A lot of firms have already expended a lot of ink discussing the proposed memorandum of settlement filed on March 8, 2016 in Amarin Pharma’s First Amendment litigation against the FDA Here’s a link to Reed Smith’s.  We’ll try not to be repetitive of what everybody else has been saying.  Four points that we haven’t seen elsewhere:

Agreement to be “bound”

Sure, the FDA has “agreed to be bound,”− but to what?  The phraseology preserves agency options:

Defendants agree to be bound by the Court’s conclusion that Amarin may engage in truthful and non-misleading speech promoting the off-label use of Vascepa and, under United States v. Caronia, 703 F.3d 149 (2d Cir. 2012), such speech may not form the basis of a prosecution for misbranding.

Propossed Amarin Settlement, first numbered paragraph.  In the first clause, the FDA simply binds itself to a “conclusion” regarding “speech promoting the off-label use of Vascepa” (the drug in question).  That’s very case specific.

The second clause, however, is capable of a different meaning. In that clause, the FDA binds itself to the conclusion that “under [Caronia], such [truthful and non-misleading] speech may not form the basis for misbranding.”  By its terms, this second conclusion is not tied to the facts of the Amarin case.  It looks like a general agreement to be bound, broad enough to be invoked by other companies.  Maybe it is; maybe it isn’t, but anyone who might later seek to argue that the FDA is collaterally estopped by the decision in Amarin Pharma, Inc. v. FDA, 119 F. Supp. 3d 196 (S.D.N.Y. 2015) – to the extent that’s even possible under United States v. Mendoza, 464 U.S. 154, 162-63 (1984), something that would take more time to examine than we have at the moment − can find support in this clause.  In any event, since courts rather than the FDA now have the last word on the First Amendment question, any limitation that the FDA might try to put on this concession will end up being litigated.

Significance of FDA off-label promotion review process

The procedure established in paragraphs 5-6, 10, is of course significant in that this represents the first time that the FDA has agreed to a process for reviewing and approving off-label promotional statements.  But that’s not all.  As such, it becomes evidence in future First Amendment litigation that less restrictive (of speech) alternatives than the flat ban on off-label promotion that the FDA has asserted for decades not only exist, but the FDA has, in fact, figured out how to run them.  Whether that ban is to be evaluated under the older 4-part commercial speech test fromCentral Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980), the heightened scrutiny test ofSorrell v. IMS Health, Inc., 131 S. Ct. 2653 (2011), or the strict scrutiny “topic”-based approach from Reed v. Town of Gilbert, 135 S. Ct. 2218 (2015), the fact that the FDA is quite capable of evaluating the truth of off-label promotion on a case-by-case basis, and in fact is doing so in this instance, is a factor strongly weighing against the constitutionality of the ban.

Non-waiver of constitutional rights

We haven’t seen anybody comment on this paragraph of the settlement agreement:

. . .[N]othing in this Order shall be construed to limit Amarin’s to free speech concerning Vasepa.

Settlement Agreement, paragraph 4.  We think that anybody dealing with the government concerning any off-label promotion issue should add a paragraph like this to any settlement documents.  Why?  What happens – come the millenium – when the FDA’s ban on truthful off-label promotion falls to the First Amendment?  Well, we’ve commented before on creeping socialization of prescription medical product promotional practices – that is, how (using threats of debarment under the FCA) the Department of Justice and Office of Inspector General have gradually put almost the entire industry under the thumb of Corporate Integrity Agreements (“CIA”s)  Don’t believe us?  Just look at the list of these agreements.

Well, come the millennium, those CIAs – most of them, anyway – will still be there.  What then?  Will the government take the position, again backed by threats of debarment, that regardless of the First Amendment, companies have limited their rights voluntarily by what they agreed to in particular CIAs?  Sure, there are arguments against that position, but who wants to take the chance of litigating under threat of debarment?

This is where paragraph 4 of the proposed Amarin settlement comes in.  That entire problem can be avoided by including a constitutional rights savings clause in a Corporate Integrity Agreement (or any lesser settlement).  That way, when (and if) the millennium arrives and the First Amendment submerges the FDA’s ban on off-label promotion, a company’s ability to take advantage of that ruling will not be hindered by restrictions on promotional practices imposed by CIAs and the like, since constitutional rights aren’t being waived.

“Legitimate” off-label promotion

Finally, remember cases like In re Neurontin Marketing & Sales Practices Litigation, 712 F.3d 21 (1st Cir. 2013)?  We sure do. The Neurontin trilogy took #1 worst decision of the year dishonors for 2013.  Well, the facile distinction that the First Circuit took in Neurontin between so-called “legitimate on-label promotion” and all off-label promotion – which plaintiffs’ expert equated with “fraudulent” promotion, id. at 30 (describing expert testimony as, “promotional spending on off-label marketing was the same as the promotional spending on fraudulent off-label marketing”) – won’t fly anymore.  With the government inching closer and closer to a general concession that truthful off-label promotion is legal, plaintiffs’ experts should no longer be able to aggregate damages as they were allowed to do in Neurontin, automatically assuming that all off-label promotion was “false” or “fraudulent.”  This should open up the door, in off-label promotion cases to additional challenges, on First Amendment grounds, to “aggregate data and statistical approaches,” id. at 29, that do not account for truthful off-label promotion being unable to support either prosecution or false claims allegations.