Changing of the Guard in Health Care Fraud

Michael Loucks, the single most prominent figure in the wave of pharmaceutical industry health care fraud prosecutions over the past decade, has left the US Attorney’s office in Boston after almost 25 years.

As we report in “The Pink Sheet” DAILY, Nov. 25 was Loucks’ last day in the office; he is taking leave time until his official last day on the job, Dec. 19. For most of his career, Loucks has focused on health care fraud prosecutions, helping to establish Boston and its health care fraud unit as the center of industry investigations and settlement activity.

Loucks was most recently First Assistant US Attorney, and served as acting US Attorney upon the resignation of Michael Sullivan in April. Loucks’ departure follows the confirmation of Carmen Ortiz as the new US Attorney for Massachusetts.

It is hard to overstate the impact Loucks has had on the pharmaceutical industry. Consider the ramifications of the first blockbuster case Loucks brought: the prosecution of TAP Pharmaceuticals at the start of the decade. The case focused on the marketing of Lupron and inducements tied to the incentives built into the Medicare reimbursement system for physician administered drugs. The case was settled in 2001 for a then-record sum of $875 million—with evidence gathered from a top executive turned whistleblower, supplemented by tapes of sales pitches, recorded by physicians who had turned state’s evidence.

That certainly got the attention of lots of folks in industry.

The settlement demonstrated that pharmaceutical industry sponsors could be successfully prosecuted under the False Claims Act, introduced the industry to the realities of operating under formal compliance programs, and helped spur legislation to reform the payment system under Medicare Part B. In other words, it helped change the rules of commercial success in the biopharma business.

And it did more than that. The size of the settlement—and especially the nine-figure payment to the TAP whistleblower—helped ensure that industry investigations would become an almost self-sustaining exercise, setting up health care fraud prosecutions as a kind of parallel regulatory system for industry. It also led to the reality for industry today, where (as we put it in “The Pink Sheet”) if you aren’t under investigation, it is because you already settled.

The TAP case was followed by other landmark settlements, like the Neurontin case—which emphatically demonstrated that off-label promotion can be successfully prosecuted despite assertions that FDA’s rules infringe First Amendment rights. The policy response to that case remains very much a work in progress—but only because the implications are so far reaching. (We outlined the issues in The RPM Report, here.)

Loucks is leaving the US Attorney shortly after his office set yet another record for a settlement, recovering $2.3 billion from Pfizer for marketing practices related to Bextra and a handful of other products. As has been the pattern, the case did more than recover money. It drove important changes in Pfizer’s business practices—for instance, the company bowed out of funding continuing medical education activities as the investigation unfolded. And it dovetails with broader policy change by starting to define rules for disclosure of relationships with health care professionals that we suspect will soon be codified by legislation.

No Short Term Impact

Will Loucks’ departure mean any changes in the climate for prosecutions of pharmaceutical companies in the year to come?

In the short term, the answer is almost certainly, “no.” Loucks hasn’t been directly responsible for health care fraud cases in Boston for several years; a large and experienced team of prosecutors remains in place, and it will presumably be business as usual.

It also seems unlikely that the Obama Administration is going to rein in fraud prosecutions; quite the opposite, if the tough talk about fraud and abuse in Medicare is any guide.
And if you think Loucks was some kind of anti-industry zealot, think again. You should have seen the jaws drop when Loucks told The RPM Report’s FDA/CMS Summit in 2007 that he considers himself a conservative Republican and believes, generally speaking, that government intrusion in people’s lives is a bad thing that should be kept to a minimum. (Read more here.)

His successor, Ortiz, was recommended by Massachusetts’ two Democratic Senators (John Kerry and the late Ted Kennedy), so if anything you might expect a more interventionist tone at the top. And there is no reason to expect broad ranging disruptions at the AUSA level: Ortiz herself was an assistant US Attorney, having served in the Boston office since 1997.

But there may indeed be reasons to think the wave of health care fraud prosecutions from Boston is cresting. Ortiz’ focus has been on economic fraud; her list of the 10 most important cases in her career (submitted to the Senate Judiciary Committee as part of the confirmation process) includes telemarketing scams and pyramid schemes—but nary a health care case.
Ortiz is certainly unlikely to slow down the pipeline of pending investigations of health care fraud. But given that she got the job in the midst of an economic crisis, it seems safe to speculate that the priorities at the top may start to shift towards financial cases in the years to come.

Full Impact TBD

But those changes won’t happen overnight, and in the meantime we expect Loucks’ legacy will continue to be defined.

In economic terms, health care fraud prosecutions are lagging indicators. National headlines about record-breaking settlements come only after years of investigation, and inevitably involve assertions by the settling firm that the conduct involved is in the distant past, and does not affect current practice. And that is always true (though sometimes the “distant” past is not so distant, as in the Pfizer case where the allegations included activities as recent as October 2008.)

The pipeline of pending cases in Boston will no doubt include a number of other important settlements with significant commercial and policy implications. There’s just no way to know yet what they are.

Indeed, the last settlement announced under Loucks’ name—involving the long term care pharmacy provider Omnicare and the generic drug manufacturer Ivax—was relatively small and focused on a narrow market segment, but sure seems to suggest some huge cases to come (as we pointed out here.)

So it is still several years too early to even try to quantify the full impact of Loucks’ tenure on the biopharma sector. But this much we know: it is a big impact, and we don’t think it will look any smaller in the years to come.

Hard Time For Biopharma CEOs (Part 2)

The indictment of former Stryker Biotech President Mark Philip should hammer home a message that the Food & Drug Administration and other federal health care enforcement authorities have been delivering for at least two years: senior management at FDA regulated companies can and will be held criminally liable for marketing practices that run afoul of regulators.

Before today, that message has been (mostly) words. Prosecutions of executives have been rare, and when they do occur they tend to focus on individual sales reps and their direct managers, rather than reaching into the C-suite.

There have been exceptions. Former Intermune CEO Scott Harkonen is facing jail time after being convicted of wire fraud in a case involving claims that the company inappropriately promoted Actimmune via a press release. For Big Pharma CEOs, though, it is easy enough to dismiss that precedent, since Harkonen was personally involved in the activities at issue in the case—a small biotech CEO necessarily leaves more fingerprints, as it were.

Then there is the case of several top Purdue executives, who paid criminal fines as part of a settlement of an investigation into the promotion Oxycontin. That prosecution involved the application of the so-called Park Doctrine, named for a Supreme Court ruling which allows the government to hold top executives accountable for violations of the Food Drug & Cosmetic Act even if they were personally unaware of the violation. That is, the law makes it a crime to introduce misbranded or tainted products into commerce—and a CEO can be guilty of that crime even if he or she had no knowledge that someone somewhere in the company was doing that. (We discussed the implications of that prosecution in The RPM Report; click here.)

Still, the Purdue case was a bit of an outlier, a prosecution motivated by concerns about abuse of Oxycontin in some rural communities, rather than by the more common themes of recent industry marketing cases. It was a classic war-on-drugs case—not part of the war on the drug industry and its marketing practices.

Much more common has been what happened in the recent Pfizer settlement. The case included a record-setting fine ($2.3 billion) and lots of tough talk about holding individuals responsible. But the prosecution in that case focused on only one sales manager, who was convicted for her actions in promoting Bextra. For Pfizer’s senior management, the settlement means another corporate integrity agreement—but not direct accountability in the form of criminal charges.

At least so far.

But one wonders how long that pattern will continue. It is worth noting that the Pfizer settlement was negotiated before Inauguration Day—that is, before the new Administration had a chance to decide what if any changes it wants to make in approaching health care fraud prosecutions.

The Stryker case does not by itself answer that question. This investigation also began in the prior administration, and the charges (against the company and several sales executives in addition to Philip) focus on explicit acts, not the broader notion of executive liability inherent in Park. Specific counts include wire fraud and conspiracy, as well as overt acts of introducing misbranded or tainted products to the market—all based on what the government claims was a deliberate campaign to market bone morphogenic protein beyond the limits allowed by its humanitarian device exemption approval by FDA.

We have no idea whether those allegations are true, of course. But we also know this: Philip is no longer the President of Stryker Biotech, and he is no longer free to travel.

Philip “self-surrendered yesterday and appeared in court,” the US Attorney’s Office told us. “He was released on standard conditions and surrendered his British passport. His arraignment is set for tomorrow (Friday) at 2:00 p.m. in front of Chief Magistrate Judge Judith Dein.”

We’re betting Philip won’t be the only top executive to find himself standing before a judge as the Justice Department works though its backlog of marketing cases.

Allergan’s First Amendment Case: REMS vs. Off-Label Promotion – and DTC

Allergan filed suit against the Food & Drug Administration on Oct. 1, challenging the prohibition of off-label promotion of prescription drugs in the context of a new Risk Evaluation & Mitigation Strategy for the botulinum toxin therapy Botox. At the time, we had just gone to press with a story talking about how REMS might redefine pharmaceutical marketing.

Our thesis: that REMS offer at least the opportunity for commercial organizations to redefine practices viewed skeptically—things like speaker’s bureaus, scripted sales calls, “seeding studies,” etc.—as regulatory obligations that promote the public health. And that, done properly, both the commercial organization and the public health might well come out ahead. (You can read the article here.)

We’ve had the opportunity to discuss that article now with marketing professionals in several contexts, including industry meetings and one-on-one conversations. It fair to say there has been a range of opinion on our thesis--ranging from "you are completely crazy" to "you are completely crazy but you just might be right.”

Having had time to explore the implications of the Allergan suit, we now think we weren't crazy enough. It turns out that REMS aren't just offering a path to rehabilitate controversial marketing practices to support approved indications, they may in fact open the door for companies to promote unapproved uses without inviting crushing regulatory and civil penalties. That, at least, is Allergan's argument (which we explained in depth in “The Pink Sheet” here).

It is a long shot at best to think that Allergan will pull off a complete victory in the case—long in both the sense that most folks we’ve talked see the odds of victory as slim, and also long in the sense that a complete victory would almost certainly involve litigating all the way up to the Supreme Court.

But regardless of the outcome of the suit, the case is an extremely interesting new wrinkle in the still rapidly evolving field of REMS. (Sorry, there is something about Botox that makes puns irresistible.)

Because the simple truth is that FDA now has the authority to do exactly what Allergan wants—allow, or indeed, require greater communication about off label uses. The suit focuses on the fact that FDA is not allowing as complete communication as Allergan wants—but the fact is that FDA could allow that under the existing law and in some sense “approve” an off-label promotion campaign. We doubt they will for Botox, but we’ll keep our eyes peeled (is that another pun?) for a case where they do.

The Allergan suit highlights another thing marketers should anticipate in the context of a REMS: the re-emergence of commitments by sponsors not to advertise their products to consumers in the context of the new programs.

Early versions of the 2007 law included provisions that would explicitly have allowed FDA to impose a moratorium on DTC in the context of a REMS (and the agency already had done so in at least one “voluntary” risk management program negotiated before the law took effect.) Advertisers worked hard to get that provision stripped from the bill, but they did not get anything written into law that would stop sponsors from negotiating those types of provisions as part of a REMS anyway. (We covered all that here.)

How does that relate to the Allergan lawsuit?

In its court filing, the company lays out the off-label campaign it wants permission to conduct—in essence, the REMS agreement it wishes it could get.

And one of those provisions states: “Allergan does not seek to engage in direct-to-consumer communications about the off-label use of Botox.”

That's another one we'll be watching for: the first REMS that includes some limitations on DTC. And our hunch is it will be an agreement that the sponsor is only too willing to make.

Off-Label Promotion … By HHS

Like everyone else, we get more email in a day than we can possibly read, so sifting through the in-box is an exercise in triage and second-guessing. As in, “What were we thinking when we signed up for every HHS list-serve?”

Then there are days like today, when we saw the following gem glimmering in our over-crowded in-box:

Sender: US Dept. of Health & Human Services
Subject: Going Off-Label

Yeah, we opened that one. Given the billions upon billions paid (and to be paid) to settle prosecutions of manufacturers involving off-label use of medicine, we were keen to know exactly what HHS plans to do next.

Okay, so it turns out it was a link to HHS Healthbeat, a daily podcast for consumers, focusing on off-label use of medicine. (You can listen to the podcast here, or just read it—it's short—here).

“Everybody tells the patient to read and follow label directions. But sometimes the doctors themselves don’t. They prescribe a drug in ways – or for conditions – that the label doesn’t talk about,” HHS tells consumers.

Then some words of solace for those in industry who fear that off-label use is itself being criminalized in the context of recent enforcement actions: “That actually can be good for you. It’s called an off-label use, and the doctor may be acting based on the latest research.”

Now, HHS isn’t exactly encouraging off-label use. The podcast includes a quote from Agency for Healthcare Research and Quality Director Dr. Carolyn Clancy, who advises: “If it turns out that your doctor has given you an off-label drug, you should ask your doctor if the off-label drug is likely to work better than an approved treatment.”

Of course, that is also a question AHRQ can (and we assume will) help to answer, now that HHS has $1.1 billion to spend on comparative research…

The Zyprexa Settlement and The Perils of Primary Care

We have been writing for some time about Big Pharma's primary care problem: the industry is built on an incredibly lucrative business model--selling oral medications for use by millions of patients with chronic conditions--that is going away before our eyes.

The primary care market is shrinking. The regulatory system is tilting towards smaller, niche market opportunities. The infrastructure built to support the blockbusters of yore is choking the industry. And the imperative to develop the next Lipitor is surely one reason behind the staggering lack of productivity in Big Pharma R&D.

Well, here's something you might not have realized. Apparently Big Pharma's incredible success in building massive primary care markets can now be painted as criminal conduct. That, at least, seems to be one implication from Lilly's record-setting $1.4 billion settlement agreement to resolve an investigation into its marketing of the antipsychotic Zyprexa. [UPDATE: of course records are meant to be broken, right? Pfizer's $2.3 billion Bextra settlement, astutely camoflaged by the Wyeth takeover, now takes that dubious honor.]

According to the government's memorandum supporting the entry of guilty plea by Lilly, a key element of the off-label promotion at issue was a decision by Lilly to "market Zyprexa to primary care physicians, even though there was almost no on-label use for Zyprexa in this market."

Here are some excerpts from the memo. (NB: These are described in the memo as facts that Lilly agrees would have been proven at trial.)

“Eli Lilly commissioned a report entitled ‘The Primary Care Opportunity’ from a nationally-known consulting firm. This report found that ‘larger competitors [eg. Merck, Pfizer, Bristol Myers] are migrating toward the primary care channel with drugs driven by profile improvements’ as compared to Eli Lilly, which was headed in the direction of providing drugs in specialty markets. The consulting firm advised Eli Lilly that ‘Primary care is a large opportunity that is likely to remain important. Lilly does not outperform its competitors in primary care and is leaving money on the able with current and pipeline products.’ The report identified Eli Lilly products, including Zyprexa, that if sold in the ‘primary care channel’ could significantly increase Eli Lilly's woridwide sales....

"The evidence would show that in October 2000, Eli Lilly began to detail Zyprexa to PCPs even though at least one internal Eli Lilly document acknowledged that there was virtually no on-label use for Zyprexa in the primary care market. The document, ‘ZYPREXA – Primary Care Strategy and Implementation Overview,’ provided that detailing PCPs was a major challenge because ‘Zyprexa's primary indications - schizophrenia and bipolar - are not viewed as PCP [primary care physician]-treated conditions, so there's not a specific indication for Lilly reps to promote in the PCP segment.'

"To get around the impediment that Zyprexa's indications - schizophrenia and bipolar mania - were not viewed as PCP-treated conditions, sales representatives were instructed to tout Zyprexa as a safe option for the treatment of a wide array of mood disorders commonly treated by PCPs....

"According to an internal newsletter, Eli Lilly USA Online, published on July 25, 2001, the launch of Zyprexa into primary care was a huge success."

An Orphaned Article Gets Reprinted

Awards season feels like it’s winding down. The Oscars are still to come, but there’s already been Time’s Person of the Year, the Golden Globes – you even helped us choose a Deal of the Year. But recent events have made us look back on 2008 in a new light, and now it’s time to present the award for Least Read Article in “The Pink Sheet.” Last year’s, um – we’ll just call it an honor – goes to “Orphan Drugs Are Rare Area Of Agreement In Off-Label Debate.”

The article is sidebar to our coverage last year of FDA’s development of guidance on “good reprint practices” that would set goalposts for firms that wanted to distribute reprints of journal articles about their drugs that discuss uses not approved by the agency. The rest of our coverage about the draft is here, here, and here. FDA just finalized the guidance, and you can find coverage of that here and here. And don’t miss our related coverage of Lilly’s $1.4 billion settlement for off-label promotion violations (here and here).

So, yes, we write a lot about reprint issues, and maybe that’s the reason this particular article didn’t get the attention it deserved, or perhaps there was just a glitch in our page view accounting. Whatever the cause, we thought we’d give people another chance to read the piece. Because, as the Lilly settlement shows, issues that seem small at the time can become quite significant. Here’s hoping that our least read article of 2009 doesn’t become your billion-dollar problem in 2010.

Without further ado, here in its entirety is the Pink Sheet’s least read article of 2008. Both of you who’ve already read it can skip to the next post.

Orphan Drugs Are Rare Area Of Agreement In Off-Label Debate
While promotion of off-label drug use is a flashpoint issue, off-label drug use for rare or orphan diseases is not. Regardless of where people come down on FDA's draft guidance, they generally supported patients with limited access to approved drugs. For example, in an April 17 article in the New England Journal of Medicine which is generally critical of off-label promotion, Aaron Kesselheim and Jerry Avorn state that "In certain patient groups, such as children and patients with rare diseases, off-label use may reflect the standard of care."

Indeed, the National Organization of Rare Disorders -- which has often tangled with the pharmaceutical industry on issues related to patent extensions and consumer advertising -- in this case joins many drug firms in advocating for the draft guidance. The association did not submit comments to FDA, but, "I would ask Congress to keep in mind patients with rare diseases," Diane Dorman, NORD's VP-public policy, said at an April 16 media briefing sponsored by industry supporters of the guidance.

image from flickr user '... Tim' used under a creative commons license

Why Merck’s Problems are Also Your Problem

Will Vioxx never go away?

It has been four years since Merck withdrew the COX-2 inhibitor. It is a full year since Congress enacted legislation intended to “fix” the drug safety problems highlighted by Vioxx.

But Vioxx is still in the news. Now, the focus is on how the product was marketed. Academic journals, mining product liability dockets, are highlighting instances of “ghost writing” and “seeding studies” involving the product. The media gleefully piles on.

If you don’t work for Merck, you may be tempted to think none of this much matters. (Except perhaps as an occasion for schadenfreude, if the unrestrained glee of these posts is any indication.)

We’ve written before about the far reaching impact of a damaged reputation, and specifically about the implications of the blemishes on Merck’s once-stellar image as the drug company that does things the “right way.”

But Merck’s problems are not just Merck’s problems. The damage to Merck’s reputation is the whole industry’s problem.

Here’s why: Just as Vioxx was the short-hand explanation for a whole host of drug safety changes—most of which, both Merck and its harshest critics agree—had nothing whatsoever to do with the drug, now it is a short-hand for everything that people object to about industry marketing practices.

And Vioxx’ potency as a weapon against the whole industry is all the greater because it was sold by Merck.

One example came during the Food & Drug Law Institute advertising & promotion conference September 8, when Ann Witt, a former FDA ad division head who is now an advisor to Congressman Henry Waxman, discussed Waxman's opposition to a proposed guidance that would allow companies to disseminate peer-reviewed journal articles on off-label uses:

"There are many many examples, and unfortunately there are more coming to light every day, of company-manipulated data that ends up in peer reviewed reports. I’m sure we’ve all followed the somewhat distressing trail of evidence that is coming out about how Vioxx was promoted. There have now been at least four or five separate articles on the different methods that Merck used to manipulate study results."

"I--who have spent probably 20 years following drug advertising and thought I was pretty cynical about it--I found the stories about Merck personally extremely depressing. I would imagine many of you do. "

"I, like many people at FDA, always thought of Merck as sort of the gold standard in the industry, and to find that this kind of really irresponsible marketing and distortion of the scientific record was so pervasive there is truly troubling."

"I would hope that it would lead all of us to question whether substituting peer review, for FDA review and approval, is really a good way for doctors to learn about new uses of drugs."

In other words, if Merck does it, then everybody must do it.

And consider the context: Witt is citing allegations against Merck to block a guidance on off-label journal reprint distribution. That is an issue that is of far less significance to Merck than to dozens of other companies with more prominent positions in oncology, pain or other markets where off-label uses are essentially standard practice.

That is how it works. Companies that never marketed a COX-2 inhibitor have to live with mandatory post-marketing studies and Risk Evaluation & Mitigation Strategies. They may also have to live with a whole host of new marketing restrictions—whether enacted by Congress or simply created by more aggressive enforcement at FDA.

Finding Common Ground on Off-Label Promotion

There were plenty of highlights at the FDA/CMS Summit last week. Our colleague Roger Longman already shared his, singling out shrinking violet Steve Nissen and the decidedly less sexy, but critically important, discussions about reimbursement and drug development.

For anyone worried about the boundaries between scientific exchange and off-label promotion, though, the highlight had to be the discussion between First Assistant US Attorney Michael Loucks and former FDA Chief Counsel Dan Troy (now with Sidley Austin, LLP). And since virtually every pharmaceutical and biotech company with products on the market is under investigation somewhere, shouldn’t everyone be worried about that topic?

On paper, the face off promised plenty of fireworks. Troy has been a passionate advocate of First Amendment rights throughout his career, and maintains that the recent climate of prosecution of marketing practices is chilling scientific exchange. Loucks’ Boston office has spearheaded most of the biggest investigations in the area.

But a remarkable thing happened. Instead of a shouting match, there ensued a lively discussion of the policy issues underlying off-label promotion cases—and several points of agreement that could serve as a basis for moving the debate forward.

The first point of agreement was one of philosophy. Troy was the first political appointee at FDA in the Bush Administration, so you know where he is coming from . But here is something you may not have known about Michael Loucks: “I am, believe it or not, a conservative Republican,” he said.

“I think the government ought to be, consistent with the rules, out of people’s pocket books and lives,” Loucks said. “However, if you have a set of rules that requires taking certain actions when you market a product, that set of rules has to be applied equally across the board.” Dan Troy couldn’t have put it better himself.

The more important points of agreement, though, came in discussion of the topics raised by moderator John Bentivoglio (King & Spalding).

Troy has been pushing FDA to issue guidance clarifying permissible forms of scientific exchange, starting with a policy governing dissemination of peer-reviewed medical journal articles that discuss off-label uses. The topic is so controversial that House Oversight & Government Reform Committee Chairman Henry Waxman announced an investigation of the guidance before FDA finished drafting it.

Loucks agrees with Troy that FDA guidance would be useful in this area. He even offered a new idea: having FDA create some form of advisory opinion process, modeled on a program already in place for the HHS Inspector General. Such a system would allow sponsors to ask FDA for clearance before conducting some activity that they worry might expose them to liability for off-label promotion.

Loucks also agreed with Troy’s position that dissemination of truthful, non-misleading scientific information should not be criminalized, even if it is about an off-label use. There has to be “something else” in the case, Loucks said—like an illegal inducement to a doctor, or evidence that the information was false or misleading.

The two also agreed on one other thing: the issues surrounding off-label promotion encompass more than prosecutors and manufacturers. Payors, prescribers and patient groups all have a stake—and strong beliefs—as well.

Look for lots more coverage of the current state of off-label promotion policy in The RPM Report in December.

Evista Update

Lilly's response to my questions about the Evista press release (subject of a July 25 post):

"Following the July 24 meeting of the Oncologic Drugs Advisory Committee (ODAC), Lilly issued a press release containing factual information about the meeting’s outcome pertaining to Lilly’s osteoporosis drug.

'We believe that our actions were consistent with the laws and the consent decree,' said Anne Nobles, Vice President, Compliance and Enterprise Risk Management. 'Lilly takes very seriously our responsibility to abide by all the laws governing our business practices and are committed to ensuring our employees' actions reflect the highest legal and ethical standards of conduct.'"

Lilly’s Evista for Breast Cancer Prevention: Vindication or Provocation?

It looks like Eli Lilly & Co.’s raloxifene Evista is poised for approval for reduction of the risk of breast cancer. A Food & Drug Administration advisory committee voted yesterday to support use of the drug for that use in post-menopausal women at high risk of breast cancer, and—more narrowly—to support use for breast cancer prevention in post-menopausal women with osteoporosis.

The agency itself has until September to make a decision on Lilly’s pending supplemental FDA. But all signs point to an approval that, whatever else it means, will feel like vindication for Lilly.

Just 18 months ago, the company paid $36 million to settle an investigation into its promotion of Evista. The drug has been approved for use in osteoporosis for a decade. But in 2005 Lilly pled guilty to a criminal misdemeanor charge that it promoted the drug for breast cancer prevention and cardiovascular risk reduction. The conduct involved occurred in 1998; the company simultaneously settled related civil claims dealing with conduct that continued into 2000, but Lilly did not admit guilt.

In addition to paying the fine, Lilly entered into a consent decree prohibiting it from promoting Evista for breast cancer prevention without formal FDA approval.

Not that you would know that from reading Lilly’s press release announcing the advisory committee vote. Underneath a headline announcing the advisory committee vote, Lilly includes what starts out sounding like a disclaimer but ends up sounding like a claim of effectiveness for the new use: “EVISTA is currently indicated for the prevention and treatment of osteoporosis and may provide an important option for postmenopausal women at increased risk for breast cancer.”

Now that sentence is surely unobjectionable on its face. But it definitely counts as bold talk from a company that just signed a court order saying it is “permanently enjoined from directly or indirectly promoting Evista for use in preventing or reducing the risk of breast cancer…unless and until it is authorized to do so by the FDA by the approval of a supplement to the New Drug Application for Evista.”

Especially when you consider that the DoJ investigation included, among other allegations, claims that Lilly promoted the off-label use through its press releases about Evista. (Read the Justice Department’s summary of Lilly’s conduct here.)

Of course, the consent decree includes other provisions, notably one stating that “nothing in this Decree shall be construed to limit or expand the rights of Eli Lilly under the First Amendment of the Constitution.”

When it comes to off-label promotion, that is precisely the question: what are the rights of drug companies like Eli Lilly under the Constitution? Free speech advocates argue that companies have the right to engage in scientific discourse about their products, even if they are talking about uses not approved by FDA. After all, if raloxifene works to prevent breast cancer, millions of women would benefit from knowing that as soon as possible.

Prosecutors see it differently: the FD&C Act prohibits promotion of unapproved uses of drugs, and they have gone after many companies for promoting their drugs beyond the label. There have been several recent settlements (with the Evista case one of the first) in which manufacturers have accepted that premise—explicitly or implicitly—rather than fight the charges in court.

In our next issue, The RPM Report will be taking an in-depth look at the current state of uncertainty in industry after the recent wave of settlements.

As the advisory committee vote indicates, Lilly’s statement that Evista “may be an important option for post-menopausal women at increased risk for breast cancer” is undeniably true. But it was undeniably true a decade ago too. And that didn't keep Lilly out of trouble.

Now, here’s a thought: Johnson & Johnson made headlines recently when it offered a money back guarantee to the UK National Health Service on its cancer therapy Velcade, promising to pay back the government if the therapy doesn’t prove cost effective.

Maybe Eli Lilly & Co. should take a page from that playbook. But instead of offering a refund to the US government, maybe Lilly should ask for its money back from the Department of Justice. Justice.