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If a consulting firm that has been hired by a potential purchaser of a pharmaceutical company to assist with a due diligence review. The consulting role is to help the potential purchaser assess all of the risks (legal, financial, market-based and otherwise) of the purchase. The potential purchaser has expressed concerns about exposure to legal liability for off-label promotion, in part because there are rumors circulating that the sales force associated with the target pharmaceutical company may in fact have engaged in such promotion with regard to its most profitable drug.
What is the (1) the laws that are implicated by off-label promotional practices; (2) the government agencies that are charged with enforcing those laws; and (3) the specific types of liability (i.e., penalties, criminal sanctions, administrative actions, civil damages) to which the company might be exposed if the rumors are substantiated.
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