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It has been some time since we have discussed False Claims Act (“FCA”) litigation over alleged promotion of a prescription drug for off-label uses.  And when we read United States ex rel. Hearrell v. Allergan, Inc., 2024 U.S. Dist. LEXIS 70888 (E.D. Tex. Apr. 18, 2024) we were reminded why.  Off-label promotion is not ipso facto false. 

Plaintiff alleged that defendant promoted Botox for the off-label use of pediatric migraine therapy.  But an FCA claim has to begin with a “false statement or fraudulent course of conduct.”  Id. at *7.  Once upon a time, FDA took the position, and relators ran with it, that all off-label promotion was false or misleading.  But courts are not buying that anymore.  Afterall, physicians are allowed to prescribe drugs off-label, so an off-label prescription is neither factually false nor misleading.  Moreover, neither Medicare nor Medicaid categorically prohibits reimbursement for off-label uses.  Id. at *8.  The standard for reimbursement is whether the treatment is “reasonable and necessary.”  Here, plaintiff conceded the reasonableness and necessity of the treatment.  Id. at *9-10.  Plaintiff also attempted to establish falseness by claiming that defendant violated other federal laws such as the Federal Food, Drug & Cosmetic Act, the Public Health Service Act, and the Anti-Kickback Statute.  But that was not enough absent allegations that defendant certified compliance with those statutes.  Id. at *10.          

The absence of a false statement or false certification was fatal to plaintiff’s off-label promotion claim, but the court did not stop there.  The second element of an FCA claim is materiality—had the government known of the claimant’s violation, it would not have paid the claim.  The relator in this case did not offer any facts to support an inference that the off-label nature of the drug prescriptions was material to either Medicare or Medicaid’s payment decisions.  Id. at *11.  Nor could he since the payment decision turns on medical reasonableness and necessity, not the drug’s labeling.   

The final element of an FCA claim considered by the court was scienter—that the alleged fraud “amounts to more than innocent mistake or negligence.”  Id. at *8.  Plaintiff alleged that 48 claims for pediatric therapy were submitted to the government for payment.  But the mere submission of off-label claims by third parties, even with the defendant’s claimed knowledge, is not sufficient scienter to support an inference of fraud.

FCA off-label promotion claims have two major hurdles to overcome.  First, off-label promotion is not in and of itself false.  Second, Medicare and Medicaid reimbursement is not governed by whether the prescription was on or off label.  Which is why we don’t see as many of these claims as we used to.  But it’s nice to be reminded why we shouldn’t see any at all.