Cell Therapeutics says it "likely" promoted drug for unapproved uses
By Luke Timmerman
Seattle Times business reporter
In the small print of its latest quarterly report with the Securities and Exchange Commission, Cell Therapeutics has made a disclosure that corporate lawyers say they have not seen before — that in some cases the company has likely crossed the line in marketing its cancer drug for unapproved uses.
The disclosure could focus new scrutiny on the company's practices surrounding its sole marketed drug, Trisenox, which is approved by the Food and Drug Administration only for treating a rare type of leukemia that affects 400 U.S. patients a year.
Cell Therapeutics said in recent filings that it believes most sales of the drug stem from uses that have not been FDA-approved. It is legal and ordinary for doctors to prescribe Trisenox for other uses, and companies are allowed to make doctors aware of such uses.
But the practice treads into troubling territory if the company itself promotes the drug for those unapproved "off-label" uses — and that's what the company seems to be acknowledging it may have done.
"Some of our practices intended to make physicians aware of off-label uses of Trisenox, without engaging in off-label promotion, could nevertheless be construed as off-label promotion and it is likely that some instances of off-label promotion occurred in the past," say the company's recent SEC filings.
"Promotion by us of such off-label uses would be unlawful," the company also noted.
Leah Grant, the company's director of investor relations, would not say what specifically caused the company to add the disclosure to its SEC filings beginning mid-July. Grant did say, however, the company has not received any warnings from the FDA about its promotional practices.
She said she was not aware of any disciplinary action taken against salespeople relating to off-label promotion.
A spokeswoman for the Food and Drug Administration, in step with agency policy, would not say whether it is conducting an investigation into the company's practices. Every publicly traded company mentions lots of potential risks in its SEC filings, to shield itself from shareholder lawsuits in case things go wrong. But Stephen Graham, chair of global corporate law for Orrick, Herrington & Sutcliffe, who does not represent Cell Therapeutics, said that in 20 years of writing such documents for biotech companies, he has not seen a similar disclosure.
After reading the language of the disclosure, he said it could be considered a red flag because "you don't drop things into [the SEC filing] that aren't relevant. For some reason, someone at the company is concerned about it, that it could be relevant."
The financial success of Trisenox has always depended on creating off-label sales. It costs about $20,000 per patient, and since about 400 U.S. patients have the disease it was approved for, the drug has a maximum potential of about $8 million in sales.
The company's stated sales goal to Wall Street this year is far higher: $32 million to $40 million in Trisenox sales. Cell Therapeutics has been under pressure to meet that range because it is running deep in the red, and it has fallen short on sales goals in the past.
To create more demand for Trisenox, the company has done preliminary studies of the drug in more-prevalent blood cancers, such as multiple myeloma and myelodysplasia. Cell Therapeutics is attempting to make doctors aware of Trisenox's potential benefits in those diseases through medical-education seminars, without crossing the line into improper promotion such as placing ads in medical journals, or having sales reps talk to doctors about the uses.
John Mack, publisher of Pharma Marketing News in Newtown, Pa., said companies can walk a "fine line" by doing things that are considered "medical education" about a drug, but that aren't overtly promotional.
For instance, a company can pay for promotional articles to be written by a contract medical writer, then submitted for publication in journals under a credible doctor's name. It can issue a press release touting new findings that attract media attention. It can sponsor a patient advocacy organization, which can then speak freely on its Web site or in fliers about whether patients should consider different treatments. "It's really a valid method to widen the market for your product, if you can do it, but you really have to be careful about pushing the envelope into marketing," Mack said.
Cell Therapeutics' Grant said salespeople can't talk freely about off-label uses, but if a doctor asks them about additional uses of a drug, the salesperson can refer him or her to educational materials.
She said the company makes doctors aware of Trisenox's other uses by sponsoring a third-party vendor to arrange continuing-medical-education seminars they attend to stay informed. However, the company cannot dictate what is said at such medical-education programs, Grant said.
The practice of prescribing drugs "off-label" has become so common that, according to an analysis by Knight Ridder Newspapers, about 115 million prescriptions of the country's top-selling drugs were written for unapproved uses last year. Some unapproved uses have become standard — the hit cancer drug Rituxan is largely prescribed off-label for a broader group of patients with non-Hodgkin's lymphoma than are included in its approved label.
The FDA has tried to limit companies from spreading information about unapproved uses, but companies have won some court cases by saying they have a right to free speech.
But some companies have been hit with warning letters or fines for off-label promotion. Intermune, a small California biotech company, has been caught in a particularly nasty case, in which a former saleswoman has sued the company for wrongfully firing her when she refused to participate in an off-label promotional effort.
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