For the first time, a qui tam settlement has topped the $1 billion mark. Late last week, Eli Lilly announced that it had agreed to pay a total of $1.4 billion to the United States and to a collection of participating state governments for off-label marketing violations and other violations related to the drug Zyprexa.
Before going any further, a few words about pharmaceutical fraud and off-label marketing will be helpful. Off-label use of a drug occurs whenever the drug is prescribed by a doctor to treat a condition or illness other than the condition or illness for which it is approved by the United States Food and Drug Administration.
When a physician writes a prescription for a drug to treat a condition other than the one for which the drug is approved by the FDA, that is known as an “off-label” prescription. Physicians prescribe drugs for off-label purposes all the time–it is considered well within the discretion of the treating physician.
For Medicare or Medicaid patients, however, it is a different story. Both programs refuse to pay for any drug that is prescribed for an off-label purpose (i.e., any purpose other than one approved by the FDA.)
The states recovering money include Washington state, which will receive $7 million, Texas, which will receive $30 million; Michigan, which will receive $26.4 million, and others. No word yet on Virginia’s share.