Question: What risk management precautions should a firm take if significant sales are derived from off-label use of its drug or device?
Answer: Promoting medical devices and drugs for uses that have not been approved by the Food and Drug Administration (FDA) constitutes off-label promotion, which is forbidden by the Federal Food, Drug and Cosmetic Act (FDCA). Companies that promote off-label face severe criminal and civil penalties. In recent years, off-label promotion has been the subject of countless Warning Letters, cost the industry billions in fines, led to jail time for company executives, resulted in Corporate Integrity Agreements and Deferred Prosecution Agreements, and triggered costly products liability lawsuits. Yet, even so, many medical device and drug companies continue to profit significantly from the off-label uses of their products.
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