Off-Label Marketing Puts Novartis in Hot Water

(CN) - Novartis Pharmaceuticals must face claims that it promoted the use on infants of a drug that U.S. regulators have deemed harmful, a federal judge ruled.

While working as a senior sales consultant for Basel, Switzerland-based Novartis in its dermatology and respiratory division, from 2001 through 2006, Donald Galmines marketed and sold the atopic dermatitis drug, Elidel.

The Food and Drug Administration had authorized the marketing of Elidel as a second-line treatment for patients aged 2 and older after it found that the drug posed safety risks to infants in December 2000.

Though regulators refused to approve the drug for patients older than 3 months of age, Galmines said Novartis soon began marketing Elidel as safe for children under the age of 2 and as a first-line treatment.

This marketing allegedly continued even after the FDA revealed in 2005 that the drug increased the risk of cancer in animals and respiratory infections in children younger than 2.

Galmines said Novartis trained him and paid Dr. Lawrence Eichenfield, a pediatric dermatologist, to convince doctors that Elidel was safe for infants.

The drugmaker also allegedly funded and publicly touted Dr. Alexander Kapp's report that Elidel was safe for children over 3 months old.

Galmines said Novartis created visual aids for him and other sales reps to engage in off-label marketing of the drug and had him host and pay for $1,000 dinners for doctors who prescribed high amounts of Elidel for chronic use. Novartis also allegedly had Galmines use "preceptorships" in which he followed a doctor for a few hours and paid him or her for prescribing the drug.

A federal judge unsealed the 2006 whistle-blower complaint Galmines filed against Novartis under the False Claims Act (FCA) in Philadelphia after the government declined to intervene.

Novartis responded with a 295-page motion to dismiss in May 2011, but U.S. District Judge Gene Pratter preserved some claims on Thursday.

"The first amended complaint plausibly suggests that at least some of the claims submitted to government healthcare programs for Elidel prescriptions were not reimbursable, because it also alleges that these programs do not pay for drugs that are 'not prescribed for a medically accepted indication,' and that at least 1.2 million Elidel prescriptions were written off-label in a manner that put the health of the children receiving those prescriptions at risk," Pratter wrote. "Therefore, Mr. Galmines has sufficiently pled that false claims for Elidel prescription reimbursements were submitted to the government."

Though another pair of former Novartis employees, Gina Moyer and Judith Shelton, also brought a 2005 qui tam action over Elidel in Michigan, the court found that the first-to-file rule bars only Galmines' claims of kickbacks. He can still pursue claims over off-label-marketing because the Moyer complaint discusses the allegedly unlawful promotion of Elidel for psoriasis and seborrhea, and Galmines "makes almost no allegations about these diseases."

"Mr. Galmines has injected precision into his off-label marketing allegations by pleading a myriad of details about how such marketing occurred," Pratter wrote. "The first amended complaint details with specificity how Novartis trained its personnel to engage in off-label marketing, how it equipped those personnel with reports and visual aids to support such marketing, how it used medical experts to promote the off-label use of Elidel, and how Mr. Galmines was reprimanded when he declined to market Elidel for such uses. These allegations, together with the first amended complaint's allegation that at least 1,218,000 off-label prescriptions were written for Elidel, 'are sufficiently specific both to inform [Novartis] of the "precise misconduct" charged, and to make it unlikely that [Mr. Galmines] has commenced this action in bad faith.' Therefore, the court will not dismiss the first amended complaint under Rule 9(b)."

Novartis reported nearly $56.7 billion in net sales for 2012.

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