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We don’t routinely follow qui tam litigation involving our clients. It’s not something that we, personally, defend against. It’s not our sandbox; qui tam trolls are the responsibility of other defense counsel.
But we are interested in off-label use. Thus Hopper v. Solvay Pharmaceuticals, No. 08-15810, slip op. (11th Cir. Dec. 4, 2009), caught our eye. It’s one of these cases where a supposed relator (almost invariably a disgruntled sales rep) tries to turn allegations of off-label promotion into a false claims case. The district court recognized the difference between off-label promotion (which is illegal under the FDCA) and the submission of false claims to the government. The district court held that government payment for off-label uses does not, in and of itself, equal a recoupable “false claim” and the 11th Circuit affirmed yesterday.
Two theories of false claim recovery were at issue. The first, under 31 U.S.C. §3729(a)(1), requires “presentment” – which is a term of art, that as we understand it from reading the opinion, requires proof that someone (usually a doctor) “knowingly” sent the government a false claim. Off-label promotion, followed by the government paying for such off label uses (it’s a weird statute – nobody seems to care whether the off-label use was medically effective or not) wasn’t enough. They had to allege that some presenter knew that the claim itself was dodgy:

The Complaint also includes what the relators describe as “a highly-compelling statistical analysis”. . .[showing off-label promotion followed by more claims submitted for off-label use]. But, the Complaint does not allege the existence of a single actual false claim. . . . [T]he relators’ Complaint does not identify a single physician who wrote a prescription with such knowledge, does not identify a single pharmacist who filled such a prescription, and does not identify a single state healthcare program that submitted a claim for reimbursement to the federal government.

Hopper, slip op. at 12-13 (emphasis added). In other words, there has to be intent to submit a false claim. It’s just possible for doctors to submit claims for off-label prescriptions that aren’t false (“the horror, the horror”). We’re glad to see that the False Claims Act recognizes that off-label use is legal – even if it doesn’t seem to recognize that it’s often clinically effective and within the medical standard of care. Without proof of anybody’s intent, the complaint simply “pile[d] inference upon inference to suggest that [defendant’s] marketing campaign influenced some unknown third parties to file false claims.” Slip op. at 13.
That’s the “presentment”-based claim.
There was a second claim, under 31 U.S.C. §3729(a)(2), that didn’t require presentment of actual false claims to the government. That, in and of itself, seems Orwellian to us, but there doesn’t seem to be any dispute about the statutory elements. It does, however, require specific fraudulent intent on behalf of the defendant and causation:

[A] plaintiff must show that (1) the defendant made a false record or statement for the purpose of getting a false claim paid or approved by the government; and (2) the defendant’s false record or statement caused the government to actually pay a false claim, either to the defendant itself, or to a third party.

Slip op. at 16 (emphasis added). And so, mere illegal off-label promotion isn’t enough to state a claim under this section either. The promotion must be intentionally directed at inducing a false claim and there must be reliance down the chain. There still must be a false claim. Id. (the section “demands proof that the government paid a false claim”). Off-label promotion (an “improper practice”) isn’t enough:

Improper practices standing alone are insufficient to state a claim. . .absent allegations that a specific fraudulent claim was in fact submitted to the government. . . . Congress intended this subsection to impose liability for false statements that actually cause the government to pay amounts it does not owe. . . .[T]he relators must show that the government paid a false claim. . . . Subsection (a)(2) is not, as the relators contend, a separate “attempt” provision.

Slip op. at 17-18 (emphasis added). Causation requires actual reliance upon bad faith statements:

[T]he Complaint remains deficient because it fails to allege that the defendants intended for the government to rely on their false statements in deciding whether to pay a false claim. . . . It is insufficient for a plaintiff to show merely that a false statement resulted in the use of government funds to pay a false or fraudulent
claim. . . . [T]heir complaint does not link the alleged false statements to the government’s decision to pay false claims. It fails to allege that the defendants intended for the government to rely on the substance of their off-label marketing campaign to decide to pay a claim. . . .

Slip op. at 21-22 (emphasis original). Thus – and to us it’s the important point – good faith off-label use by physicians who believe the use to be beneficial to their patients severs the causal chain, no matter how illegal the promotion itself may have been.

We cannot infer that because [defendant] allegedly intended its marketing campaign to convince physicians to write off-label prescriptions, [it] intended for that campaign to influence the government’s decision to pay for those prescriptions.

Slip op. at 22. There’s no “direct link” as long as the defendant isn’t intending for the government itself to rely on the off-label promotion. It’s not enough to allege that the off-label promotion was intended “to be material to physicians’ decisions to write off-label prescriptions.” There must be allegations that the defendant “intended its false statements to play a[] role in the government’s decision to reimburse.” Id. at 23.
We sure hope that Hopper is the law in this area. Off-label promotion is illegal, but off-label use isn’t. Off-label use in most cases is beneficial to patients, or otherwise physicians wouldn’t prescribe off-label so often. If off-label use is medically beneficial, then as far as we’re concerned it should be covered by governmental programs.
To equate off-label use with a false claim would inevitably deter provision of medically beneficial treatment simply because it’s off-label. If that happened, people could die. We care about that, even if qui tam relators don’t.