Intense patient demand for semaglutide, branded as Ozempic, Wegovy and Rybelsus, ignited by “viral” Tik Tok posts, has put providers at risk for off-label and prior authorization scrutiny.

Complex laws concerning “off-label” drug and durable medical equipment (DME) use have resulted in confusion among health care providers (HCPs). Criminal prosecutions of Insys and its top executives relating to Subsys, an oral fentanyl spray, have fueled additional questions around what is permissible and what is not.

This article simplifies the law applicable to different classes of professionals and provides practical guidance and principles that HCPs can apply to evaluate off-label exposure.

What Does “Off-Label” Mean?

Off-label can be described broadly as any use of a drug or device that “differs” from the use described in the label or from the patient conditions described in the label. In other words, the term off-label drug use (OLDU) refers to the use of an approved drug for any purpose, or in any manner, other than that described on the label.

This includes, for example, the use of the drug for a disease or medical condition that it is not approved to treat, such as when a chemotherapy is approved to treat one type of cancer, but HCPs use it to treat a different type of cancer.

Off-label includes the administration of a drug in a different way, such as when a drug is approved as a capsule, but is given instead in an oral solution.

Off-label also contemplates a drug being given at a different dose, such as when a drug is approved at a dose of one tablet every day, but HCPs prescribe it twice daily.

Finally, off-label also contemplates uses that are contraindicated by the label.

Off-Label Laws Applicable to Manufacturers

Manufacturers are prohibited by the Food, Drug, and Cosmetic Act (FDCA) from promoting off-label uses of drugs and devices. Sections 502 and 510 of the FDCA deem a drug “misbranded” if it is marketed for off-label uses, and Section 331 of the FDCA prohibits the marketing and promotion of a Class III device for an unapproved use.

Nonetheless, manufacturers are permitted to respond to unsolicited questions from HCPs regarding off-label use and to distribute peer-reviewed publications regarding off-label use. Similarly, a manufacturer is not liable merely because it sells a device with knowledge that a provider intends to use the product off-label.

Despite these prohibitions, off-label marketing by drug companies is, by some accounts, rampant, and federal regulators routinely obtain headline-grabbing penalties and enforcement sanctions in this arena.

To this end, the Centers for Medicare and Medicaid Services (CMS) publicizes a number of different mechanisms that can be used to report off-label promotion, including an FDA hotline, State Medicaid agency and Medicaid Fraud Control Unit (MFCU) contact information, and U.S. Department of Health and Human Services, Office of Inspector General (HHS), tip hotline and email.

Off-Label Laws Applicable to Physicians & Pharmacists

In contrast to the law applicable to manufacturers, there is no question that, once a drug or device is approved by the FDA for one purpose, physicians may prescribe it for any purpose. In fact, the U.S. Supreme Court has expressly acknowledged that off-label use by medical professionals is not merely legitimate, but important in the practice of medicine.

Put differently, off-label use is generally accepted, and once a drug product has been approved for marketing, a physician may prescribe it for uses or in treatment regimes of patient populations that are not included in approved labeling. In short, the prescription of drugs for unapproved uses is commonplace in modern medical practice and ubiquitous in certain specialties.

Finally, Section 396 of the FDCA expressly authorizes off-label use: “Nothing in this chapter shall be construed to limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient for any condition or disease within a legitimate health care practitioner-patient relationship.”

Because physicians lawfully may prescribe off-label, there also is no question that pharmacies lawfully may fill the orders they receive. In fact, whether a treatment is on- or off-label often is not known to a pharmacist at the time of dispensing, and diagnosis information is not required to be included in any of the 37 NCPDP data fields that are included in the Prescription Drug Event (PDE) record.

The PDE record contains prescription drug cost and payment data that enables CMS to make payment to plans and otherwise administer the Part D benefit, but CMS lacks the statutory authority to require physicians to include diagnosis information on prescriptions, which are generally governed by state law.

In short, diagnosis information is not a required data element on pharmacy billing transactions nor is it generally included on prescriptions. As such, this information is not readily available to dispensing pharmacists.

Federal Program Reimbursement of Off-Label

Although the law is clear with respect to HCP’s ability to prescribe and dispense off-label, confusion arises with respect to the reimbursement of such uses. Of course, when over-the-counter (OTC) drugs, such as baby aspirin, are recommended for off-label uses, the federal government’s payment methodology is irrelevant.

On the other hand, when federal programs are the payor, it is critically important for HCPs to understand the extent to which off-label claims are reimbursable. Although the federal programs do not impose an absolute ban on coverage for off-label use of drugs and devices, there are a number of limitations under the law that affect the degree to which an off-label use will be reimbursed.

First, reimbursement of off-label is straightforward whenever the use is consistent with standards of care. CMS’s Medicare Benefit Policy Manual expressly provides: “FDA approved drugs used for indications other than what is indicated on the official label may be covered under Medicare if the [government contractor] determines the use to be medically accepted, taking into consideration the major drug compendia, authoritative medical literature and/or accepted standards of medical practice.” CMS’s Manual further provides that “[d]eterminations as to whether medication is reasonable and necessary for an individual patient should be made on the same basis as all other such determinations (i.e., with the advice of medical consultants and with reference to accepted standards of medical practice and the medical circumstances of the individual case.”).

Second, off-label uses are eligible for reimbursement if the use has been recognized in compendia, including the American Hospital Formulary Service Drug Information (AHFS-DI), United States Pharmacopeia Drug Information (USP-DI), DRUGDEX Information System, Facts & Comparisons, National Comprehensive Cancer Network Drugs and Biologics Compendium (NCCN), and Clinical Pharmacology. These compendia use various criteria for the conditions under which a non-FDA approved indication would be included, including a judgment by editorial staff regarding the quality and quantity of evidence, and the magnitude of benefit versus harms. In addition, a high degree of interest or evidence of use in practice also is considered in deciding whether to include an off-label listing.

Third, federal programs may reimburse off-label uses where authorized. In particular, rather than deny coverage for off-label uses altogether, CMS encourages Part D sponsors to utilize prior authorization, a form of utilization management, for those drugs with the highest likelihood of non-Part D covered uses, including a high likelihood of use for non-medically accepted indications. For example, the FDA recognized that off-label uses of Transmucosal Immediate Release Fentanyl (TIRF) drugs in non-cancer pain had exceeded on-label uses, but went on to approve Subsys in 2012 because “having another option that is different in formulation, in this case a sublingual spray, is helpful to patients.” In contrast, payors often denied coverage for the use of TIRF medicines beyond break-through cancer pain due to the high cost of these medicines. This conflict erupted in the case of Insys, leading to the criminal conviction of employees who falsified prior authorization information.

Practical Guidance and Take-Aways

There are a number of practical pointers that HCPs should consider when evaluating off-label risk. First and foremost—and this is true across the board—anytime a government program is implicated, risks are increased. Simply put, government regulators focus primarily on fraud, waste and abuse associated with government programs because they are employed by the government. In addition, data regarding government claims is readily available, whereas private plan data is more disbursed.

Second, speaker programs increase risks for manufacturers and HCPs. Speaker programs are entirely legitimate and appropriate. Nonetheless, Insys’s off-label promotion of Subsys has resulted in significant reforms and increased enforcement attention around these educational opportunities. In addition, the law in this area is not only developing, it is extremely broad: if speaker program remuneration is one reason behind a physician’s decision to prescribe a particular product, that physician may be criminally prosecuted for violations of the Anti-Kickback Statute even if the therapy was medically necessary or the physician had other reasons for his or her order.

Third, prior authorization requirements increase risk. According to most plans, medications used for the purposes of weight loss are typically excluded from benefit coverage. For example, according to United Healthcare’s coverage criteria, semaglutide is covered if the patient has a diagnosis of type 2 diabetes and the use is not intended solely for the purpose of weight loss. Other plans may require step therapy with Metformin. Despite these requirements, off-label prescribing of semaglutide for weight loss in patients without diabetes remains widespread, as we have written about here.

In conclusion, off-label prescribing and dispensing benefits medical science and patients, but often becomes the focus of government and payor scrutiny when costs are significant. In the case of semaglutide, pharmacies have moved to cash-pay and compounding models to limit these risks and meet patient demand, but unwittingly may have exposed themselves to other risks. That is because compounding pharmacies may only compound drug products using bulk drug substances that comply with FDA guidelines, and semaglutide sodium salt is not regulated, monitored or tested by the FDA. In short, the tensions described in this article are inherent in off-label prescribing and dispensing no matter the therapy at issue, and routinely lead to significant enforcement actions against providers.

HLA Specializes in the Defense of Off-Label Prescribing & Dispensing

At Health Law Alliance, our healthcare defense attorneys have successfully defended businesses and individuals in off-label prescribing and dispensing cases across the country. There are a number of ways in which clients can reduce their exposure for off-label prescribing or dispensing. Our firm’s mission is simple: use unmatched experience and insight to defend our clients against insurance conglomerates, the federal government, and state agencies. We used to work for them. Now let us fight for you. Contact us today for a consultation. We can help.