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DOJ Now Requires Certain Factors Be Met Before Pursuing Off-Label Cases

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Over the years, the Department of Justice has vigorously pursued off-label sales of pharmaceuticals by some of the largest pharma companies in the world. By statute, pharma companies cannot market a product “off-label,” while a physician may prescribe off-label, if he or she believes a particular medicine is effective. This rule created a tension between pharma and physicians.

A number of large off-label cases were settled by the Department of Justice over the years. Hodgson Russ represented two of five relators in the Risperdal off-label case against Janssen, a wholly-owned subsidiary of Johnson & Johnson. Janssen was selling Risperdal off-label for the treatment of dementia in the elderly and for disruptive children. Both of these off-label applications were proven to be unsafe and had side effects associated with them. The case settled for $2.3 billion in FCA damages and another $1 billion in fines and restitution.

Post-Risperdal, the law changed with the Supreme Court’s decision in Escobar. Escobar imposes a “materiality” requirement in FCA cases. In simple terms, that means a relator must show that, had the government known about the falsity of the claim, it would not have paid it. Translated to off-label cases, the Department of Justice now requires some “plus” factors before it will pursue an off-label case. Generally, this means that relators must show patient harm as a result of the off-label sales. This can include actual side effects, undisclosed studies, patient jeopardy, etc.

As a result, off-label cases have become more difficult to bring. Nonetheless, the Department of Justice eagerly embraces cases involving off-label offenses when, as a result, there is the potential or actual harm to patients.

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Hodgson Russ is one of only a few major law firms that represents both whistleblowers and companies accused by whistleblowers of wrongdoing. This unusual perspective means we are exceptionally well positioned to advise whistleblowers about potential claims.

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