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Off-Label Promotion and the First Amendment: How a $25 Fine and 100 Hours of Community Service Sank the Titanic

December 11th, 2012
in Advertising & Marketing, Expert Guest Blog Entries, Food and Beverage, Pharmaceuticals / Biotech / Life Sciences |

Expert article by Michael Walsh:

December 3, 2012 was a good day for Alfred Caronia, a sales rep for a drug manufacturer.  It was three years to the day after his trial for off-label promotion resulted in a conviction for a misdemeanor and subjected him to a $25 fine and 100 hours of community service.  Not happy is one of his co defendants, Dr. Gleason, who settled before trial and, as a result of his federal criminal plea, spiraled downward taking his own life.  So why is this sad little case ripping the fabric of FDA enforcement of off-label promotion?

On December 3, 2012, two years to the day from hearing the case, the Second Circuit, in United States v. Caronia, ruled that the FDA’s civil and criminal enforcement of drug companies violates the First Amendment.  Not unlike the iceberg that sank the Titanic, it wasn’t the small object on the surface that presented the risk, it is what was lying beneath the surface.

Off-label promotion cases are simply too big and the stakes (i.e. losing the ability to conduct business) are simply too great for a company to seriously consider defending an off-label marketing claim.  The government has poured tens of billions of dollars in fines and penalties into its coffers based on an enforcement regime that a federal circuit court has now found to be in violation of the First Amendment to the U.S. Constitution.  Ironically, massive off-label promotion plea agreements involving big pharma have been the fodder of daily news reports for many years; yet, it took a small case involving a individual sales rep to question the constitutionality of FDA’s enforcement of off-label promotion.

While this case will provide real and immediate comfort to a great many sales representatives, manufacturers and distributors of FDA regulated products may see this case as a watershed.  As suggested at footnote 12 in the Caronia opinion and by Justice Rehnquist in his dissenting opinion in the landmark Central Hudson case, private litigants may replace governmental prosecutions, and nationwide off-label promotion tort claims could pose a significant new threat to companies with products used off-label.  Aboard the Titanic of FDA regulation of off-label promotion rode very potent cargo for manufacturers; deference to agency determinations, and, most importantly, preemption.  Both may have gone down with the ship.

The command of the Constitution is a mere ten words:

“Congress shall make no law … abridging the freedom of speech …”

Yet the FDA places restrictions on what, when, where, why, who and how a manufacturer may disseminate information concerning regulated products.  Over decades, the statutory and regulatory framework has expanded, placing more and more restrictions on information that may be disseminated.  The enforcement of these regulations gradually infringed upon First Amendment protections and the court that have looked at the issue have expressed serious concerns that the government infringes First Amendment protections.

Off-label use presents a conundrum where a manufacturer with reliable scientific and medical information regarding a product is throttled under the rubric of off-label promotion, while a physician lacking any scientific or medical basis is free to prescribe or use that product.  Effectively, the manufacturer is silenced while the physician, the consumer, and even academia are unrestrained in recommending any product for any use.  From this conundrum, an urgent moral and ethical imperative exists to provide more—not less—reliable scientific and medical information.

When did it all begin?

In 1942 the United States Supreme Court made a profound and admittedly erroneous assumption that is taking decades for the Court to recognize and gradually walk back.  In Valentine, the Supreme Court held that,

[T]he Constitution imposes no such restraint on government as respects purely commercial advertising.

From that ruling grew generations of cases confounding the public beyond comprehension and leaving legal scholars pleasantly divided.  It wasn’t until the mid 1970’s that the Supreme Court said what the public instinctively knew all along:

As to the particular consumer’s interest in the free flow of commercial information, that interest may be as keen, if not keener by far, than his interest in the day’s most urgent political debate.

In the ensuing decades the Supreme Court has continued evolving.  The debate circles around a few simple questions:

Is it speech? If yes: is the regulation subject to strict scrutiny and, if it is, test it under intermediate scrutiny anyway.

Is commercial speech involved and does the regulation survive the four prong Central Hudson intermediate scrutiny test?

Orphan Medical manufactured and marketed a sleep-inducing depressant, Xyrem.  The drug had a black box and was labeled for serious potential side effects. A government informant, Dr. Charno, who had pled guilty to submitting fraudulent medical insurance bills, contacted Caronia, asking for information on off-label use and for a presentation by a medical liaison. Caronia arranged the presentation, and the sting operation resulted in prosecution.  Unfortunately for Caronia, his employer admitted to a conspiracy to misbrand and took a plea bargain, and the former manager testified that he had personally instructed the medical liaison to misbrand the product on prior occasions.

In denying Mr. Caronia’s motion to dismiss, the trial court was prescient in stating:

Reduced to its essence, Caronia’s argument is that the government cannot restrict truthful, non-misleading promotion by a pharmaceutical manufacturer (or its employees) to a physician of the off-label uses of an FDA-approved drug … Squarely, Caronia’s constitutional attack calls into question America’s regulatory regime for the approval and marketing of prescription drugs.

The trial court went on to state:  “The Constitutional issues raised in Caronia’s motion are very much unsettled, not only in the circuit but nationwide.”

The Second Circuit noted that the FDCA makes it a crime to misbrand or conspire to misbrand a drug, but the statute and its accompanying regulations do not expressly prohibit or criminalize off-label promotion.  Based on the statutory and regulatory framework, the Second Circuit elected to avoid deciding the Constitutionality of the FDCA, and instead questioned the government’s prosecution.  The result is the same for Mr. Caronia, but it enabled the Court to reach its result without finding the law unconstitutional.  In this regard, the Court stated:

Thus, under the principle of constitutional avoidance, explained infra, we construe the FDCA as not criminalizing the simple promotion of a drug’s off-label use because such a construction would raise First Amendment concerns.  Because we conclude from the record in this case that the government prosecuted Caronia for mere off-label promotion and the district court instructed the jury that it could convict on that theory, we vacate the judgment of conviction.

The Court went on to state:

To the extent there is any ambiguity as to whether off-label promotion is tantamount to illegal misbranding, we construe the FDCA narrowly to avoid a serious constitutional question.  As we now explain, we decline the government’s invitation to construe the FDCA’s misbranding provisions to criminalize the simple promotion of a drug’s off-label use by pharmaceutical manufacturers and their representatives because such a construction – and a conviction obtained under the government’s application of the FDCA – would run afoul of the First Amendment.

In arguing the case to the Second Circuit, the government took a position it had not taken at the trial court level, arguing that the speech at issue “was not speech at all but was conduct evidence of intent to misbrand.”  The Second Circuit was unimpressed with the government’s shameful ploy rejecting it as “simply not true” “the government clearly prosecuted Caronia for his words – for his speech.”

Following the Supreme Court in Sorrell, the Second Circuit analyzed the case under both strict scrutiny and intermediate scrutiny stating:

First, we conclude that the government’s construction of the FDCA’s misbranding provisions imposes content and speaker based restrictions on speech subject to heightened scrutiny.  Second, we conclude the government cannot justify a criminal prohibition of off-label promotion even under Central Hudson‘s less rigorous intermediate test.

The Court found heightened scrutiny because the “government’s construction of FDCA’s misbranding provisions” is “content and speaker based” and therefore subject to heightened scrutiny. Content based because it distinguishes “favored speech” on the basis of ideas expressed. Particularly notable to the Second Circuit was that off-label speech is prohibited while off-label use is not.  In addressing the “speaker based” aspect, the Circuit Court observed that the government’s construction only barred manufacturers from speaking where others are free to speak.

The Court went on to apply the now well known Central Hudson four part test holding as follows:

1.    The commercial speech must concern unlawful activity and not be misleading.  The court found the off-label promotion at issue concerned a lawful conduct and the information was truthful.

2.    The asserted governmental interest in drug safety and public health must be substantial and the Circuit Court so found.

3.    The regulation must directly advance the governmental interest asserted. In finding that the prohibition failed the third prong of Central Hudson, the Court found:

[I]t does not follow that prohibiting the truthful promotion of off-label drug usage by a particular class of speakers would directly further the government’s goals of preserving the efficacy and integrity of the FDA’s drug approval process and reducing patient exposure to unsafe and ineffective drugs.

Not only did the Court find that the prohibition failed to advance the government’s interest, it found the opposite:

[P]rohibiting off-label promotion by a pharmaceutical manufacturer while simultaneously allowing off-label use ‘paternalistically’ interferes with the ability of physicians and patients to receive potentially relevant treatment information; such barriers to information about off-label use could inhibit, to the public’s detriment, informed and intelligent treatment decisions.

Recognizing that it is the physician’s role to consider multiple factors to determine the best course of action for a patient, the Court stated:

The government’s construction of the FDCA essentially legalizes the outcome - off-label use - but prohibits the free flow of information that would inform that outcome.  If the government’s objective is to shepherd physicians to prescribe drugs only on-label, criminalizing manufacturer promotion of off-label use while permitting others to promote such use to physicians is an indirect and questionably effective means to achieve that goal.  Thus, the government’s construction of the FDCA’s misbranding provisions does not directly advance its interest in reducing patient exposure to off-label drugs or in preserving the efficacy of the FDA drug approval process because the off-label use of such drugs continues to be generally lawful.  Accordingly, the government’s prohibition of off-label promotion by pharmaceutical manufacturers ’provides only ineffective or remote support for the government’s purpose.’

4.    The regulation must not be more extensive than necessary.  The courts have described this prong as whether there is a “reasonable fit” not the least restrictive means.  The Second Circuit found the regulation is more extensive than is necessary to serve the government’s interest.  The Court then provided a number of alternatives the government could pursue that would not implicate the First Amendment.  According to the Court, “if the government is concerned about the use of drugs off-label, it could more directly address the issue” and the Court set out six potential alternatives:

i.    It could guide physicians and patients in differentiating between misleading and false promotion, exaggerations and embellishments, and truthful or non-misleading information.

ii.    The government could develop its warning or disclaimer systems, or develop safety tiers within the off-label market, to distinguish between drugs.

iii.    The government could require pharmaceutical manufacturers to list all applicable or intended indications when they first apply for FDA approval, enabling physicians, the government, and patients to track a drug’s development.

iv.    To minimize off-label use, or manufacturer evasion of the approval process for such use, the government could create other limits, including ceilings or caps on off-label prescriptions.

v.    The FDA could further remind physicians and manufacturers of, and even perhaps further regulate, the legal liability surrounding off-label promotion and treatment decisions.  In its Footnote 12 the Court states “Physicians and pharmaceutical manufacturers can be held accountable for off-label drug use through medical malpractice and negligence theories of liability.”

vi.    Finally, where off-label drug use is exceptionally concerning, the government could prohibit the off-label use altogether.

According to the Court, “[t]he possibilities are numerous indeed.”

What should take the immediate attention of every company who markets and distributes FDA regulated products is the Court’s fifth recommendation concerns private litigation.  Also notable is that where there is a right to speak, there is soon may follow a claim that there is a corresponding duty.

In conclusion, the Court purports to have a simple holding, stating:

We construe the misbranding provisions of the FDCA as not prohibiting and criminalizing the truthful off-label promotion of FDA-approved prescription drugs.  Our conclusion is limited to FDA-approved drugs for which off-label use is not prohibited, and we do not hold, of course, that the FDA cannot regulate the marketing of prescription drugs.  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 dissent fails to address the core issue in this case.  The recognition by the medical community and, more importantly, the FDA that off-label use often represents the “standard of care.” creates an irreconcilable clash with both the First Amendment and Due Process when the law is currently enforced to prohibit the dissemination of truthful scientific information.  The urgent public health issue for state and federal regulators, the medical community and manufacturers is to foster the dissemination of truthful, reliable medical and scientific information, and to focus enforcement on false, unsupported and unreliable misinformation that presents a real and immediate risk to the public.

While Caronia is major development in the FDA’s regulation of drug and device product promotion that will usher in a new era in how truthful information is disseminated, it may also signal the beginning of a new wave of private litigation.

ACI event related to this topic

ACI’s 10th Annual Expert Guide to Advertising, Promotions and Digital Marketing for the Life Sciences Industry

When: Thursday, January 24 to Friday, January 25, 2013

Where: Union League, Philadelphia, PA, USA

For more information, and to register: click here

Tags: ACI Event, Expert Article, Michael Walsh
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