In a decision that will likely pose significant challenges to the government’s regulation of marketing and promotion of pharmaceuticals and other FDA-regulated products, the Court of Appeals for the Second Circuit invoked the First Amendment in overturning the 2008 conviction of a sales representative for the promotion of a drug for uses not approved by the Food and Drug Administration (“FDA”).

In the case of United States v. Caronia, the Second Circuit held that the government’s interpretation of the Food, Drug and Cosmetic Act (“FDCA”) with regard to so called “off-label” promotion ran afoul of the First Amendment’s guarantee of free speech. The ruling is clearly a victory, though a preliminary one, for the pharmaceutical industry, which has seen countless drug companies enter guilty pleas to violations of the FDCA for the type of promotional activity as was upheld in Caronia. The decision, limited to the 2nd Circuit, is unlikely to change any sales strategies in the short term, as the industry must now wait to see if other circuits intend to follow suit. But a new battle line has been drawn as the FDA and DOJ will be forced to consider the ruling in enforcement actions currently underway. The battle is likely to work its way to the Supreme Court.

The Case of Alfred Caronia.

In 2005, Alfred Caronia, a sales representative for Orphan Medical, Inc., was charged with conspiring to market a misbranded drug. He was caught on tape telling a physician/customer about various off-label uses for the drug Xyrem. The drug, approved by the FDA for treatment of specific conditions relating to narcolepsy, was touted by Caronia as being helpful for treating other disorders such as fibromyalgia and chronic pain. (Caronia was unknowingly speaking to an undercover government informant, further evidence that DOJ enforcement agents patrolling the “white collar” industries have been implementing “blue collar” crime stopping techniques for years.)

Off-label use of an FDA approved drug is not prohibited by law, and physicians are free to prescribe FDA approved drugs for non-FDA approved purposes. But the FDA has long claimed that an approved drug that is marketed for an unapproved use is “misbranded” under the FDCA because the labeling of such a drug does not include “adequate directions for use” within the meaning of the statute. United States v. Caronia, No. 09-5006-cr (2nd Cir. Dec 3, 2012) slip op. at 10.

The legality of off-label use, and the fact that the FDCA does not prohibit physicians from the off-label prescription of approved drugs, was a key factor in the Court’s reversal. As the majority 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.” Id. at 47.

The Court concluded that Caronia was improperly convicted for off-label promotion, which is legal, rather than introducing misbranded drugs into the stream of commerce, which is illegal. It is important to note, however, that the majority dismissed the government’s argument that the speech at issue – Caronia’s in-person hawking of Xyrem for off-label uses – was merely being introduced as evidence of his intent to sell misbranded drugs (i.e., drugs that were not labeled for the promoted use). Once it concluded that the government had prosecuted Caronia based on his promotional speech rather than on the sale of inadequately labeled drugs, the majority then determined that such content based restrictions were subject to a heightened scrutiny analysis, which ultimately did not survive under the First Amendment.

The Second Circuit seemed to acknowledge the firestorm it was creating in stating that, “…if the government is concerned about the use of drugs off-label, it could more directly address the issue.” Id. at 48. This opinion will demand the attention of government policymakers and pharmaceutical companies alike. Further legal challenges to FDA’s regulation of off-label promotion and judicial analyses of FDA’s authority are certain to follow. A more comprehensive and in-depth analysis of the court’s decision is available HERE.