We’ve complained before about the federal government’s monetization of First Amendment violations in the context of truthful promotion of off-label uses:

[T]he government has ruthlessly monetized its questionable ban on truthful off-label promotion for quite a few years now. Indeed, the government has used this ban as the basis for a creeping administrative takeover of pharmaceutical and medical device public relations practices. Don’t believe us? Just take a look at the Office of Inspector General’s list of “corporate integrity agreements.”

Then, in the wake of the First Amendment win in Amarin Pharma, Inc. v. FDA, 119 F. Supp. 3d 196 (S.D.N.Y. 2015), we noted an interesting provision in the settlement that ended that litigation:

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

That got us thinking, and we commented about OIG’s corporate integrity agreements (“CIAs”) in the wake of a hypothetical First Amendment invalidation of the FDA’s ban on truthful promotion of off-label uses:

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?

We thus recommended addition of First Amendment non-waiver provisions in all future deals with the government that touched upon off-label promotion. After all, the government has hardly been consistent in its positions regarding the First Amendment and truthful off-label promotion.

We hope all of you out there were listening, because the federal Office of Inspector General (“OIG”) recently made just such a waiver argument in an action, Patient Services, Inc. v. United States, No. 3:18-cv-00016-MHL, pending in the Eastern District of Virginia. Patient Services does not involve a CIA or off-label promotion, but the arguments are the same. According to the complaint in Patient Services:

  1. PSI is a non-profit charitable foundation that operates Patient Assistance Programs (“PAPs”), which provide financial and other assistance to indigent patients who have chronic and often life threatening diseases that require expensive treatment and management. . . . Since 2002, OIG has provided public guidance directing how PAPs should be structured and operate in accordance with its view of the Anti-Kickback statute.

  2. Specifically, since 2002, and like all other PAPs, PSI has operated pursuant to an Advisory Opinion from OIG that provides specific guidance as to how PSI should operate and structure its programs to avoid a risk of an enforcement action. . . . The 2017 Modified Advisory Opinion, however, imposes new and oppressive restrictions that cripple PSI’s ability to carry out its charitable efforts. In particular, the 2017 Modified Advisory Opinion imposes new restrictions that prevent PSI from communicating with donors, potential donors or their purported “affiliates” about new or modified programs to treat chronic diseases affecting indigent populations.

Cutting out the legal jargon, the government is threatening PAP charities with prosecution to keep them from discussing the medical conditions they seek to combat with “donors” – who may also be manufacturers of products used to treat those conditions. To operate, Patient Services must have an OIG advisory opinion, which it did through 2014. Then, according to the complaint, OIG changed the rules. “OIG specifically required [plaintiff] to make a series of certifications to retain an advisory opinion.” Complaint ¶81. In order to keep operating, the plaintiff accepted the certifications (nearly “two dozen” of them), and in the litigation, challenged them on First Amendment grounds. Id. ¶¶82-84.

If, instead of charities and mandatory OIG “certifications,” we were to substitute FDA regulated manufacturers and CIAs involving off-label promotion restrictions, it would be the same situation we warned about previously. That’s why the Patient Services interests us.

In a recent brief in Patient Services, OIG now argues that, regardless of what the First Amendment may or may not protect, the plaintiff waived its First Amendment rights when it agreed – under threat of prosecution − to the certifications. Deleting as many case-specific facts as possible, OIG’s argument goes:

[T]his case . . . involves a negotiated waiver of First Amendment rights. . . . In Lake James [Community Volunteer Fire Dept., Inc. v. Burke County, N.C., 149 F.3d 277, 280 (4th Cir. 1998)], . . . a fire department’s “agreement to consent to citizens’ petitions and not to challenge them in court [wa]s [an] enforceable” waiver of its First Amendment rights. Id. Notably, the court applied this standard notwithstanding the fire department’s argument that it had been put to the choice between agreeing to a contract that included what it perceived to be unconstitutional provisions and going without the contract and the benefits it provided. . . . Because the case ultimately involved a negotiated waiver of constitutional rights, the court applied the test, described below, to determine the enforceability of that waiver.

Just so here. [Plaintiff] agreed to the three provisions about which it now complains, i.e., to the extent these provisions affect [its] rights, it is because [plaintiff] waived those rights. . . . Indeed, the negotiations were conducted by the Agency and counsel for [plaintiffs]. . . .

Under Lake James, a negotiated waiver of First Amendment rights is valid if it (1) is a “knowing waiver,” that is (2) “voluntarily given,” (3) and which does “not undermine the relevant public interest.” 149 F.3d at 280. . . . Judicially noticeable facts and facts included in the administrative record – namely, the size and sophistication of [plaintiff] . . ., the fact that it was assisted by counsel, and the fact that negotiations stretched on for years – indicate that any waiver of First Amendment rights was both knowing and voluntary.

OIG brief at 9-11 (factual citations omitted) (emphasis added).

So there you have it. Even if we win, and truthful off-label promotion is declared constitutionally protected from government interference, OIG is prepared to argue that existing CIAs – even though negotiated under threat of federal debarment – remain enforceable. Almost all manufacturers with CIAs far exceed the charitable plaintiff in Patient Services in terms of “size and sophistication,” and all were “assisted by counsel” in the “negotiations” that produced CIAs in which they agreed to refrain from all off-label promotion, including truthful promotion. So, even though those CIAs were about as voluntary as breathing, expect the OIG to argue otherwise, because it is arguing just that, right now.

Amarin was smart when it insisted on a First Amendment non-waiver provision when it settled with the government. Of course, it also had a more favorable negotiating position, having won a First Amendment decision that the government was loathe to appeal. Anyone subject to a CIA who doesn’t have such a provision, however, must be prepared to fight a second front, against OIG, even after Sorrell v. IMS Health Inc., 564 U.S. 552 (2011), is applied to truthful off-label promotion on a nationwide basis.

Be prepared – and watch what happens with constitutional waiver in the Patient Services case.