On the MLB (that’s baseball) website the other day was a story about the threat of various elected members of the Baseball Hall of Fame to boycott Cooperstown (the very location is a phony story cooked up about a century ago) if any of the so-called “dirty” players − those who allegedly used steroids off-label − were also elected. So far Mark McGwire (of his almost 600 home runs) and Rafael Palmiero (of his 3000+ hit and 500+ home runs) haven’t made it, but next year’s crop includes Barry Bonds (probably the best (and maybe the most) offensive player ever); and Roger Clemens (probably the best pitcher since the advent of the lively ball) are up. Neither of them ever tested positive for the stuff − and steroids weren’t even against baseball rules when they (mostly) played (why they weren’t tested at all).
But off-label use of steroids for the purposes of performance enhancement was against federal law, and both of them were unsuccessfully prosecuted for their alleged use.
Why all the furor over violations of federal law? How many times did Babe Ruth violate federal law (the Volstead Act − otherwise known as Prohibition), or Jimmie Foxx, or Grover Cleveland Alexander, or others from baseball’s Jim Crow years (a major argument why Bonds was better, in the context of better opposition, than Ruth or Ted Williams)? Nor did Paul Molitor’s admitted cocaine use keep him out of the Hall.
Of course, none of them used banned substances for performance enhancement − although nobody can be sure what they would have done if they had the chance.
Wait a minute.
Why is it worse to use a substance, one that’s illegal under federal law, but not (then) banned by baseball, for performance enhancement rather than performance degradation? Wasn’t there a “best efforts” clause in the standard baseball contract? There’s a legitimate argument that it’s worse to engage in illegal conduct that makes you play poorly than illegal conduct that makes you play better. As fans, we know which way we’d go on that. The players we boo (at least us Philly fans) are those who dog it, not those who give their all to win.
After all, using a substance banned by baseball − but not illegal − for performance enhancement isn’t considered a disqualification for the Hall of Fame. Just ask Gaylord Perry (spit) … or George Brett (pine tar) … or Whitey Ford (mud − can a belt buckle be considered a substance?).
But breaking the law − especially federal law − to better one’s performance is somehow considered beyond the pale by a significant portion of both the Hall of Fame electorate and membership. They should look in the mirror, or better yet in the Hall. What is Adrian Constantine Anson doing in the Hall? Nobody damaged baseball more than old Cap, who more than any other person was responsible for banning black players from National Agreement baseball in the 1880s.
Preventing maybe 60 Hall of Fame caliber players from ever getting to play − that’s OK for the Hall. Breaking the law to better one’s performance? That’s supposedly a no-no.
Sort of reminds us of all the litigation about “illegal” promotion of off-label use. That’s breaking the law − even if everything that the company allegedly said or did was entirely truthful. The off-label information may well be very useful, even critical, to physicians trying to save lives and preserve health. So there’s really no basis for arguing that truthful promotion of off-label use in general degrades the public health, and in many cases it probably enhances it.
But it’s illegal.
So our clients get sued, a lot, for allegedly doing it.
And time and time again, the plaintiffs seek recovery, not because there’s anything wrong with the information itself, but simply because it’s “illegal.”
But off-label promotion, without more − the same sort of “more” that we agree should keep Pete Rose out of the Hall of Fame (at least until he serves every day of his lifetime suspension), but not Bonds or Clemens (or a number of others) − is not a fraud, because it’s not false or misleading. “Illegal” promotion can be perfectly truthful:
Critically, in order to establish a misdemeanor misbranding violation, the government need not adduce any evidence that the individual or entity that promoted the product off-label did so with an intent to defraud. An article may be misbranded pursuant to the misdemeanor provision without any conscious fraud at all,’ thus creating a form of strict criminal liability.
In re Actimmune Marketing Litigation, 2010 WL 3463491, at *7 (N.D. Cal. Sept. 1, 2010) (citations and quotation marks omitted). So in honor of the Hall of Fame, and to underscore the distinction between “illegal” and “wrong”, we thought we’d discuss those cases holding that off-label promotion, legal or not, isn’t fraud.
Instead, what such claims amount to is “legally unsupportable attempt[s] to bring a private cause of action . . . for . . . off-label promotion violations of the Federal Food, Drug and Cosmetics Act.” Central Regional Employees Benefit Fund v. Cephalon, Inc., 2010 WL 1257790, at *6 (D.N.J. March 29, 2010). “[I]nsofar as Plaintiffs’ claims are based solely on allegations that Defendants promoted [a drug] for off-label purposes, they constitute an impermissible attempt to bring a private suit for violations of the FDCA.” In re Epogen & Aranesp Off-Label Marketing & Sales Practices Litigation, 590 F. Supp.2d 1282, 1292 (C.D. Cal. 2008).
While off-label marketing is illegal, there is no private right of action to enforce it. Rather, a plaintiff must base his/her cause of action through some other recognized legal claim.
Clark v. Pfizer, Inc., 990 A.2d 17, 21 n.1 (Pa.Super. 2010) (rejecting fraud claim concerning promotion “for off-label uses for which the effectiveness had not been scientifically demonstrated”). “[A]s condemnable as [the] flouting of FDA regulations may be, the off-label promotion of a pharmaceutical product in violation of the FDCA simply does not give rise to fraud-based rights of action.” In re Schering-Plough Corp. Intron/Temodar Consumer Class Action, 2009 WL 2043604, at *10 (D.N.J. July 10, 2009).
Even in the context of FDA criminal prosecutions, it’s been established that “[p]romotion of off-label uses is not inherently misleading simply because the use is off-label.” United States v. Caronia, 576 F. Supp.2d 385, 397 (E.D.N.Y. 2008); accord United States v. Caputo, 288 F. Supp.2d 912, 921 (N.D. Ill. 2003) (“[g]iven the sophistication of the audience [physicians] to whom the off-label uses were promoted”). Thus, FDA criminal penalties do not establish anything more than a non-actionable FDCA violation:
[O]ff-label marketing and promotion is not inherently fraudulent, and the plaintiffs may not rely on [defendant’s] alleged past statutory or regulatory violations to state a common law claim for fraud. In the absence of any specific allegations of fraud, as opposed to the mere fact of off-label marketing, the plaintiffs’ common law fraud claims must be dismissed.
Central Regional Employees Benefit Fund v. Cephalon, Inc., 2009 WL 3245485, at *4 (D.N.J. Oct. 7, 2009) (footnote concerning “exclusive” federal enforcement omitted). “Moreover, courts have routinely refused to find promotional marketing of off-label uses fraudulent when they are directed at sophisticated audiences, like physicians.” In re Actimmune Marketing Litigation, 614 F. Supp.2d 1037, 1055 (N.D. Cal. 2009) (following Caronia, 576 F. Supp.2d at 397-98).
The same phony equivalence between illegal and fraudulent has probably been shot down in federal RICO actions enough times to qualify the courts for “ace” status. “Promotion of off-label uses is not inherently misleading simply because the use is off-label.” Epogen/Aranesp, 590 F. Supp.2d at 1289 (citation and quotation marks omitted).
[M]any of plaintiffs’ allegations conflate a false and misleading statement under the FDCA, i.e., one that occurs when the drug label does not match the promoted assertion about the drug, and a false and misleading statement about the drug itself that can give rise to a claim under RICO. The two types of statements are not the same. . . . off-label marketing of an approved drug is itself not inherently fraudulent.
Actimmune, 614 F. Supp.2d at 1051 & n.6 (citations omitted).
Plaintiffs could not predicate RICO and state consumer fraud claims on what are, in essence, misbranding claims, absent allegations that [defendant] made false or deceptive statements. This is because off-label promotion is not inherently fraudulent; truthful off-label promotion of drugs does not violate RICO or state consumer protection laws.
In re Epogen & Aranesp Off-Label Marketing & Sales Practices Litigation, 2009 WL 1703285, at *7 (C.D. Cal. June 17, 2009). Accord In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 2010 WL 2346624, at *8 n.6 (D.N.J. June 9, 2010) (“[o]ff-label promotion may run afoul of the FDCA, but it does not by itself necessarily constitute fraudulent conduct”), aff’d, 678 F.3d 235, (3d Cir. 2012); Central Regional Employees, 2010 WL 1257790, at *3 (“[o]ff-label marketing activities, including [defendant’s] alleged payment . . . for studies, are not inherently fraudulent”); Schering-Plough, 2009 WL 2043604, at *10 (“[plaintiffs’] theory of injury requires the Court to assume that off-label promotion is, by its very nature, fraudulent conduct. This is not reality.”).
The improper equation of “fraud” with allegedly illegal off-label promotion has, not surprisingly, raised its ugly head in claims that allege fraud or misrepresentation. In such cases, “it is well-established that off-label marketing of an approved drug is itself not inherently fraudulent.” Central Regional Employees, 2010 WL 1257790, at *5. Accord Rohlik v. I-Flow Corp., 2011 WL 2669302, at *3 n.4 (E.D.N.C. July 7, 2011) (“there is nothing inherently fraudulent or misleading about promotion of off-label uses for medical devices”); Central Regional Employees, 2009 WL 3245485, at *4 (“[m]erely alleging that [defendant] marketed the drugs at issue for off-label purposes does not state a claim for fraud”); Hood v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., 2009 WL 561575, at *2 (N.D. Miss. March 4, 2009) (“it is not the act of causing the submission of a claim for a non-medically accepted indication that creates liability under state law causes of action, but rather the act of causing the submission of a false or fraudulent claim”); Pennsylvania v. Elli Lilly & Co., 511 F. Supp.2d 576, 582 (E.D. Pa. 2007) (quoted in Hood).
We’ve also come across repeated holdings that “illegal” doesn’t mean “fraud” in the context of False Claims Act litigation, where it seems that relators can’t get it through their heads that “false” actually means false.”
[T]he mere fact that [defendant] may have been violating FDA regulations [regarding promotion of off-label use] does not translate into liability for causing a false claim to be filed. Violations of laws, rules, or regulations alone do not create a cause of action under the FCA. It is the false certification of compliance which creates liability. . . . Thus, some request for payment containing falsities made with scienter (i.e., with knowledge of the falsity and with intent to deceive) must exist.
U.S. ex rel. Polansky v. Pfizer, Inc., 2009 WL 1456582, at *7 (E.D.N.Y. May 22, 2009) (emphasis original). Accord U.S. ex rel. Bennett v. Medtronic, Inc., 747 F. Supp.2d 745, 779 (S.D. Tex. 2010) (“relator has alleged a number of unlawful promotional tactics. The cases recognize that “even if a drug or device manufacturer’s marketing or promotion activities violate FDA regulations, that is insufficient to plead that the manufacturer caused physicians or hospitals to submit false claims.”); U.S. ex rel. Bennett v. Boston Scientific Corp., 2011 WL 1231577, at *29 (S.D. Tex. March 31, 2011) (same court dismissing almost identical claim by same repeat relator against different defendant); Smith v. C.R. Bard, Inc., 730 F. Supp.2d 783, 803 (M.D. Tenn. 2010) (“a violation of a law or a regulation standing alone is not proof of a false claim” because “physicians may prescribe drugs for off-label use”); see U.S. ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 732-33 (1st Cir. 2007) (off-label promotion “while illegal, [is] not a sufficient basis for an FCA action”; plaintiff must “establish that false claims were submitted”).
Moreover, since off label use is often paid for by the government, its promotion isn’t automatically a false claim for similar reasons:
To state a claim under FCA . . . Relators must sufficiently plead that the Medicaid reimbursement claims filed as a result of [defendant’s] conduct (here, its off-label promotion of [the drug]) were “false or fraudulent.” [Defendant] contends that if a state Medicaid program chooses to reimburse a claim for a drug prescribed for off-label use, then that claim is not “false or fraudulent,” and liability cannot therefore attach for reimbursement. The court agrees.
U.S. ex rel. Banignan v. Organon USA, Inc., ___ F. Supp.2d ___, 2012 WL 1997874, at *12 (D. Mass. June 1, 2012) (emphasis added).
Class actions proponents have also been hammered for improperly “assum[ing] that all off-label promotion was fraudulent”:
[T]he Court [has] differentiated between off-label promotion and fraudulent promotion. . . . [P]laintiffs must show that the defendants’ alleged fraud caused the treating physician to prescribe [a drug] when he or she otherwise would have used alternative treatments. Thus, in order to differentiate those prescriptions that were caused by fraud from those that were attributable to non-fraudulent off-label marketing or other independent factors, a factfinder would have to perform a granular doctor-by-doctor analysis. This would be unmanageable.
In re Neurontin Marketing & Sales Practices Litigation, 2011 WL 1882870, at *4-5 (D.Mass. May 17, 2011). Accord In re Neurontin Marketing & Sales Practices Litigation, 754 F.Supp.2d 293, at 310-11 (D. Mass. 2010) (rejecting class expert for “not . . . demonstrat[ing] the extent of harm caused by the fraud, as opposed to run-of-the-mill off-label detailing”); In re Neurontin Marketing, Sales Practices & Products Liability Litigation, 257 F.R.D. 315, 229-31 (D. Mass. 2009) (rejecting methodology of litigation expert who “has assumed on instruction of counsel that all detailing during the class period was both off-label and fraudulent”).
Finally, we’ve found one instance of a court in a Lanham Act case also pointing out that off-label promotion isn’t enough to establish fraud:
[T]he Court notes that [plaintiff] cannot prove falsity simply by relying on statements made in FDA letters that apply FDA standards. A Lanham Act plaintiff must do more than assert that the challenged claims are inadequately substantiated under FDA guidelines; the plaintiff must also show that the claims are literally false or misleading to the public.
Bracco Diagnostics, Inc. v. Amersham Health, Inc., 627 F. Supp.2d 384, 471 (D.N.J. 2009) (citation and quotation marks omitted).
All in all, we think it’s pretty clear that the courts understand the distinction between “illegal” and “false” promotion in the off-label context. Many plaintiffs in various contexts have tried, but failed, to blur that distinction. Thank goodness we don’t select our judges from the Baseball Writers’ Association.