Given the Government’s dogged pursuit of the pharmaceutical industry for engaging in off-label promotion, and the billions of dollars the industry has forked over in recent years for False Claims Act “violations,” should federal prosecutors be worried that the off-label gravy train may be about to be de-railed by the First Amendment? You bet.
The Stakes: No other relatively untested and unchallenged legal theory has ever generated more money for any litigant (public or private) than the Government’s theory on the illegality of off-label promotion. Over the course of the last decade, the Government has raked in about $13 billion in civil and criminal settlements – including $1.4 billion from Eli Lilly (Zyprexa) and $2.3 billion from Pfizer (Bextra) in 2009. In just the last few weeks, we have learned that the Government will get $950 million from Merck (Vioxx), $1.5 billion from Abbot Labs (Depakote) and $3 billion from GlaxoSmithKline (Avandia). These settlements have all been predicated on the interesting notion that, while it is perfectly legal and proper for physicians to prescribe drugs for non-FDA approved (i.e., off-label) uses, it is criminal for the makers of those drugs to talk to those same physicians about those same off-label uses.
So far, the Government has either cavalierly dismissed arguments that the FDA’s off-label rules violate free speech rights, or has deftly maneuvered around them, as when it forced Allergan to dismiss its First Amendment based lawsuit as a condition of settling (for $600 million) a large, costly investigation. Now, things look like they are about to change.
The Caronia Appeal. In 2010, Alfred Caronia, a former sales rep with Orphan Pharmaceuticals, appealed on First Amendment grounds his 2009 federal misdemeanor conviction for promoting Xyrem, an Orphan (now Jazz Pharmaceuticals) narcolepsy drug, for off-label uses. Although Xyrem was approved in July, 2002 to treat narcolepsy associated with cataplexy, Caronia was convicted of promoting Xyrem to treat a particular type of narcolepsy (known as “excessive daytime sleepiness”) prior to its approval for that use by the FDA in November, 2005. (See Superseding Indictment). Despite the Government’s attempt to dodge Caronia’s First Amendment challenge that the FDA’s off-label rules amounted to bans on content-based and speaker-based speech, the skeptical questions coming from the U.S. Second Circuit judges hearing the appeal should have given the Government plenty of reason to be concerned. Those concerns must have been heightened, when the court asked both sides this past Summer for supplemental briefs to address the U.S. Supreme Court’s June 23, 2011 decision in Sorrell v IMS Health. In that case, the Supreme Court struck down, on First Amendment grounds, a Vermont law prohbiting companies from gathering and selling physician prescriber data to pharmaceutical companies — a decision that Justice Breyer noted in dissent opened a “Pandora’s Box of First Amendment challenges” to longstanding FDA regulations.
What’s Next? As we wait for a ruling from the Second Circuit, we will also be following the suit and injunction motion that Par Pharmaceuticals filed against the FDA in October, also challenging the constitutionality of the FDA’s off-label rules. (See Complaint). Whether it is Caronia or Par that decides the outcome, the betting here is that the courts will soon be changing the world of off-label as we know it.