Drugmaker CEOs May Be Targets for U.S. FDA in Off-Label Cases, Lawyer Says

Drugmaker executives whose companies promote unauthorized uses of their medicines may be targeted by U.S. regulators for misdemeanor prosecutions, Food and Drug Administration Deputy Chief for Litigation Eric Blumberg said.

Blumberg didn’t offer a timetable for the agency to take such actions during remarks yesterday at Washington conference. He cited Pfizer Inc., the world’s largest drugmaker, for violations of a federal law that bars manufacturers from promoting drugs for uses other than those approved by the agency, a practice called off-label marketing.

Pfizer, based in New York, struck the largest off-label promotion settlement to date in September 2009, agreeing to pay $2.3 billion for unauthorized marketing of its recalled painkiller Bextra and three other drugs. Pfizer acquired Bextra when it purchased Pharmacia Corp. in 2003. The settlement only involved sales practices and not the safety of the drug.

“It’s clear we’re not getting the job done with large, monetary settlements,” Blumberg said. “Unless the government shows more resolve to criminally charge individuals at all levels in the company, we cannot expect to make progress in deterring off-label promotion.”

Ray Kerins, a Pfizer spokesman, said that “over the past several years, we have invested substantial resources in order to create a compliance program that consists of mandatory training for every one of our employees, proactive monitoring and surveillance, and strict enforcement of all federal and state health-care laws.” He didn’t directly address Blumberg’s remarks.

Photographer: Daniel Acker/Bloomberg

Tablets of Pfizer Inc's painkiller Bextra. Close

Tablets of Pfizer Inc's painkiller Bextra.

Close
Open
Photographer: Daniel Acker/Bloomberg

Tablets of Pfizer Inc's painkiller Bextra.

Tread Lightly

Wes Metheny, senior vice president of the Pharmaceutical Research and Manufacturers of America, the drug industry’s Washington trade group, said the FDA “should use its enforcement powers proportionately, especially if it is considering charging employees with an alleged crime for which they had no knowledge.”

Pfizer fell 7 cents, or less than 1 percent, to $17.66 at 4 p.m. in New York Stock Exchange composite trading. The Standard and Poor’s 500 Pharmaceuticals Index of 11 companies has risen 7.7 percent in the past year to 308.02.

Blumberg said he wasn’t speaking for the agency, and didn’t mention any specific drugmaker other than Pfizer. He said industry executives shouldn’t wait until the first charges are brought to bring their marketing into compliance.

Time to Comply

“If you’re a corporate executive or are advising a corporate executive, now is the time to comply,” he said. “That conduct may already be under the criminal microscope.”

Prosecuting executives with misdemeanors for violations of the federal Food, Drug and Cosmetic Act falls under the Park Doctrine, named after the 1975 U.S. Supreme Court case against a retail food chain president. The strategy hasn’t been widely used for drug industry cases in the past two decades.

Executives would face as much as $100,000 fines and one year in jail. The FDA also can bar individuals from working in the drug industry.

“This can be a career-ending move,” said Douglas Farquhar, an attorney with Hyman, Phelps & McNamara in Washington in an Oct. 8 teleconference.

Jim Prutow, a consultant who helps drugmakers and medical- device companies comply with FDA rules, said he expects the Park Doctrine to be used within the next six months.

Forgotten Action

“Until two or three months ago, most companies hadn’t heard of the Park Doctrine,” said Prutow, a partner at the management consulting firm PRTM in Newport Beach, California, in an Oct. 5 telephone interview. “It really was a forgotten action.”

FDA Commissioner Margaret Hamburg promised more misdemeanor prosecutions in a March 4 letter to Iowa Republican Senator Charles Grassley.

The Park Doctrine was not used after the early 1990s because officials in the FDA’s office of criminal investigations focused on felony cases, John Fleder, also an attorney with Hyman, Phelps & McNamara, said in an Oct. 11 telephone interview.

Off-label marketing was not a major concern, and federal prosecutors tended to press cases that didn’t always result in quick settlements, Fleder said.

“I think that a lot of prosecutors would find an off-label use Park case as something that would be quite challenging,” Fleder said.

Regulators weighing such action should think twice, said Scott Gottlieb, a former FDA deputy commissioner who is now a partner at Arcoda Capital in New York.

“As a society, we need to be very careful when we start to criminalize conduct by an individual that doesn’t involve them actually committing a crime,” he said in an Oct. 6 e-mail. “Ultimately one of these cases is going to get challenged through the court system.”

To contact the reporter on this story: Anna Edney in Washington at aedney@bloomberg.net

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.