Off-Label Marketing Conviction Violates First Amendment

“In an opinion that will certainly be welcomed by many in the industry, the court rejected the government’s interpretation of the Food, Drug and Cosmetic Act’s (FDCA) misbranding provisions, holding, ‘We conclude simply that the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful off-label use of an FDA-approved drug.’ The court found that ‘such a construction — and a conviction obtained under the government’s application of the FDCA — would run afoul of the First Amendment.’” (Skadden Arps)

The Food, Drug and Cosmetic Act prohibits the promotion of prescription drugs for purposes other those approved by the FDA – a practice known as “off-label marketing” – and federal regulators have been quite aggressive in their pursuit of violators. A recent appeals court ruling might require regulators to rethink their approach, however.

Alfred Caronia, a pharmaceutical representative for Orphan Pharmaceuticals, was convicted in 2007 of “conspiring to introduce a misbranded drug into interstate commerce” for the off-label marketing of his employer’s narcolepsy drug.

But the use of the drug as promoted by the sales rep was truthful, and he appealed the conviction on First Amendment grounds, “arguing primarily that the FDCA’s misbranding provisions unconstitutionally restrict his speech.” The appeals court agreed with Caronia, and in doing so dealt a significant blow to the government’s efforts to regulate off-label marketing of drugs and medical devices.

For your reference, here’s what lawyers and law firms on JD Supra are saying about the Second Circuit Court of Appeals ruling:

Second Circuit Holds Food, Drug and Cosmetic Act Does Not Prohibit Off-Label Promotion (Dechert LLP):

“When the FDA approves a drug, it approves it for specific uses, although physicians are generally free to use their medical judgment to prescribe the drug for both approved and unapproved uses…Thus, the government has long prosecuted pharmaceutical companies and their representatives for off-label promotion on the theory that the drugs are ‘misbranded’ because their labels do not contain adequate directions for those unapproved uses.” Read on>>

In Landmark Decision, Second Circuit Reverses Conviction For Off-Label Promotion (Perkins Coie):

“Recent government fraud enforcement has heavily focused on pursuing criminal and civil penalties against those who promote off-label use of drugs and medical devices. Notably, earlier this year, GlaxoSmithKline LLC (GSK) agreed to pay an unprecedented $3 billion to resolve criminal and civil allegations relating in part to unlawful promotion of prescription drugs.“ Read on>>

Second Circuit Vacates Conviction Based on Off-Label Promotion, Deals Blow to Government Theory in Drug Marketing Cases (Skadden, Arps, Slate, Meagher & Flom LLP):

“Orphan Medical — now Jazz Pharmaceuticals — hired Alfred Caronia in March 2005 as a pharmaceutical sales representative to sell its prescription drug Xyrem. Xyrem’s only FDA-approved use at the time was for the treatment of cataplexy — a condition associated with weak or paralyzed muscles — in narcolepsy.” Read on>>

First Amendment Prohibits Criminal Prosecution of Truthful Off-Label Promotion (Morgan Lewis):

“Caronia was tape-recorded by a government informant, on two occasions, promoting the off-label use of Xyrem… Caronia was subsequently charged with two misdemeanor violations of the FDCA: conspiracy to introduce a misbranded drug into interstate commerce and introducing a misbranded drug into interstate commerce.” Read on>>

Second Circuit Delivers Blow to Off-Label Promotion Prosecutions in U.S. v. Caronia (Morrison & Foerster LLP):

“The legal theories under which off-label promotion becomes a criminal violation of the FDCA have received little judicial scrutiny. Although First Amendment challenges have been raised in off-label promotion cases, most have been withdrawn or resolved as part of the global settlement of charges against companies facing criminal healthcare fraud prosecutions. Caronia’s First Amendment challenge is one of the few to survive that process and result in a written opinion.” Read on>>

Second Circuit Holds that Criminal Penalties for Pharmaceutical Sales Representative’s Off-Label Promotion Violate the First Amendment (Howard Ullman):

“The Second Circuit’s opinion is poised to significantly change the landscape for companies and individuals involved in the promotion of pharmaceuticals and medical devices. If upheld through the appellate process, the decision will have a profound impact on current government investigations and prosecutions for off-label promotion, and may lead to significant revisions in corporate compliance programs.” Read on>>

Off Label Marketing – First Amendment Challenge Ruling (Mintz Levin):

“But the appellate court did not strike down any portion of the FDCA. And the court did not limit the government’s authority to prosecute individuals or entities under the FDCA for off-label marketing which is allegedly false or misleading, such as alleged suppression of clinical study results or misrepresentation of the extent of FDA approval. What the court did say is that truthful off-label promotion of an FDA approved drug, without anything more, is protected speech and cannot be prosecuted as misbranding under the FDCA.” Read on>>

Second Circuit Court of Appeals Issues Blow Against Off-Label Promotion Enforcement (Dechert LLP):

“One panel judge, Debra Ann Livingston, strongly dissented from the holding. She emphasized the long enforcement against off-label promotion and disagreed with the majority’s Constitutional reasoning. This decision can be appealed to the entire Second Circuit sitting en banc, and/or the U.S. Supreme Court.” Read on>>

Second Circuit Reverses Conviction Involving Off-Label Promotion (Ballard Spahr LLP):

“The court made clear, however, that false or misleading off-label promotion does not receive First Amendment protection. Additionally, the court did not address whether promotion of off-label uses could be relied on as evidence of the crime of introducing a misbranded drug.” Read on>>

‘Off-Label’ FDA Cases Can Run Afoul of First Amendment, Appeals Court Holds (Ifrah Law):

“The court’s decision clearly leaves the FDA with significant power to regulate and punish pharmaceutical companies in connection with its oversight over the approval and marketing of prescription drugs – for example, in cases in which manufacturers make false statements about off-label use of their products. But, assuming that other courts reach similar conclusions, the ability of the federal government to act against off-label promotion may be significantly diminished.” Read on>>

Second Circuit Rules Off-Label Prosecution Violates First Amendment (Michael Volkov):

“In reversing Caronia’s conviction, the Second Circuit applied a ‘heightened scrutiny’ standard and found that the regulations were not narrowly tailored to the government’s interest in promoting drug safety and the FDA approval system. The Caronia Court cited several less restrictive measures which could have been applied to promote the government’s interest, such as warnings to doctors of off-label uses, which would not implicate First Amendment rights.” Read on>>

Second Circuit Vacates Conviction Against Sales Representative for Off-Label Promotion (Foley Hoag LLP):

“Importantly, too, the Second Circuit’s decision is the first in this area, and it is not clear what effect the divided decision will have outside of the court’s jurisdiction. Massachusetts, for example, home to many high profile off-label prosecutions, is outside of the Second Circuit and is not bound by its decisions. Whether the Department of Justice will change tactics based on this divided decision, and/or will seek Supreme Court review, remains to be seen.” Read on>>

Second Circuit Holds First Amendment Bars Conviction Based Solely on Off-Label Promotion of FDA-Approved Drug (Ropes & Gray LLP):

“Although the decision arose from a criminal prosecution, it will have implications as well for other enforcement activities, including False Claims Act suits, in which the government or relators urge off-label promotion as a basis for liability.” Read on>>

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