On Dec. 3, 2012, the U.S. Court of Appeals for the Second Circuit decided in a split decision that the FDA rule banning pharmaceutical manufacturers from truthfully and accurately speaking about a drug’s unapproved uses (“off-label promotion”) was a violation of the First Amendment and an individual’s freedom of speech.

This is a landmark decision because manufacturers have tried and failed before to have the judiciary determine that the FDA’s ban violates the First Amendment. Moreover, FDA has secured multiple off-label promotion settlements with the pharmaceutical industry — totaling more than $10 billion, including GlaxoSmithKline’s $3 billion settlement in July.

Three key considerations regarding the Second Circuit’s decision:

  1. Pharmaceutical Manufacturers’ free speech. The Caronia court opined that truthful and accurate off-label promotion — which doctors are allowed to do — by pharmaceutical manufacturers “only furthers the public interest to ensure that decisions about the use of prescription drugs, including off-label usage, are intelligent and well-informed.” The majority strongly noted, however, that off-label promotion that is false or misleading is not entitled to First Amendment protection.
  2. Loss of Preemption in Personal Injury Suits. Pharmaceutical manufacturers may not be able to rely on the preemption defense to personal injury suits that if a manufacturer meets all the FDA’s labeling requirements, the manufacturer shouldn’t be held liable for failure-to-warn claims under state law. If a manufacturer promotes a drug off- label, however, plaintiffs may argue that manufacturers who are able to freely speak about off-label uses must also bear the risk that the off-label uses could inadequately fail to warn a patient of the risk of using the drug off label. Therefore, the plaintiff would argue that the manufacturer should be subject to a failure-to-warn claim.
  3. The decision will most likely be appealed. Experts expect the FDA to appeal the Second Circuit’s decision for either an en banc review by the entire Second Circuit or to the Supreme Court. In the interim, pharmaceutical manufacturers are using the case as persuasive law for currently ongoing off-label promotion cases in other circuits.