FDA appears likely to target flagrant off-label promotion in its first cases under new procedures for using the Park Doctrine and strict liability statutes to prosecute corporate executives and others.

The doctrine allows the government to hold executives and others responsible for misdemeanor violations even if they had no prior knowledge of the conduct.

The agency is not satisfied with prior off-label prosecutions and attempts to curb the conduct and appears ready to use Park to fight and deter blatant violations.

Examples of flagrant off-label promotion, according to Eric Blumberg, deputy chief for litigation in the Office of Chief Counsel, include trying to sell a drug to practitioners who would not prescribe the drug for an on-label use, marketing a drug for a use even though FDA has declined to approve a supplement, and training sales staff to deceive physicians.

The Park Doctrine

Allows the government to obtain misdemeanor convictions against individuals for violating the Food, Drug and Cosmetic Act
Conviction is possible even if the individual had no knowledge of the violation
Corporate officials can be convicted because they have the power to prevent or correct violations

Blumberg told a Food and Drug Law Institute conference Oct. 13 FDA is committed to bringing more misdemeanor cases.

“Unless the government shows more resolve to criminally charge individuals at all levels in the corporate structure, not just the CEO, with misdemeanor off-label violations, and when appropriate, with felonies, we cannot expect to make progress in deterring, either specifically or generally, off-label promotion,” Blumberg said.

Blumberg also implied the agency will be pushing harder for U.S. attorneys to take the misdemeanor cases. Misdemeanor convictions are important to the drug industry, even though U.S. attorneys may think they have a limited impact and a low likelihood of jail time, he said.

For drug company executives, a misdemeanor conviction carries heightened publicity and damages their reputations. It also could lead to debarment or exclusion from participation in federal health care programs (Also see "OIG Developing Exclusion Standards For Individuals" - Pink Sheet, 18 October, 2010.).

Blumberg said government sanctions are ineffective in preventing off-label marketing because they do not discourage the companies’ profit motive.

“In my view, to the extent the government is unable to capture all lost profits and impose additional meaningful deterrence, these (previous off-label marketing) settlements provide an inadequate deterrent,” he said.

Agency officials have yet to release the new procedures for Park prosecutions. Blumberg said they remain a work in progress and would not divulge when they could be completed. He did say procedures for developing misdemeanor cases would be published in the FDA Regulatory Procedures Manual, the reference book agency employees use for enforcement and other matters.

Agency procedures now require criminal matters to go to the Office of Criminal Investigations promptly, Blumberg said. If OCI declines the case, FDA officials also could send it to the Office of Chief Counsel for potential referral to the Department of Justice, he said.

Blumberg already has warned a FDLI gathering that new standards for Park cases were imminent (Also see "Corporate Responsibility Standards Coming; Don't Be First Case, FDA Warns" - Pink Sheet, 24 May, 2010.).

The executive suite also will not be the only place investigators are going to look. Future Park cases also will look at lower-level employees as well, according to Washington, D.C. attorney John Fleder, of Hyman, Phelps and McNamara.

No Checklist For Bringing Park Cases

The Park Doctrine and strict liability standard give the government significant leeway in gaining a conviction. Prosecutors do not have to prove individuals had any intent to break the law, knowledge of violations or engaged in negligent conduct under the Food, Drug and Cosmetic Act (Also see "Prosecuting "Responsible" Execs: FDA Brandishes Powerful Legal Weapon" - Pink Sheet, 19 April, 2010.).

Based on Blumberg’s comments, FDA procedures for a Park case likely will not be standardized. Each will be considered based on its individual facts and he said it would be “futile” to write a checklist of circumstances that would lead to a Park prosecution.

The agency also could revert to the usual questions it asks about a case’s facts when deciding whether to bring a Park case. Those include:

Does the conduct result in actual or potential harm to the public?
How serious are the violations?
How widespread is the violation?
Is the violation egregious?
Does the violation reflect a pattern of illegal behavior and/or failure to heed prior warnings?

Agency warnings about violations that could lead to a Park case are not required prior to charges being filed and Blumberg said a lack of prior warning is not a defense to the charges.

“Given the notoriety of the government’s efforts to curtail off-label promotion, I would include flagrant off-label promotion as an example of the type of situation where executives should not expect a prior warning,” he said.

Yet Blumberg still gave a somewhat subtle hint in the speech. He said agency policy is to give companies warnings as an opportunity for self-correction, which saves resources on both sides and serves the public.

CEOs Can Protect Themselves

CEOs also will not be able to claim they were powerless to prevent or correct violations. Blumberg said recent corporate integrity agreements for off-label violations provide a roadmap for shielding executives from the strict liability responsibility in the Park Doctrine.

The example he mentioned was the CIA Pfizer signed last year as part of a $2.3 billion settlement of off-label marketing and physician kickback allegations involving several drugs (Also see "Pfizer Is First Company To Post Clinical Trial Payments" - Pink Sheet, 31 March, 2010.).

Sales staff should be told in writing in their initial and renewed employment contracts they will be terminated and reported to FDA if caught promoting a drug for an off-label use.

Blumberg also said marketing and sales force members should routinely file reports with a corporate officer stating whether they engaged in off-label promotion or know of any such conduct by others. Falsifying the reports should be a fireable offense, he said.

Those caught promoting off-label uses should be required to forfeit all commissions related to off-label use. Blumberg also suggested conducting background checks of new employees in sales and marketing positions and not hiring anyone who has been debarred.

Blumberg suggested companies root out any problematic conduct, because it may already be under the microscope.

“I don’t know where, when or how many such cases will be brought … but if you’re a corporate executive or you’re counsel advising that corporate executive, I would not wait for the first case to decide now’s the time to comply with the law,” he said. “By the time the first case is publicized it will be too late for you to get a mulligan on your conduct.”

By Derrick Gingery

Off-Label Prosecution May Be Where FDA "Parks" Aggressive Enforcement Tools First

More from Archive

More from Pink Sheet