My how things change. At the beginning of this year the Government was worried that Par Pharmaceutical’s legal challenge to the constitutionality of off-label marketing might cripple its efforts to collect billions of dollars from Big Pharma through criminal and civil enforcement of the FDA’s off-label rules. Last week the Government and GlaxoSmithKline announced that the company had agreed to pay $3 billion in criminal and civil fines related in large part to off-label promotion of several GSK drugs in the largest health care fraud settlement in U.S. history. But, while the GSK settlement grabbed all the headlines, the Government continued to quietly negotiate an assuredly more modest settlement with Par, the consummation of which will undoubtedly involve a much bigger prize for the Feds than a billion dollar fine: the silencing of free speech.
Okay, so maybe “the silencing of free speech” line is a bit of over the top, but if the outcome of Par’s and the Government’s joint request to extend the stay of their litigation results in a dismissal of Par’s suit, it is the Government that will reap the benefit of defeating yet another First Amendment challenge to its draconian view (in my opinion) that all manufacturer speech that results in greater off-label use is illegal. (As noted in earlier posts here and here, in Par the speech at issue was on-label, but was directed to physicians in settings where most prescriptions would be used off-label). The Government squashed a similar off-label challenge in 2010, when it got Allergan to drop a similar suit as part of a $600 million settlement.
While it is true that there is still hope that the Second Circuit may reach the First Amendment issue in the Caronia case, read here, the facts in that case are not as appealing as the facts in Par — Caronia and his co-conspirator, the late Dr. Peter Gleason, were charged with telling physicians how to hide their off-label use for billing purposes in order to avoid issues with reimbursement. Perhaps these less than sympathetic facts explain why we are rapidly approaching the two-year anniversary of Caronia’s appeal with no sign of a decision.
The bottom line is that bad facts don’t usually generate good law and prosecutors have less concern flexing their muscles when the facts look more like Caronia and less like Par. Such was the warning that a panel of federal prosecutors gave on June 25th to an audience of mostly pharmaceutical and medical device compliance officers at an off-label conference in New York. As a conference attendee, I was disturbed at seeing and hearing the finger-waving and bullying tone some of the panelists took at a group of compliance professionals who were at the conference precisely because they want their companies to be compliant and are willing to toe the Government’s line. Although the self-righteous lecturing was bad enough, the most offensive comment came from one of the least offensive panelists when in a moment of complete candor she admitted that she and her comrades ask for and should be given more resources to go after industry because they are a “profit center” for the federal government. A “profit center?!” Really?!
Call me crazy, but it strikes me as deeply troubling that some of the same people who are desperate to shut down constitutional legal challenges to their practices consider themselves a profit center for the federal government, when the source for those profits are multi-million and multi-billion dollar fines extracted from a private sector industry that is critical both to medical advancement and the American economy. Now, before anyone jumps to the conclusion that I am just an industry apologist, let me say now that I find it very hard to feel sorry for industry, especially Big Pharma. After all, how can anybody feel sorry for a group that bent itself into a pretzel working with the current administration – and which, according to the current Congress, engaged in unsavory backroom deals with the White House – to get the Affordable Care Act passed, only to find itself as perhaps one of the biggest losers following the Supreme Court’s decision upholding the law’s constitutionality. (I’ll explain why in another post).
Unfortunately, all my rants will amount to nothing more than just that unless negotiations in Par breakdown (a real long shot), we get a good majority or dissenting opinion in Caronia (still keeping my fingers crossed), or another company with guts and conviction tells the Government: “enough” (another long shot). Until one of these things happen, we can expect more preaching from the Feds and more fines going to their “profit center.”
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