Caronia Decided — First Amendment Protects Off-Label Speech!

It finally happened.  After two long years (plus one day) since oral argument, the U.S. Court of Appeals for the Second Circuit in a 2-1 split vote decided U.S. v. Caronia, tossing Alfred Caronia’s misdemeanor conviction for engaging in off-label promotion.  The former Orphan/Jazz Pharmaceuticals sales rep had argued that in promoting Orphan’s Xyrem for unapproved uses, he did not speak untruthfully, inaccurately or in a misleading manner and that his conviction under 21 U.S.C. Sections 331(a) and (a)(1), therefore, violated his right of free speech under the First Amendment. Fortunately for Caronia — and perhaps even more fortunately for pharmaceutical and medical device manufacturers, battered by billions in fines – two federal circuit judges agreed.  Unfortunately, the fight is probably far from over.

As some may recall from prior posts on this blog dealing with the Caronia appeal and the Par litigation, Caronia and Dr. Peter Gleason (now deceased) had been charged with conspiring with Orphan to promote Xyrem, a powerful depressant known as the “date rape drug,” for various off-label purposes.  Although the trial record showed that Caronia and Gleason were caught on tape speaking to a physician (who was cooperating with the Government) about various off-label uses, and even though Gleason and Orphan had pleaded guilty, Caronia fought the charges, arguing that because his off-label promotion was truthful, accurate and non-misleading, it was constitutionally protected.  While the trial court recognized that off-label promotion implicated speech, it denied Caronia’s motion to dismiss and he was later convicted. Although Caronia quickly filed an appeal, it appeared to this writer that the prospects of getting a federal court to finally decide the constitutional merits of truthful off-label promotion (either in Caronia or Par) were growing dim.  In light of yesterday’s decision, however, Par and other manufacturers appear to have significantly more leverage in negotiations with the Government going forward — at least for now.

In his majority opinion, Judge Chin first reviewed the FDA’s regulatory regime, its supposed use of speech as evidence of a manufacturer’s  ”objective intent” of the drug’s use (i.e., the “intended use” regulation under 21 C.F.R. Section 201.28),  and the criminal penalties and billions in fines collected from pharmaceutical companies.  In addressing the Government’s argument that the FDA regulations don’t criminalize speech, but only use off-label promotion as evidence of objective intent to sell off-label, the majority responded that in Caronia’s case “the government has treated promotional speech as more than merely evidence of a drug’s intended use — it has construed the FDCA to prohibit promotional speech as misbranding itself.”  The majority went to great lengths to point out that whatever merit there might be to the Government’s ”evidence-only” argument, during Caronia’s trial the Government repeatedly (“over forty times” on summation and rebuttal) referenced Caronia’s off-label promotion as proof of misbranding and noted that the trial court erroneously equated off-label promotion with misbranding in its jury instructions.  Thus, while agreeing with the Government that the FDA regulations don’t specifically prohibit truthful off-label promotion, and while implicitly leaving room for the Government in a future case to prove off-label intent without relying exclusively on off-label speech, such was not the case here.

Once it determined that Caronia’s conviction rested entirely on his off-label speech, the majority applied the standards set forth in Sorrell v. IMS Health, Inc., 131 S. Ct. 2653 (2011) and Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y.,447 U.S. 557 (1980) to vacate the conviction.  In arriving at its decision, the majority reasoned that because the FDA regulations effectively regulated “content,” by favoring on-label speech and disfavoring off-label speech, and discriminated among speakers, by penalizing manufacturers and not penalizing physicians, academics and others, the Court was required to apply “heightened scrutiny” to the regulations.  Under the heightened scrutiny standard, the majority found that, while the Government had substantial interests in ensuring drug safety, public health and the effectiveness and integrity of the FDA drug approval process, the FDA’s off-label regulations neither directly advanced those interests nor were narrowly drawn to further the interests served.   For example, the majority noted numerous examples of less restrictive regulations that could effectively advance the Government’s interests, including “warning or disclaimer systems” that could alert physicians that certain uses have not been FDA-approved.

In her dissent, Judge Livingston took the Government’s view that what was at issue was Caronia’s intent that Xyrem be used off-label and that Caronia’s off-label speech could have been properly used as evidence of his intent to sell off-label without implicating the First Amendment.  As she noted in the opening paragraph of her dissenting opinion, “By holding, instead, that Caronia’s conviction must be vacated — and on the theory that . . . he was in fact convicted for promoting a drug for unapproved uses, in supposed violation of the First Amendment — the majority calls into question the very foundations of our century-old system of drug regulation.”

The opposing views of the majority and dissent clearly lay out the battle lines for the all but certain upcoming arguments before an en banc court and/or the Supreme Court.  From the dissent’s and the Government’s perspecitve, the stakes couldn’t be higher:  if left to stand, the majority opinion drives a stake into the heart of the Government’s decade-plus campaign to stifle manufacturer speech related to off-label use.  The fact that the Government remains free to pursue manufacturers for “untruthful” off-label speech, or to prove off-label intent using evidence other than speech, provides Government regulators with little comfort.  They have to appeal, which means that sooner or later the Supreme Court is going to decide this issue.  Although I’ve been wrong with other predictions (e.g., that the Supreme Court would strike down the individual mandate in ”Obamacare”), I’m betting I’m right this time and that the FDA off-label regulations as currently written and enforced won’t survive.

To read more about this, visit:

About Jose Sierra

José P. Sierra is a Principal in the Boston and Delaware offices of Fish & Richardson. Prior to joining the firm, Mr. Sierra was Senior Vice President, Chief Compliance and Ethics Officer for Sepracor Inc., a specialty pharmaceutical company. Earlier in his career he held positions as Vice President, Chief Compliance and Ethics Officer for Kos Pharmaceuticals, Inc., Legal Director at Schering-Plough Corporation, and Assistant U.S. Attorney in the U.S. Attorney’s Office in Newark, New Jersey.

Mr. Sierra works in the firm’s pharmaceutical and medical device industry practices focusing on litigation, government investigations, qui tam/whistleblower defense, compliance, and risk management. Contact him at 617-956-5926 or via .

Speak Your Mind