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North To The Future?

By James M. Beck and Mark Herrmann

Without the question mark, that's Alaska's state motto.

With the question mark, it's our title for a post analyzing the on-going trial in State of Alaska v. Eli Lilly and Company.

The State of Alaska is seeking civil penalties from Lilly under the Unfair Trade Practice Consumer Protection Act of at least $1000 for every time a physician in Alaska prescribed Zyprexa.

You read that correctly: The remedy is seemingly unrelated to why the physician prescribed the drug and whether or not the patient's condition improved. No causation; no injury; no nothing. It's at least a thousand bucks (and perhaps as much as $25,000) per script times hundreds of thousands of alleged violations.

You don't have to sit on our side of the "v" to think that's a little heavy-handed.

But wait! It gets worse.

Alaska's unfair trade practices act, like similar acts in many other states, exempts from its coverage transactions regulated under laws administered by an "officer acting under statutory authority of the state or of the United States." AS 45.50.481(1). If, say, the federal FDA regulates the labeling on Zyprexa, then sales of Zyprexa are exempt from regulation under the state trade practices law.

Call us silly (as many of you have), but we were under the distinct impression that the FDA does regulate the labeling on prescription drugs, such as Zyprexa.

Among many other things, the labeling on a prescription drug must be "informative and accurate and neither promotional in tone nor false or misleading in any particular." 21 C.F.R. Sec. 201.56(a)(2). Surely that regulation means that the FDA -- not the state trade practices act -- is meant to regulate the veracity of claims made on the label of a prescription drug.

This just leaves us scratching our heads.

Surely Lilly did nothing wrong if a physician, independently aware of the risks of Zyprexa, chose to prescribe the drug for a patient, and the patient got better. It's hard to see any injury there, or any reason why a state attorney general should seek recovery from the drug's manufacturer.

And surely the FDA prohibits false statements on the package insert of a prescription drug. The State thus appears to be using state law to punish something that's already regulated under federal law and therefore exempt from regulation under the trade practices act. Either that, or the State of Alaska is trying to punish Lilly for making truthful statements on its package insert, which seems even worse.

If we've got the facts and law right (and we believe that we do), then Seward's Folly was not the only one involving our forty-ninth state.

Full post as published by Drug and Device Law on March 21, 2008 (boomark / email).