FDA Regulations Prohibiting Drug Companies From Off-Label Promotion Under Challenge; 2nd Circuit Says Off-Label Promotion is Protected Free Speech; 9th Circuit Also Considers Issue

December 11, 2012

Recently, two federal appellate courts considered First Amendment challenges that could threaten the U.S. Food and Drug Administration (“FDA”) ban on off-label promotion by drugmakers and their employees, and undermine a series of off-label promotion criminal prosecutions by the government.

On December 3, the Second Circuit U.S. Court of Appeals in New York threw out the conviction of a pharmaceutical salesman for marketing drugs for uses not approved by FDA on the grounds that his statements involved constitutionally protected free speech. The case, U.S. v. Caronia, involved a set of FDA regulations prohibiting drug companies from off-label marketing, or marketing a drug for purposes not approved by the agency.

In a 2-1 split vote, the court overturned the conviction of a former Orphan Medical, Inc. (now Jazz Pharmaceuticals Inc.) sales representative who had been charged with “misbranding” under 21 U.S.C. § 331(a) and (a)(1). The sales representative, Alfred Caronia, was accused of conspiring with Orphan to promote Xyrem, a powerful depressant known as the “date rape drug,” for various off-label purposes. Caronia argued that the application of the FDA misbranding provisions to his truthful off-label promotional statements unconstitutionally restricted his right to free speech under the First Amendment. While the trial court recognized that off-label promotion implicated speech, it denied Caronia’s motion to dismiss the charges, and he was later convicted.

Caronia appealed his conviction on First Amendment grounds. The government claimed that Caronia’s speech was used only as evidence of his intent to promote the off-label use of Xyrem and that the First Amendment does not prevent the use of speech as evidence of criminal intent. The Second Circuit rejected this argument, finding that the criminal conviction rested solely on Caronia’s speech. The court reasoned that because the FDA regulations effectively regulated “content,” it was required to apply “heightened scrutiny” to the regulations. Under the heightened scrutiny standard, the court found that while the government has substantial interests in ensuring drug safety and public health, the FDA’s off-label regulations were not narrowly tailored to serve those interests. The court cited several less restrictive measures, which could have been applied to promote the government’s interests.

On December 6, the Ninth Circuit U.S. Court of Appeals in California heard a similar First Amendment challenge, in U.S. v. Harkonen, by a biotech executive convicted of fraud in touting a lung-disease drug. Former InterMune, Inc. CEO W. Scott Harkonen is appealing a 2009 wire fraud conviction for a news release that promoted the survival benefits of Actimmune, made to treat fatal lung disease. He claims that his conviction should be reversed because the news release “expressed a scientific view” that is protected speech under the First Amendment. The government argues that the First Amendment does not bar a “criminal prosecution of false statements with an intent to defraud” just because they “concern scientific matters.” The three-judge panel of the Ninth Circuit will decide the case in the coming weeks.

Given the potential implications of these cases on FDA regulations and free speech rights, it is possible that they will be reviewed by the U.S. Supreme Court in the future. At a minimum, they will force the government to reconsider its approach to prosecutions involving truthful off-label promotion.

This article was originally published by Bingham McCutchen LLP.