No Impact On Whistleblower Claims After Off-Label Drugs Ruling

MIAMI, FL, April 24, 2013 (Press-News.org) The Second Circuit Court of Appeals recently ruled that the First Amendment protects pharmaceutical companies and their employees from criminal prosecutions involving off-label drug marketing. Some observers think that this case could eventually lead to a new legal approach to off-label pharmaceutical uses - an approach that could conceivably change how off-label whistleblower lawsuits unfold against drug manufacturers and healthcare providers.

Although off-label prescription drugs are involved in many False Claims Act cases, this decision looks unlikely to have any major impact on whistleblower lawsuits.

United States v. Caronia

This case involved a pharmaceutical sales representative's appeal from a criminal conviction. The government accused the pharmaceutical sales rep of promoting products to doctors for off-label uses. An off-label use is any use other than those for which the federal Food and Drug Administration (FDA) specifically approved the drug.

Because the FDA does not actually regulate the practice of medicine, doctors are allowed to exercise their judgment to prescribe drugs for off-label uses. However, the Food Drug & Cosmetic Act (FDCA) does prohibit conspiring to misbrand a drug - and the government accused this defendant of doing exactly that.

Based on recorded conversations, the trial court convicted this defendant on charges related to off-label marketing and he appealed to the Second Circuit, arguing that the conviction violated his First Amendment speech rights.

The Second Circuit Court of Appeals agreed. It decided that promoting a drug for an unapproved use is not necessarily the same thing as conspiring to misbrand a drug. Because the FDCA does not make off-label marketing or promotion a criminal offense and because the salesman only made truthful statements in the recordings, the court relied on a long chain of decisions to conclude that the government could not punish the defendant for truthfully promoting a drug for off-label uses.

Caronia's Relationship to False Claims Act Lawsuits

The False Claims Act prohibits anyone from submitting fraudulent bills to the government for payment. One of the FCA's most powerful tools in this anti-fraud fight is that it empowers individuals to act as whistleblowers. Whistleblowers can bring lawsuits on the government's behalf to expose fraud.

Many FCA cases involve Medicare or Medicaid reimbursements - hospitals and other health facilities submit charges to the government on behalf of Medicare enrollees. When healthcare providers knowingly submit fraudulent reimbursement charges, employees and other individuals are empowered to sue them to reveal the wrongdoing.

Although this case did not involve the FCA, many Medicare whistleblower cases also involve off-label prescription drug use. Medicare regulations clearly limit reimbursements for prescription drugs to patients who are receiving them for a "medically accepted indication." This means that Medicare does not reimburse facilities for off-label drug prescriptions. Although doctors remain free to order these prescriptions, healthcare providers cannot knowingly bill for reimbursement without submitting a false claim.

While this provision allows hospital employees with knowledge of reimbursement billing to file whistleblower claims, the FCA applies to off-label drugs in another way. The government uses the FCA to try to prevent off-label marketing of prescription drugs by pursuing pharmaceutical companies themselves. Because so many Americans are Medicare enrollees, court decisions have agreed with the government that off-label marketing strategies are implicit attempts to seek illegal Medicare reimbursements. In other words, promoting an off-label use to Medicare enrollees is properly considered a false claim.

The Effect of Caronia on Whistleblower Lawsuits

Although some observers wonder whether Caronia might create strong First Amendment arguments in FCA cases, it is unlikely that those arguments will succeed.

In a nutshell, courts have consistently described the FCA as an anti-fraud law. Because the First Amendment does not provide protection for fraudulent speech, it is unlikely that a court would extend Caronia's reasoning to a whistleblower claim. False claims, as a form of fraud, are probably not entitled to First Amendment protections.

Even so, the fact remains that Caronia dealt with a criminal prosecution - a very different context involving a different statute. If Caronia ever does have an impact on FCA claims involving off-label marketing or prescriptions, it will likely be the result of a broader legal shift towards more acceptance for unapproved drug prescriptions - not a dramatic reversal of the courts' view of the FCA.

At this point, it seems unlikely that Caronia will affect the FCA's approach to whistleblower cases involving off-label prescriptions and marketing.

However, this case does highlight one important aspect of the CFA with regards to off-label drugs: pharmaceutical companies and medical facilities are eager to find any argument that could help them avoid whistleblower lawsuits. Currently, whistleblowers can report drug and pharmaceutical manufacturers for pursuing off-label marketing strategies. Individuals can also sue hospitals and medical facilities for seeking Medicare or Medicaid reimbursement for off-label prescriptions.

Whistleblowers are entitled to a significant portion of the recovered damages. An experienced nationwide False Claims Act lawyer can help discuss the circumstances of individual cases to determine whether a case exists.

Litigation Partners, P.L. and The Whistleblower Law Firm is a team of whistleblower attorneys working together to protect the rights of consumers and whistleblowers throughout the United States. From offices in Miami, Florida, our team of experienced trial attorneys represents individuals who have been harmed by defective or dangerous products or who are willing to take a stand against fraud and waste committed at the expense of U.S. taxpayers.

Additional Resources:
Whistleblower Lawyer Blog: http://www.federalwhistleblowerlawyers.com/blog/
How to Report Tax Fraud: http://www.federalwhistleblowerlawyers.com/Types-of-Employer-Fraud-Wr ... raud.shtml
How To Report Fraud: http://www.federalwhistleblowerlawyers.com/State-Federal-Whistleblower-Laws/