Pharmaceutical and medical device companies will applaud the Second Circuit’s reversal this week of the conviction of a sales representative for conspiracy to introduce misbranded drugs into interstate commerce. United States v. Caronia, Docket No. 09-5006-cr (2nd Cir., Dec. 3, 2012). In Caronia, the Court found that Mr. Caronia’s truthful statements about off-label uses for the pharmaceutical Xyrem were protected under the First Amendment. Continuing a trend established in prior cases, the government had prosecuted Mr. Caronia under the “misbranding” provisions of the Food Drug and Cosmetic Act (FDCA), forcefully arguing that the government must curb off-label promotion to prevent patient harm that can be caused by zealous corporate over-promotion of products without proof of safety and efficacy.

Mr. Caronia countered that it makes no sense to penalize companies for providing health care providers with truthful information about product use. Indeed, it is completely legal for physicians to prescribe medicine for off-label uses, and, by some estimates, one-third of all prescriptions are written for off-label purposes. Recognizing that physicians will share information about their experiences with off-label product uses, FDA policy allows pharmaceutical companies to respond to unsolicited requests for information from health care providers and penalizes only proactive “promotion” of off-label uses. (See FDA, Guidance for Industry: Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices, 76 Fed. Reg. 82303). In this context, the Second Circuit reviewed Mr. Caronia’s truthful statements and held under the First Amendment that “the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of an FDAapproved drug.”

Mr. Caronia’s Protected Free Speech

Mr. Caronia was caught on tape promoting the drug Xyrem for off-label uses, including the treatment of excessive pain associated with fibromyalgia. Because Xyrem was approved by the FDA to treat only certain narcolepsy patients, the government charged Mr. Caronia with two misdemeanor counts of introducing a misbranded drug into commerce and conspiracy to introduce a misbranded drug into commerce in violation of 21 U.S.C. §§ 331(a) and 333(a)(2). Echoing its argument years earlier in Washington Legal Foundation v. Henney, 202 F.3d 331, 336 (D.C. Cir. 2000), the government in Caronia denied it was attempting to regulate speech. Rather, it claimed to introduce Mr. Caronia’s off-label promotional speech simply as evidence of his intent to conspire to sell a misbranded drug. After a jury trial, Mr. Caronia was found guilty and sentenced to one year of probation, 100 hours of community service and a $25 special assessment.

On appeal, the majority relied heavily upon the recent United States Supreme Court decision Sorrell v. IMS Health, which found that “[s] peech in aid of pharmaceutical marketing . . . is a form of expression protected by the Free Speech Clause of the First Amendment.” 131 S. Ct. 2653, 2659 (2011). Sorrell addressed whether a pharmaceutical company can be restricted from using prescription data for marketing purposes when doctors and other parties are permitted to use the same data. Id. Closely following the Sorrell analysis, the Second Circuit in Caronia found that the FDCA’s misbranding provision must be subject to heightened scrutiny because it is a content- and speaker-based restriction and involves a criminal penalty. Under the four-pronged Central Hudson analysis (447 U.S. 557 (1980)), the Court held that the FDA misbranding regulations are too broad to support the government’s objective of promoting drug safety and public health and that government interests can be served equally well through more limited and targeted restrictions on speech. Accordingly, the Court held that the misbranding provisions of the FDCA may not prohibit or criminalize “the truthful off-label promotion of FDA-approved prescription drugs.”

In dissent, Judge Livingston relied upon prior Supreme Court precedent that the “First Amendment . . . does not prohibit the evidentiary use of speech to establish the elements of a crime or to prove motive or intent.” Wisconsin v. Mitchell, 508 U.S. 476, 489 (1993). However, the majority rejected this argument, citing numerous statements in the record through which the government equated Mr. Caronia’s speech with a violation of the FDCA, not simply evidence of a violation.

Uncertainties Remaining after Caronia

Despite the helpful clarifications in Caronia regarding when off-label promotion may be protected as opposed to criminal, some ambiguity remains. Caronia protects “truthful” speech in the context of off-label promotion of FDA-approved prescription drugs. But proving the scientific “truth” of a statement regarding the safety or efficacy of a product used for off-label purposes might present challenges for defendants. The Court cautioned that “some off-label information could certainly be misleading or unhelpful” and underscored that “this case does not involve false or misleading promotion.” In a footnote, the Court went a step further, 4stating “[o]f course, off-label promotion that is false or misleading is not entitled to First Amendment protection” and “under 21 U.S.C. § 331(a), a defendant may be prosecuted for untruthfully promoting the off-label use of an FDA-approved drug.” Therefore, it is far from clear that the decision will cause the FDA to change course. It may instead lead to a greater focus on the scientific accuracy of the statements made, rather than simply whether the use discussed was off-label.

This week, the Ninth Circuit Court of Appeals is considering a case in which a biotech company executive, Scott Harkonen, appeals on First Amendment grounds his conviction for wire fraud for including a questionable scientific opinion in a press release. It is important for companies to consider the changing legal landscape in this complex area and to recognize that for the moment, Caronia is only binding precedent in the Second Circuit. Thus, it would be premature and unwise for companies to become less vigilant in policing the off-label statements that may be made by sales representatives.