FDA LOSES LANDMARK OFF-LABEL PROMOTION DECISION
---------- Forwarded message ----------
From: Marty Hinz MD <marty@hinzmd.com>
Date: Wed, Dec 5, 2012 at 7:25 PM
Subject: MAJOR NEWS: FDA Loses Landmark Off-Label Promotion Decision
This one is a potential game changer (still needs to go to the US Supreme Court next year). I received the following e-mail today from my FDA law firm. My opinion is that the FDA has been ceasing control of all the power it can get its hands on then stuffing it in a bag. Sooner or later the bag will burst. Looks like a big seam rip of the bag is going on here.
Marty Hinz, MD
Dear Clients & Friends of the Firm,
Court Delivers Blow to FDA Position On Off-Label Promotion
Monday, December 3, in a breakthrough 2-1 ruling, the United States Court of Appeals for the Second Circuit reversed the conviction of a sales representative for his alleged crime of off-label promotion of a drug. We have attached the 82-page opinion for your perusal. In sum, the judges ruled that the FDA unlawfully restricted the sale representative’s First Amendment free speech rights under the U.S. Constitution.
Our first reaction is that the government has lost yet another First Amendment case. This case is a potential game-changer; “potential” because the government will appeal it. We need to study the implications further and get back to you with a deeper analysis. For now we can say that Caronia should be sending a shockwave through the Food and Drug Administration (FDA), the Office of Inspector General (OIG) and Department of Justice (DOJ). Just like the Washington Legal foundation case back in 1997, we were surprised by this ruling. However, this ruling goes much farther than the WLF decision. The court makes an interesting distinction that the government has imposed an unconstitutional content-based restriction that favors on-label uses over off-label uses even though off-label use by a physician is lawful. It also said the government inappropriately placed speaker-based restrictions that prohibit pharmaceutical manufacturers from speaking while allowing others, such as physicians and academics, to speak freely about off-label uses (see the court’s quote below).
Facts
The United States v. Caronia case, which has been followed closely by legal scholars leading up to yesterday’s decision, involved a sales representative, Alfred Caronia, at Orphan Medical, Inc., now known as Jazz Pharmaceutical, who promoted a drug, Xyrem, for intended uses not approved by FDA. This is called “off-label” promotion, and it is a violation, called “misbranding,” under the FDCA. The government prosecuted the sales representatives’ conduct as a criminal conspiracy. The drug was approved for narcolepsy, but Mr. Caronia was caught on tape by the government, promoting the drug for fibromyalgia, chronic fatigue, chronic pain among other unapproved uses. We encourage our clients to pause and reflect on this point—the government utilized a government informant in this case, a physician named Dr. Stephen Charno, who posed as a prospective Xyrem customer. A conversation between Dr. Charno and Mr. Caronia was tape-recorded. Here is part of that dialogue published in the opinion, it shows clear promotion for off-label uses not found in the drug label, but uses for which physicians can lawfully use the drug:
[Caronia]: And right now the indication is for narcolepsy with cataplexy . . . excessive daytime . . . and fragmented sleep, but because of the properties that . . . it has it's going to insomnia, Fibromyalgia[,] periodic leg movement, restless leg, ahh also looking at ahh Parkinson's and . . . other sleep disorders are underway such as MS.
[Charno]: Okay, so then so then it could be used for muscle disorders and chronic pain and . . .
[Caronia]: Right.
[Charno]: . . . and daytime fatigue and excessive sleepiness and stuff like that?
[Caronia]: Absolutely. Absolutely. Ahh with the Fibromyalgia.
Mr. Caronia was convicted in 2008 and he then appealed.
The Existing Law and The Caronia Decision
Under law and FDA policy physicians are free to use drugs off-label, and manufacturers can “disseminate” off-label information pursuant to an FDA guidance document entitled, “Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices—January 2009,” hereinafter called the “Reprint Guidance,” but long-standing FDA policy bars companies from “promoting” drugs off-label, even if the promotional claim is truthful. The Court took issue with the latter half of this policy. The Second Circuit wrote, “Caronia argues that he was convicted for his speech -- for promoting an FDA-approved drug for off-label use -- in violation of his right of free speech under the First Amendment. We agree.” In other words, the sales representative was convicted for speech, which the court deemed lawful under the First Amendment. The Court ruled that Mr. Caronia is entitled to First Amendment rights which grant him the freedom to promote truthful “lawful” off-label uses. The following language from the court’s opinion illustrates its holding:
Accordingly, even if speech can be used as evidence of a drug's intended use, we decline to adopt the government's construction of the FDCA's misbranding provisions to prohibit manufacturer promotion alone as it would unconstitutionally restrict free speech. We construe the misbranding provisions of the FDCA as not prohibiting and criminalizing the truthful off-label promotion of FDA-approved prescription drugs. Our conclusion is limited to FDA-approved drugs for which off-label use is not prohibited, and we do not hold, of course, that the FDA cannot regulate the marketing of prescription drugs. We conclude simply that the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of an FDA-approved drug. [Emphasis added.]
The court went on to discuss the issue of government content- and speaker-based restrictions on speech:
First, the government's interpretation of the FDCA's misbranding provisions to prohibit off-label promotion is content-based because it distinguishes between "favored speech" and "disfavored speech on the basis of the
ideas or views expressed."… Under this construction, speech about the government-approved use of drugs is permitted, while certain speech about the off-label use of drugs -- that is, uses not approved by the government -- is prohibited, even though the off-label use itself is not.
Second, this construction is speaker-based because it targets one kind of speaker – pharmaceutical manufacturers -- while allowing others to speak without restriction. Similarly, here, because off-label prescriptions and drug use are legal, the government's application of the FDCA permits physicians and academics, for example, to speak about off-label use without consequence, while the same speech is prohibited when delivered by pharmaceutical manufacturers. See 21 U.S.C. §§ 331(a), 333(a). This construction "thus has the effect of preventing [pharmaceutical manufacturers] -- and only [pharmaceutical manufacturers] -- from communicating with physicians in an effective and informative manner."
The issue is whether the FDA will appeal this matter and put this issue into play with the United Sates Supreme Court. Right now it could argue this is the decision of only one Circuit Court, and a three-judge panel at that. But, if the FDA lost at the Supreme Court it would be the law of the land, and FDA would lose significant ground from an enforcement standpoint.
Where Do We Go From Here?
If the Supreme Court were to hear and uphold this case, then FDA’s current regulatory scheme regarding off-label dissemination and prohibition against promotion may be unconstitutional. We have always felt that FDA’s current Reprint Guidance was a well-intentioned attempt by FDA to put into place guidance after section 401 of the Food and Drug Administration Act (FDAMA) sunset in September of 2006. The Reprint Guidance does not recognize enough medical and scientific information as being entitled to free speech protection. FDA tries to define it as being limited to peer-reviewed journal articles from adequate and well-controlled studies (with some exceptions). We have believed that FDA’s definition may be too restrictive as lesser forms of medical and scientific information should qualify for First Amendment protection and, therefore, dissemination. But this case goes much further than our thoughts on off-label dissemination as it shakes the foundations for FDA’s current position on off-label promotion.
This case goes even further than a discussion on lawful dissemination as it suggests that certain outright promotion of “lawful” off-label use of drugs and devices (and dietary supplements?) may qualify for First Amendment protection as well. Does this mean that FDA will be driven to approve products, but list other conceivable off-label uses as explicit contraindications, so that these potential off-label uses carry an unapproved, non-lawful status? This may be the way FDA may try to address the effects of this decision and control of off-label usage. Arguably by listing other uses as essentially unlawful, off-label uses, FDA retains its ability to prevent off-label promotion of those uses. But the use would also have to be outlawed for physicians—a politically controversial thought. This case will take some time to sort out.
Up until now the government has used off-label promotion to extract large, sometimes multi-billion dollar, settlements from manufacturers. Most recently, GlaxoSmithKline entered a $3 billion settlement with the government for off-label promotion, among other violations. Pfizer settled in 2009 for $2.3 billion. States have also been suing companies, extracting multi-million dollars settlements, for similar “crimes.” Shareholders of these companies might want some of that money back. Not likely. But it does put into question whether companies should be defending themselves more vigorously using these First Amendment arguments. The problem is that FDA leverages the pressure on shareholder value, bad publicity and potential criminality to obtain these settlements. And these cases always involve more facts than a case with a sales representative making claims.
We are still digesting this decision and will issue a more detailed Client Alert in the future. Caronia seemingly has an enormous impact on the law, but the conclusion should not be over-read just yet. It may have a muted impact on the way FDA-regulated companies, such as big drug, device, biologic and device companies do business in the short to medium term. Companies will still have other statutes, like the False Claims Act and product liability, to consider. FDA also may find other ways to prosecute cases given the precise and unique contours of this opinion. The decision is frankly both remarkable and yet a bit confusing and nuanced. More in-depth analysis is required before companies allow sales representative to commence off-label promotion. Companies will also be watchful as other federal circuit courts could make a different decision based upon the same set of operative facts. But it is a step in the right direction and should give the federal government pause.
Best regards,
DuVal & Associates, P.A.
DuVal & Associates
Drug, Device and Food Law
DuVal & Associates, P.A.
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Minneapolis, MN 55402
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Best of Health,
Pauline Harding
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