Eli Lilly Pleads Guilty to Illegal Marketing of Zyprexa
By Marilyn Mann, U.S. Securities and Exchange Commission, Washington, DC
I. Off-Label Marketing of Zyprexa
On January 15, 2009, the Department of Justice announced that Eli Lilly and Company (Lilly) had agreed to plead guilty and pay $1.415 billion for promoting its drug Zyprexa (olanzapine) for uses not approved by the Food and Drug Administration (FDA). This included a criminal fine of $515 million, the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a U.S. criminal prosecution. The criminal information charged the company with promoting Zyprexa for such unapproved uses as treatment for dementia in elderly persons. In the plea agreement Lilly admitted its guilt to a misdemeanor criminal charge. It also entered into a civil settlement agreement under which it will pay up to an additional $800 million to the federal government and certain state governments to resolve civil allegations originally brought in four separate lawsuits under the qui tam provisions of the federal False Claims Act.
Under the federal Food, Drug, and Cosmetic Act (FDCA), a company must specify the intended uses of a drug in its New Drug Application (NDA) to the FDA. Before approving a drug, the FDA must determine that the drug is safe and effective for the uses specified in the NDA. Once approved, a drug may not be marketed for unapproved (“off-label”) uses.
Zyprexa has been approved for the treatment of schizophrenia and bipolar disorder. The criminal information alleges that, beginning in 1999, Lilly promoted Zyprexa for the treatment of agitation, aggression, hostility, dementia, depression and generalized sleep disorder. The information alleges that Lilly used its long-term care sales force to promote the use of Zyprexa in nursing homes and assisted living facilities. In addition, the information alleges that, beginning in 2000, Lilly began an off-label marketing campaign targeting primary care physicians (PCPs), even though primary care physicians generally do not treat people with schizophrenia or bipolar disorder. According to the information, Lilly trained its sales force to promote Zyprexa to PCPs by focusing on symptoms rather than diagnoses.
As part of a global settlement, Lilly entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the Department of Health and Human Services. In addition to various measures designed to ensure the adequacy of Lilly’s compliance program, the CIA requires that Lilly send doctors a letter notifying them of the global settlement and post on its website information about payments to doctors, such as honoraria, travel or lodging.
Lilly’s promotion of Zyprexa for dementia was far from a victimless crime. Zyprexa and other antipsychotics have been linked to an increased risk of death in elderly patients and have also been shown to be of little or no value in reducing dementia-related symptoms. Zyprexa can also cause significant weight gain, elevated cholesterol levels and diabetes. Thus, the available medical evidence suggests that Lilly’s off-label marketing of Zyprexa led to widespread adverse effects and a significant number of deaths.
II. Other Off-Label Marketing Cases
Lilly is not the only pharmaceutical company to engage in off-label marketing. For example, on September 29, 2008, Cephalon, Inc. agreed to pay $425 million and plead guilty to a misdemeanor because it engaged in off-label marketing of its drugs Actiq (fentanyl), Gabitril (tiagabine hydrochloride) and Provigil (modafinil). Actiq is a strong and highly addictive narcotic that is approved only for cancer patients who are already opioid-tolerant and suffering from breakthrough pain. Yet, with the slogan “Pain is pain,” Cephalon marketed Actiq to PCPs for non-cancer patients for such common ailments as back pain and migraine headaches. Cephalon also promoted Actiq for use in patients who were not yet opioid-tolerant, for whom it is particularly dangerous.
Another case of off-label marketing is the promotion of Neurontin (gabapentin), a Warner-Lambert anti-seizure drug approved in 1993 and widely promoted for off-label uses in the 1990s. In May 2004, Warner-Lambert admitted guilt and agreed to pay $430 million in relation to criminal and civil liability regarding the promotion of Neurontin for off-label uses. Interestingly, documents obtained in litigation show that the company’s marketing plan included many strategies that are legally permissible or reside in a gray area, such as recruitment of physicians for “peer-to-peer” selling programs, payments to academic physician “thought leaders” in the form of honoraria, research grants, funding of continuing medical education programs through “unrestricted educational grants,” and ghostwriting of research and review articles on off-label uses. The use of methods in which the promotional purpose is hidden appears to be a particularly effective way for pharmaceutical companies to increase sales for off-label uses of their products.
On February 25, 2009, the Department of Justice filed a complaint against Forest Laboratories, Inc. for alleged False Claims Act violations arising from the company’s marketing of the drugs Celexa and Lexapro for unapproved pediatric use and for paying kickbacks to induce physicians to prescribe the drugs.
While it is easy to find fault with pharmaceutical companies that promote drugs for off-label uses, it also should be recognized that pharmaceutical companies do not directly administer drugs – physicians do. Owing to recent revelations about the influence of the pharmaceutical industry over the practice of medicine, public perception of the relationship of the drug industry, doctors and scientists is at an historic low. A number of proposals for increased transparency in relationships between the pharmaceutical industry and medical profession are being circulated. Several states have enacted laws that require disclosure of payments made by pharmaceutical companies to physicians, and similar legislation that would impose such requirements on a national level has been introduced in Congress. To this observer, it seems likely that the trend will be toward increased disclosure of financial relationships between the medical profession and the pharmaceutical industry as health reform proposals are enacted over the next couple of years.
The ABA Health eSource is distributed automatically to members of the ABA Health Law Section . Please feel free to forward it! Non-members may also sign up to receive the ABA Health eSource.