Sensationalist headlines discussing large settlements from cases involving medical device and pharmaceutical companies usually leave the meaningful details out. As a result, the majority of the public is left confused about the legal process and the impact these cases have on physicians, the health care industry, and most importantly, patients.
Fortunately, a recently published book titled, Three Felonies A Day: How the Feds Target the Innocent, written by defense attorney Harvey A. Silvergate, and forwarded by civil liberties attorney Alan M. Dershowitz explains how the government has participated in these “Unhealthy Pursuits of Medical Device and Drug Companies.” In discussing the problems with today’s system, Mr. Silvergate highlights a few cases where the “dictates of the Food, Drug, and Cosmetics Act (FDCA),” unnecessarily harmed doctors, and the patients they served.
The first case discussed involved Lee Leichter, who worked for United States Catheter and Instrument, Inc. (USCI). Mr. Leichter was charged with 392 separate federal felony counts “based on a chain of events involving the testing and sale of medical devices for clearing clogged arteries.”
The heart catheter devices manufactured by USCI, were “Class III” medical devices, meaning that they were the most inherently risky and hence the most heavily regulated. Before marketing Class III medical devices such as USCI’s catheters, a device manufacturer has to submit to the FDA a “pre-market approval” (PMA) application.
If there are any substantial changes, during or after marketing, that affect the safety and effectiveness of the device, the manufacturer is required to obtain approval for such modifications by filing a PMA Supplement. In this way, the FDA can follow a product’s progress through development, and decide whether such changes affect the products approval enough to be pulled off the market for public safety.
The information in the PMA application must assure the FDA that the device is both “safe” and “effective.” By law however, the FDA must recognize that no drug or medical device can be 100 percent safe or always effective. Rather, the agency authorizes a manufacturer to sell a regulated device after weighing several factors:
1) An assessment of the category of patients for whom the device is intended
2) The conditions under which the device will be used and the instructions for use recommended by the manufacturer in the label contained in the packaging; and
3) A weighing of the probable benefits to health from use of the device, against any probable risk of injury or illness from such use.
When weighing such factors in Mr. Leichter’s case, the FDA (in conjunction with the Department of Justice) charged that the company had failed to seek PMA Supplement approval for modifications to the design and manufacture of certain catheters, in response to problems experienced by doctors, before distributing the modified catheters to the market. Such problems, the government argued, needed to be reported even if the problems occurred only when the device was misused.
USCI believed that the company did not need to report such information to the FDA because the problems were caused by the doctors’ misuse of the products, rather than by design or manufacturing flaws in the products. For example, doctors failed to follow instructions of use properly and they failed to properly prepare the device before procedures as required by the instructions.
When the issue of failing to report such problems was brought before the court at trial, the judge used his own unique instructions. He told the jury to decide whether (1) the defendants were guilty of “concealing or failing to report material facts” that should have been reported to the FDA, and (2) whether the company had “knowingly and willfully, with an intent to defraud, failed to submit” required information to the FDA.
Under FDA’s own regulatory language, the jurors “should have judged the statute governing the marketing of medical devices in the context of the risk-reward calculus for all medical devices, rather than absolute terms.” The fact that there were some mishaps and some injuries from use of the product was part of this calculation.
It was the smoke and mirrors produced by prosecutors in the Leichter case that tried to confuse the judge and jury that “safety” meant “freedom from danger or risks,” and “effective” meant “having a definite or desired effect.”
When the case was reviewed by the Federal Court of Appeals for the First Circuit, the court noted this confusion, and asserted that the trial judge failed to explain all of the highly technical regulations adequately. As a result, the Court reversed all of the convictions for Mr. Leichter and the company because “no one could say with any reasonable degree of certainty what their crimes were.” Between 1990, when the jury investigation started, it took eleven years, in 2001, for Mr. Leichter to clear his name.
TAP Pharmaceuticals
The TAP case began when a person inside the company, a “whistleblower,” claimed to have knowledge that the company was “ripping of the government.”
Improper payments—secret or disguised—from pharmaceutical companies to induce a physician, group practice, or hospital to use that manufacturer’s product in lieu of a competitor’s is the most common form of illegal promotion. This practice is particularly harmful when a particular product that is neither more nor less effective than a competing drug, but is significantly more expensive, is illegally promoted.
In charging TAP, prosecutors believed that the companies salesmen were giving free samples to “induce prescribing physicians to order free samples of the prostate cancer drug Lupon instead of its “essentially identical,” cheaper competitor, Zoladex.” In doing so, prosecutors claimed the company hoped to “receive money from Medicare and others for the prescription of that free product.” The government essentially called such free samples bribes, and a form of fraud.
The case also attacked the educational grants given by the drug company and the salesmen “to pay for attendance at seminars and conferences of professional organizations, to purchase medical equipment, to pay for education for the physician’s office staff.”
In the end, federal prosecutors lost on all their claims that TAP’s discounting sales and promotional practices constituted illegal kickbacks and bribes to induce physicians and hospitals to use TAP products.
Swiss drug maker Serono SA
Another concern of federal prosecutors is the prescription of drugs for “off-label” uses, something that a doctor is legally allowed to do, even when a regulatory agency has not approved the drug for that off-label condition. What is illegal however, is when a drug manufacturer or its sales representatives seek to induce physicians to prescribe a pharmaceutical for off-label uses (e.g. bribe).
Prosecutors in the Serono case claimed that company sales reps promoted off-label uses of the drug by “launching a campaign to ‘redefine AIDS wasting’ in order to create a market for Serostim by expanding the disease state for which Serostim could be prescribed as a treatment.”
The claim was problematic because Serostim had already been approved by the FDA for the AIDS wasting syndrome. So the government essentially tried to change the FDA regulation by prosecuting the company, instead of changing the label through FDA administrative procedures.
While the company agreed to pay $740 million fine to settle the charge that it paid kickbacks to physicians to induce them to prescribe Serostim, charges against two former vice presidents of the company were dismissed.
Conclusion
As summarized above, these three cases are just a glimpse into the bystanders whose lives were altered from investigations that “had no evidence that the administration of the company’s drug for off-label uses had in fact harmed anyone,” according to
Instead, these stories give us a look into the billions of dollars health care fraud settlements have obtained. American must ask however, whether such financial gains are worth the impact these cases have on preventing companies from developing and disseminating new therapies.
Many of the devices and drugs created by these companies were on the cutting edge of technology. Although such products and the procedures or treatments associated with them came with some risks to the patient, doctors believe in most cases that using these products—that have been tested and approved—have less severe risks than more invasive options, or doing nothing at all.
Moreover, the investment these companies make into such products are significant, and when patents expire, competitors quickly produce generics that take away much of the rewards such companies took risks for in the first place.
As a result, there should be no question—legal or ethical—if physicians might want to stick with a known formulation by a known and trusted manufacturer, rather than take a chance with an unknown generic manufacture. Such decisions are supposed to be made by medical professionals who have evaluated the comparative merits of the products and who know their patients.
Additionally, there should be no issue with the use of free samples when such a practice is widespread in the pharmaceutical industry and medical profession because it helps doctors become familiar with the drug’s efficacy in their own medical practices, which ultimately leads to better treatment for patients. Equally as important and widespread are educational functions, which keep physicians up to date on new breakthroughs and treatments.
Ultimately, the DOJ’s nonchalant attitude toward “creative” prosecutions based on extensions and interpretations of vague statues and regulations needs to be changed. Physicians rely on their and their colleagues’ judgments and experiences as to the uses, including off-label uses, of pharmaceuticals all the time. “Virtually any physician would admit, perhaps even boast that he relies to a great extent on his own judgment and experience, as well as that of others expressed in medical journals, in deciding what to prescribe for various conditions. The manufacturer’s FDA-approved label is just one source of guidance; experience is another.”
If you have some time this weekend or the coming holidays, you should add this book to your holiday wish list. Also there is a webcast of the author discussing the book on his website www.harveysilverglate.com
Thought this article was very interesting. Found myself agreeing with more than half of the article. Great job!
Posted by: JoAnn B | November 24, 2009 at 12:30 PM
I found your post really interesting and it has really improved my knowledge on the matter.
http://www.youtube.com/watch?v=EyuUyN5RVTI
Posted by: Dharmendra | November 18, 2009 at 06:11 PM