Risk Evaluation Mitigation Strategies Spark False Claims Act Liability with Huge Impact

September 2017 marked the announcement of two multi-million dollar civil settlements against drug makers partially stemming from the respective companies’ failure to comply with their promulgated Risk Evaluation Mitigation Strategies (REMS) which was a condition precedent for the Food and Drug Administration’s (FDA) approval or their respective New Drug Applications. These settlements are noteworthy to any company with a drug subject to a REMS as well as to the pharmacies who dispense them as failure to adhere to REMS requirements subjects pharmacies to potential insurance recoupment actions and regulatory action and penalties by the Boards of Pharmacy and/or the FDA.

Under the Food and Drug Administration Amendments Act (FDAAA), Congress granted FDA authority to require a REMS as part of the approval of a new product, or for an approved product when new safety information arises, to manage a known or potential serious risk associated with a drug. The REMS program is well-known to impose stringent requirements on manufacturers to ensure that the benefits of a drug or biological product outweigh its risks. The FDAAA amended the Food Drug Cosmetics Act (FDCA) such that a drug is deemed to be misbranded for a failure to comply with the REMS requirements.

On September 5, 2017 the Department of Justice (DOJ) agreed to a $58 million civil settlement by Novo Nordisk to settle a matter that involved two components which include a violation to the FDC Act for misbranding and claims for liability under the False Claims Act. The FDC Act misbranding violation resulted in disgorgement of $12.15 million under FDA’s equitable authorities and was grounded upon allegations that Novo Nordisk representatives failed to comply with the REMS by giving information that the FDA-required regarding Victoza, a drug approved in 2010 to treat Type II diabetes, regarding its risk of causing Medullary Thyroid Carcinoma (MTC). Additionally, after FDA modified the REMS in 2011 to increase awareness of the risk, Novo Nordisk allegedly failed to comply with the REMS modification and tried to obscure the risk of MTC. The second component of the civil settlement involved a payment of $46.5 million to resolve False Claims Act liability, which arose from seven lawsuits filed by private parties against Novo Nordisk, resolving allegations that the sales force created a false or misleading impression about the risk of MTC and promoted the off-label use of Victoza for patients who did not have Type II diabetes.

Then on September 22, 2017 Aegerion Pharmaceuticals Inc., a Cambridge, Massachusetts-based subsidiary of Novelion Therapeutics Inc., agreed to plead guilty to charges relating to its prescription drug, Juxtapid and agreed to pay more than $35 million to resolve criminal liability under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and to allegations that it caused false claims to be submitted to federal health care programs for Juxtapid. Additionally, Aegerion agreed to plead guilty to misbranding charges under the FDCA and is required pay a criminal fine and forfeiture of $7.2 million and enter into a civil consent decree of permanent injunction aimed at preventing future violations of the FDCA. As charged, Aegerion introduced Juxtapid into interstate commerce that was misbranded because, among other things, Aegerion failed to comply with a REMS. Juxtapid was approved by the FDA to treat patients with homozygous familial hypercholesterolemia (HoFH), a rare disorder, causing abnormally high levels of circulating LDL-C. The Juxtapid label carried a black box warning that Juxtapid may cause liver toxicity, and also warned that it may cause gastrointestinal adverse reactions. FDA required a REMS, as part of Juxtapid’s approval with the purpose to educate prescribers about the risks of liver toxicity and to restrict access to Juxtapid only to those patients with a clinical or laboratory diagnosis consistent with HoFH. The complaint alleges that during the relevant time period, from December 2012 to December 2015, Aegerion failed to give health care providers complete and accurate information about HoFH and how to properly diagnose it, and that Aegerion also filed a misleading REMS assessment report. Due these circumstances, Aegerion failed to comply with the required elements under the REMS to assure safe use of Juxtapid, in violation of the FDCA. The complaint further alleges that Aegerion management and sales personnel distributed Juxtapid not only for the treatment of HoFH, but also as a treatment for high cholesterol generally, without adequate directions for such use. 

In terms of REMS impact on the profession of pharmacy, pharmacies are expected to provide the patient with medication guides at the very least for those medications subject to a REMS, many of which are commonly prescribed drugs. In addition to being required to dispense medications subject to a REMS with an FDA approved medication guide, certain medications possess additional dispensing requirements. While the Trans-mucosal Immediate Release Fentanyl (TIRF) REMS have occupied much of the national news due to the increasing prevalence of the nation’s opioid epidemic, other more common examples, ubiquitous to almost any retail pharmacy exist.

Take for example, the dispensing of Accutane (Isotretinoin). In order to dispense Accutane in compliance with its REMS a pharmacist must become certified and registered and activated in the iPLEDGE Program. To become registered and activated, each pharmacy must identify a “responsible site pharmacist” who completes the Pharmacy Enrollment Form and agrees to do the following before dispensing an isotretinoin prescription: (1) know the risk and severity of fetal injury/birth defects caused by isotretinoin; (2) dispense only FDA-approved isotretinoin products and obtain isotretinoin only from the iPLEDGE Program registered wholesalers; (3) do not sell, borrow, loan, or otherwise transfer isotretinoin in any manner to or from another pharmacy (4) dispense only to qualified patients determined via authorization from the iPLEDGE Program web- or voice-based system for every isotretinoin prescription; (5) document the Risk Management Authorization (RMA) number on each prescription; (6) dispense no more than a 30-day supply (no refills); (7) dispense the isotretinoin Medication Guide with each prescription (8) dispense prior to the “do not dispense to a patient after” date provided by the iPLEDGE Program; and (9) return to the manufacturer (or delegate) any unused product if registration is revoked or if the pharmacy chooses to not reactivate.

This Novo Nordisk and Aegerion settlements represent examples of FDA regulatory violations resulting in False Claims Act liability for a manufacturers. Similarly, pharmacies face this same exposure. Given the complex dispensing paradigm described above which is not limited to Accutane and effects numerous other drugs, pharmacies must avail themselves of these rigorous dispensing requirements, each of which are rife with the potential to result in an improper dispensing, or face similar legal exposure under a FCA theory. If your pharmacy is currently dispensing drugs subject to a REMS, it is imperative that the pharmacy is following best practices when dispensing these medications. Frier Levitt conducts pharmacy operational compliance reviews and structures compliance programs for pharmacies, including policies and procedures related to REMS dispensing. Contact Frier Levitt today to speak to an attorney.