We’ve blogged about United States v. Caronia before. In fact, some might say we’re a bit obsessed by it, and with good reason; the First Amendment’s a big deal to us, and Caronia represents an opportunity for a Court of Appeals to pass on the constitutionality of FDA’s draconian and convoluted off-label promotion rules. As a reminder, Mr. Caronia is the poor sales rep that was convicted of conspiring to misbrand Xyrem by promoting it for off-label uses.

Now we’ve gotten our hands on an unofficial transcript of the oral argument before the Second Circuit Court of Appeals (thank you Rick Samp, over at WLF), and here’s what happened:

The panel was Judge Denny Chin, Judge Debra Ann Livingston, and Judge Reena Raggi. Interestingly, Judges Raggi and Livingston were recently on a panel in another First Amendment case, where the court ruled that Vermont’s restriction of religious vanity license plates violated the Free Speech clause (that case is Byrne v. Rutledge, 623 F.3d 46 (2d Cir. 2010), if you’re interested).

The Caronia panel was a hot bench. In particular, Judge Raggi challenged all of the advocates – especially the government attorney, Douglas Letter. A few themes emerged:

1) We previously speculated that the Second Circuit could dodge the constitutional question because the defendant argued in the alternative that there was an inconsistency in the verdict sheet. The panel didn’t seem at all inclined to do that. It gave the verdict sheet issue pretty short shrift, and quickly homed in on the Constitutional issues raised by the appeal, so it’s looking likely that the decision will tackle the First Amendment issues head-on.

2) Jennifer McCann and Eric Murphy (WLF) argued on behalf of the defendant. They made clear that this case presents an overbreadth challenge. The FDA’s off-label regulatory scheme is unconstitutional as applied here, where approval for the off-label use is pending. That’s a rather limited, but particularly sympathetic fact pattern – but you know what they say about camel’s noses and tents. Thus, the defendant argued, the regulatory scheme is not narrowly tailored to achieve the government’s stated goals; although FDA says it restricts off-label speech so as to incentivize manufacturers to go through the rigorous approval process, in this case, the manufacturer was seeking approval for the off-label use. Judge Raggi asked Murphy whether there is a reasonable distinction between restricting the speech of company scientists or doctors, which she suggested would lead to an overbreadth problem, and restricting the speech of a sales rep, which could be viewed as a reasonable limitation consistent with the government’s regulatory purposes (i.e., limiting uninformed discussion by someone whose interest is simply to “tout” the drug).

3) Douglas Letter’s argument on behalf of the government started where you’d expect: First Amendment? We don't need no stinkin’ First Amendment. We’re punishing conduct – the introduction of a misbranded drug into interstate commerce – and the speech at issue is simply evidence of intent. Reading tea leaves, that argument isn’t going anywhere. Judge Raggi and Judge Chin both challenged Letter extensively on this point, in the process repeatedly underscoring that doctors may lawfully prescribe drugs for off-label purposes. So, asked Judge Raggi, since a doctor could prescribe Xyrem off-label, and the Xyrem that hypothetical doctor prescribed would carry an identical label to Xyrem being prescribed for an approved use, the only thing making the off-label Xyrem “misbranded” (and thus giving rise to criminal sanctions) is the speech “touting” the off-label use. Ergo, the government’s punishing speech, not seeking to use it as evidence of intent. When Letter tried to dodge this, Judge Livingston asked Letter whether a manufacturer violates FDA regulations where the manufacturer knows the prescriber is going to use Xyrem for an off-label use, but nonetheless ships the Xyrem to the prescriber without saying anything about that off-label use. Letter didn't really have a good answer to this; he dodged and said there would not be a violation because the hypothetical presented a scenario where the manufacturer had “subjective intent” as opposed to “objective intent.” Huh? Judge Livingston called him on this, asking what else a manufacturer might do that would be evidence of “objective intent.” Ultimately, Letter had to concede that he knew of no off-label case where the government proved misbranding without relying on evidence of off-label speech.

4) In a related argument, Letter repeatedly stressed that “promotion is not a crime.” Yet Judge Raggi said she was “really concerned that this case went to the jury with the understanding that what was proscribed here was drug promotion.” When she asked whether the First Amendment would require reversal if the jury was instructed that promotion is illegal, Letter responded (naturally) that there was no need to reverse because the regulations passed intermediate scrutiny under the Central Hudson test for restrictions on commercial speech.

5) On the core First Amendment issue, the judges expressed concerns about the vagueness of the regulatory scheme, as well as the seeming disconnect between the government’s stated purpose and the sweeping scope of that scheme. Right out of the box, Judge Raggi was all over Douglas Letter, asking where someone can look for clear guidance as to what a sales rep can or can't do. The government’s answer: the guidance put out by FDA “makes clear what manufacturers can do.” Judge Raggi followed up by questioning how that is a “standard” by which courts can decide whether a crime has been committed. A fine question, we might add, and one that the government tried to dodge by falling back on the “promotion is not a crime” mantra. And on the disconnect between the government’s stated interests and the regulatory scheme at issue, Judge Raggi again pushed Letter hard. If the government is concerned about a manufacturer “dilly-dallying” in its efforts to seek approval for an unapproved use, FDA could “put timetables” on the manufacturer. But, Judge Raggi said, “[t]he concept of completely precluding speech is one we look at with some concern. And so I’m not sure why this can't be much more narrowly tailored.” When Letter responded with the bugaboo of past experience – the horror story of widespread off-label use leading to “public health disasters” – Judge Raggi cut that argument off immediately, explaining that in such a situation, FDA could stop the sale of the product entirely, or otherwise limit its use. “But as long as you’re allowing the physician to prescribe it for off-label purposes… I think you have to agree that there’s a concern that more speech is generally better than less speech.” The government’s response to that? “Absolutely, Your Honor, I couldn't agree more.” We agree too.

So what’s going to happen in Caronia? A long time ago we learned that you can get burned when you try to predict an outcome based on questions asked at oral argument, but we'll give it a shot. Based on the transcript, we’d venture to say that the panel will reach the First Amendment issues, will reject the government’s argument that the First Amendment isn't implicated at all, and will tackle the overbreadth and vagueness problems pervading FDA’s regulatory scheme. We’d give an edge to the defendant on those arguments, but you probably could have guessed that by now. Stay tuned.