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Arnold&porteradvisory-fdalillyconsentdecree(0106).indd

JANUARY 2006
Off-Label Promotion Leads to Criminal Plea,
Consent Decree of Permanent Injunction,
Washington, DC
Disgorgement of Profit
United States v. Eli Lil y and Company
The Food and Drug Administration (FDA) has just concluded a significant enforcement action involving al eged off-label promotion of a prescription drug. Brussels
On December 21, 2005, the Department of Justice and Eli Lil y and Company (Lil y) announced agreements to resolve an investigation into the marketing and Los Angeles
promotion of Evista® (raloxifene hydrochloride).1 Lil y agreed to a criminal fine of $6 mil ion, a civil disgorgement of $24 mil ion, and forfeiture of another $6 mil ion San Francisco
to the government, together with a consent decree of permanent injunction. The government al eged that Lil y had promoted Evista, a drug approved only for the Northern Virginia
prevention and treatment of osteoporosis, for other uses, including the prevention and reduction in risk of breast cancer and the reduction of risk of cardiovascular disease.2 The actions taken, and the government’s legal rationale, offer several important lessons for pharmaceutical and medical device companies.
FDA CAN ARGUABLY AVOID FIRST AMENDMENT ISSUES
WHILE ACTING AGAINST OFF-LABEL PROMOTION BY USING
TRADITIONAL LEGAL THEORIES REGARDING “INTENDED USE”
Lil y was charged with intending that Evista be used for indications that were
not approved and for which there were no adequate directions for use in the
labeling. The government did not al ege that any of the materials disseminated
or supported by Lil y were false or misleading. Thus, the prosecution’s rationale
sought to avoid First Amendment issues: instead of arguing that Lil y’s speech was
violative by itself, the government focused on the consequences of the speech
This summary is intended to be a general (i.e., the creation of new intended uses for Evista). In this regard, FDA’s approach is analogous to other areas where speech can have legal consequences despite constitute legal advice. You should consult with competent counsel to determine First Amendment protections (e.g., damages for libel, breach of confidentiality applicable legal requirements in a specific agreements; criminal sanctions for hate crimes). FDA’s position in the WLF case. al eged activities to establish that the FDA CAN SEEK
“DISGORGEMENT” FOR ALL
PROFITS DERIVED FROM
“OFF-LABEL” MARKETING.
the “intended use” in order not to be court orders for restitution to consumers al egedly il egal importation of drugs.8  Briefings for securities analysts on “safe harbors” that would ensure that company of so-cal ed “il -gotten gains” or “unjust enrichment” in the context of “intended use.” On this basis, the detailed explanation of the basis for the CONCLUSION
Integrity Agreements (“CIA”) between FDA CAN REQUIRE A
RIGOROUS LONG-TERM
CORPORATE COMPLIANCE
PROGRAM, SIMILAR TO,
BUT WITH IMPORTANT
DISTINCTIONS FROM, OFFICE
OF INSPECTOR GENERAL
CORPORATE INTEGRITY
AGREEMENTS.
the rules against fraud and abuse in the Medicare and Medicaid programs, arguably to strip al profits derived from regarding exclusion. Presumably, FDA could refer a breach to the OIG  C o m p l i a n c e O f f i c e r a n d ENDNOTES
Arnold & Porter LLP has one of the nation’s leading pharmaceutical and medical device regulatory practices, including expertise on marketing and promotion in the complex environment criminal information and civil complaint, created by FDA law; laws against fraud which (together with the plea agreement, and abuse; the False Claims Act; and state laws and regulations. If you would like more information, please feel free risk of breast cancer in 1999. Zeneca Dara Corrigan
Inc. and Barr Laboratories, Inc. v. Eli Lilly and Company, 1999 WL 509471 (S.D.N.Y. Daniel Kracov
Arthur Levine
Washington Legal Found. v. Henney, 202 U.S. v. Universal Mgmt. Servs., Inc., 191 Gregory Levine
F.3d 750 (6th Cir. 1999); U.S. v. Lane Labs- USA, Inc., 427 F.3d 219 (3d Cir. 2005).
U.S. v. Rx Depot, Inc. et al., appeal William Vodra
10 Plea Agreement, para. 4(h).
11 Id. (especially 9-16 and 29).
12 See, for example, CIA between OIG and

Source: http://www.hrice.com/resources/documents/Arnold&PorterAdvisory-FDALillyConsentDecree(0106).pdf