Over the past fiscal year, the US Justice Department recovered nearly $2.2 billion under the False Claims Act against the pharmaceutical industry for fraud against federal healthcare programs, notably Medicaid and Medicare. In doing so, the feds say drugmakers relied on various forms of illegal promotion or pricing to bolster prescriptions and profits (back story).

To establish marketing fraud, the feds typically examine a sequence of events that involves a drugmaker inducing a doctor to prescribe a drug on an off-label basis. Doctors are free to do so, of course, but drugmakers are not supposed to promote their meds for used not approved by the FDA. Meanwhile, a prescription will later get filled by a pharmacy, ultimately, resulting in a false claim.

Rarely, though, do the feds ever consider pursuing a False Claims Act against physicians. The line of reasoning is simply that individual doctors - or pharmacists, for that matter - are generally not worth the effort in terms of needed resources and potential returns. But one attorney has been waging a court battle in hopes of reducing off-label prescriptions of antipsychotics to children who are on Medicaid.

The issue has been contentious for several years, especially before several drugmakers won FDA approval to market their antipsychotics to increasingly younger children. There is still controversy. A recent US Government Accountability Office report found that foster children - including some as young as one year old - are inappropriately prescribed psychotropics (see here).

And so Jim Gottstein, an attorney who heads an organization called PsychRights, the Law Project of Psychiatric Rights, is pressing a whistleblower lawsuit filed against numerous physicians, clinics and pharmacies that are accused of perpetrating false claims against government healthcare programs (here is the lawsuit). So far, though, he has had little luck; the case was recently dismissed and he is seeking a rehearing (see here).

In his view, the feds should be enforcing Medicaid coverage restrictions of outpatient drugs to those that are for a medically accepted indication, which he believes would greatly reduce off-label prescribing. A medically accepted indication refers to either a drug approved by the FDA or listed in one of three recognized compendia.

However, Gottstein claims the US Center for Medicare & Medicaid Services is not interpreting this in a way that would prevent state programs from reimbursing for off-label prescribing. He cites an exchange of letters four years ago between an assistant attorney general in Utah and CMS officials discussing clarification of covered outpatient drugs and medically accepted indications. The Utah officials maintained covered outpatient drugs do not include those without medically accepted indications. Utah had begun filing lawsuits against drugmakers over false claims at the time (look here).

The CMS officials wrote back that the Social Security Act “does not provide definitive policy on the coverage of Medicaid drugs for the uses you describe in your letter, nor have we addressed this issue in implementing Federal regulations.” We asked CMS if Medicaid coverage of outpatient drugs are prohibited for any use that is not a medically accepted indication, but never received a reply.

In pressing his case, Gottstein believes the feds should be using the law in a way that would make it possible to crack down on inappropriate prescribing by doctors, which he believes would make it harder still for drugmakers to successfully induce physicians to write off-label prescriptions.

“The most straightforward approach to solving the problem of the inappropriate off-label administration of psychotropic drugs to children and youth in foster care is to enforce Medicaid’s outpatient drug restriction to medically accepted indications,” says Gottstein who, by the way, was one of three people named as conspirators in the infamous Zyprexa document scandal four years ago (see this).

Of course, taking this approach would require the feds to commit resources that may not yield significant returns; consider the possible settlements compared with those paid by drugmakers. And while a message may be convincingly sent to the medical community, pursuing individual physicians would raise a host of thorny legal arguments, because doctors do have the write to prescribe off-label. But what do you think? Is this a line of pursuit worth considering?

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