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High Court Rejects Pfizer's Request for RICO Off-Label Review

Sep 2, 2014

The United States Supreme Court has rejected an appeal from drug maker, Pfizer, letting stand a First Circuit ruling in which it was found that Pfizer improperly marketed Neurontin, its epilepsy drug, to Kaiser Foundation Health Plan.

The High Court’s denial means that Pfizer must pay Kaiser $142 million in damages for violating the Racketeer Influenced and Corrupt Organizations (RICO) Act. Pfizer must also pay another $65.4 million in restitution for violating the California Unfair Competition Law (UCL), according to Policy and Medicine. The ruling impacts two related cases brought against Pfizer by the insurer, Aetna Inc. and Harden Manufacturing Corp., which may now move forward and may allow for other lawsuits to proceed similarly, citing RICO violations.

Neurontin received U.S. Food and Drug Administration (FDA) approval in 1993 as an anti-seizure treatment for use in epilepsy patients. The government accused the drug’s manufacturer, Warner-Lambert, of illegally marketing the drug for a number of off-label, or unapproved, uses such as for the treatment of bipolar disorder, migraines, and Lou Gehrig's disease, Policy and Medicine reported. Pfizer acquired Warner-Lambert in 2000, according to Forbes.

While physicians may prescribe drugs for any uses they see fit—and government and private payors typically reimburse for these uses—it is illegal for drug makers to market drugs for off-label uses. For example, in one year, just 10 percent of Neurontin prescriptions were prescribed for approved uses; over one-third of the prescriptions involved daily doses that were greater than for what the drug was approved and for off-label treatments, according to Policy and Medicine.

Policy and Medicine also indicated that, in 2004, Warner-Lambert entered into a Plea Agreement with the Government that stated that the drug maker's criminal conduct led to $150 million in losses and also, due to a previous Food, Drug & Cosmetic (FDCA) conviction, Warner-Lambert's off-label violations were deemed felonies. The firm paid the Government $430 million in civil and criminal penalties.

Meanwhile, in 2001, Dr. David Franklin, a former medical liaison at Warner-Lambert, filed whistleblower action in 2001 in which he claimed that Parke-Davis engaged in a fraudulent scheme to promote the off-label use of Neurontin. Following the Warner-Lambert settlement, Kaiser and other health insurers brought suit over allegations that Pfizer's promotional efforts caused them to cover costs for off-label treatment of Neurontin, despite that the drug’s efficacy for the off-label uses was generally considered no better than placebo treatment. Kaiser and Co. did not file a health care fraud lawsuit and, instead, filed a RICO lawsuit against Pfizer for "engaging in a pattern of racketeering activity consisting of multiple acts of fraud,” which was based on the way in which the drug maker marketed Neurontin for multiple off-label uses, according to Policy and Medicine

The case went to trial in 2010 and Pfizer was found to have misrepresented Neurontin's efficacy for off-label uses directly to doctors; sponsored misleading informational supplements and continuing medical education programs; suppressed negative data on Neurontin, and published articles in medical journals that reported positive details concerning Neurontin's off-label efficacy. The jury awarded the insurer $47.3 million in damages, and, according to RICO, the judge tripled the damages, which led to a total jury verdict of $142 million.

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