial evidence or substantial clinical experience; and
  • Inspire further admitted that AzaSite was prescribed for blepharitis, and that claims to treat blepharitis were submitted to federal healthcare programs for payment.

Know.Your.Rights.Dollar.Photo.Club.3.9.15.jpgBut for a whistleblower coming forward, an untold number of patients would have been continuously put at risk, and Inspire could have defrauded the government of millions of additional tax dollars. For specific counsel regarding your situation, contact our Whistleblower Attorneys at (800) 893-9645 for a confidential consultation and learn your rights and options.

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