12.12.2012 The First Amendment Trumps the FDA – For Now



On December 3, 2012, the U.S. Court of Appeals for the Second Circuit issued a 2-1 decision vacating Alfred Caronia’s misdemeanor conviction for off-label promotion of Xylem in violation of the Food, Drug and Cosmetic Act (“FDCA”) and 21 U.S.C. §§ 331(a) and (a)(1). As noted by one senior prosecutor in a state Medicaid Fraud Control Unit, “This opinion, should it withstand further review, could indeed be very problematic to the MFCUs and the entire FDA regulatory scheme.”


The majority adopted the defendant’s position as well as that espoused by “The Medical Information Working Group,” an industry group made up of some of the largest publicly traded pharmaceutical companies in the world. They contended that, where FDCA guidance recognizes that doctors may properly prescribe drugs for uses other than those for which they have been approved and labeled, marketing staff may make truthful statements about the unapproved benefits and uses of the same drugs as part of their sales pitch.


Caronia was a sales representative for Xylem’s manufacturer, Orphan/Jazz. As part of his duties, Caronia marketed the drug to doctors and noted the various benefits, including for unapproved uses. He and two others were charged , and, while the other two defendants pleaded guilty, Caronia was convicted at trial. Caronia argued that, because he did not mislead or provide untruthful information, his statements were protected by the First Amendment. On appeal Judge Chin, writing for the majority, observed that while the prosecution and the FDA contended the regulatory regime prohibits off-label promotion by pharmaceutical manufacturers, the draft guidance does not expressly prohibit or criminalize that conduct. He summarized the Court’s holding, “[W]e decline the government’s invitation to construe the FDCA’s misbranding provision to criminalize the simple promotion of a drug’s off-label use by pharmaceutical manufacturers and their representatives because such a construction – and a conviction obtained under the government’s application of the FDCA – would run afoul of the First Amendment.”


Although this long-awaited decision is a clear victory for the pharmaceutical industry, that victory may be short-lived. Given the Court’s literal reading of the FDCA, one dissenting judge and the loss by the government of one of its most powerful enforcement tools, this matter may be destined for an en banc hearing and a different outcome. This decision could also affect False Claims Act (“FCA”) cases where the government and whistleblowers have long argued that off-label promotional statements are evidence of intended use for an unapproved purpose and, thus, support an allegation of a false certification under the FCA.


In the meantime, pharmaceutical companies, their sales staff and the entire medical industry should take note. What is and is not permissible marketing activity, and what conduct may constitute a false claim, are in flux. But, for now, the Second Circuit has spoken.