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Pharmaceutical Fraud: What is Off-Label Marketing?

Promoting unapproved uses for drugs puts patients and pharmaceutical companies at risk. Learn about off-label marketing and how to prevent this form of pharmaceutical fraud.

Posted by Ann Snook on May 10th, 2019

In 2012, one prominent pharmaceutical company was forced to pay $3 billion in fines for promoting the use of their drugs in ways that were not approved by the US Food and Drug Administration (FDA). Known as off-label marketing, this type of pharmaceutical fraud puts drug companies’ profits before patient welfare.

Catching schemes like off-label marketing during an internal pharmaceutical fraud investigation keeps patients’ well-being in mind while ensuring your business complies with FDA and US Department of Justice (DOJ) regulations.

 

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What is Off-Label Marketing?

 

Before you can discuss off-label marketing, you must first understand off-label drug use. When a patient uses pharmaceuticals in ways that were not approved by the FDA or the DOJ, it is considered off-label use. This can include using a drug for unapproved symptoms or conditions, in an unapproved dosage or for an unapproved patient group.

Off-label marketing involves pharmaceutical companies and medical practitioners promoting off-label use to their customers and patients. Not only does this practice pose a health risk for patients who use drugs in unapproved ways, but it can also be part of a pharmaceutical fraud scheme.

 

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Signs of Off-Label Marketing

 

By promoting off-label use, off-label marketing allows fraudsters to increase sales. Insurance companies and private payers pay for ineffective drugs while the criminals make extra profits. In order to pull off the fraud, companies may:

  • provide doctors or patients with free samples of a drug
  • give sales representatives financial incentives for off-label drug sales
  • give doctors kickbacks for off-label drug prescriptions
  • spread misleading advertising promoting off-label use of a drug
  • publicize studies showing efficacy of off-label use and suppress studies that prove inefficacy
  • pay doctors to give lectures, serve on advisory boards, or pretend to be authors of papers promoting off-label use
  • make false representations to insurance providers to influence their decision to cover drugs used off-label
  • review patient charts so they know which patients to target with off-label marketing

 

Pharmaceutical fraud is not always easy to spot. When investigating off-label marketing, look for these red flags:

  • Employees receive verbal orders that are different from written policies
  • Sales representatives are told to focus on the symptoms that a drug can cure rather than the “big picture” of an illness
  • Employees are given explicit instructions to delete communications (email, documents, brochures) that discuss specific off-label uses for a drug
  • The company has sales quotas that could only realistically be met through off-label marketing

 

 

Case Study: Allergan

 

In 2010, Allergan, the makers of Botox, were fined $600 million after pulling off an off-label marketing scheme. The company created a marketing campaign that promoted the drug for uses not approved by the FDA, including headaches and spasms in children with cerebral palsy. In the complaint, the government claimed Allergan had “illegally, vigorously, and without any thought to the possible negative health effects to which it subjected patients, promoted” Botox for off-label uses.

To pull off their fraud, Allergan allegedly paid kickbacks to doctors who agreed to prescribe the drug for off-label uses. They also, according to the complaint, taught doctors how to code the prescriptions for an approved treatment in order to be reimbursed by government healthcare programs like Medicare.

By marketing Botox as a treatment for conditions that were not approved by the FDA and rewarding doctors for prescribing the drug for off-label uses, Allergan increased their sales but put patients at risk. Putting sales above well-being is what makes off-label marketing like this one of the most dangerous forms of pharmaceutical fraud.

 

RELATED: Medicare & Medicaid Fraud Investigations: Health Reform in the US

 

Preventing Pharmaceutical Fraud

 

Being fined by the FDA or DOJ for non-compliance can ruin a drug company’s reputation. Finding ways to prevent and detect pharmaceutical fraud can save your organization time and money.

The first step towards preventing pharmaceutical fraud in your company is to set up a strong complaint platform. Allowing customers and whistleblowers to submit anonymous tips can help you stop off-label marketing and other forms of pharmaceutical fraud before they escalate. Whether you use a hot line, a webform, or another reporting mechanism, make sure your platform allows you to follow up with the reporter while protecting their anonymity.

 

i-Sight’s built-in ethics portal captures reports immediately and provides two-way anonymous communication to boost your ethics and compliance.

 

Creating thorough incident reports and trend maps provides valuable insight into fraudulent behavior. Using software with a built-in reporting tool streamlines the process, allowing you to spot patterns and stop fraud before it escalates.

 

Between 2009 and 2016, the DOJ recovered a total of $19.3 billion under the False Claims Act, with at least $3 billion of that for off-label marketing schemes. Knowing the signs of off-label marketing and other forms of pharmaceutical fraud can protect patients as well as your employees and bottom line.


Ann Snook
Ann Snook

Marketing Writer

Ann is a marketing writer at i-Sight Software. She writes about issues related to investigations of fraud, employee misconduct, corporate security, Title IX, ethics & compliance and more.

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