Government Takes A “Pass” on the First Amendment

Last week it was reported across the internet that the FDA would not seek to appeal the Second Circuit’s majority decision in U.S. v. Caronia to the Supreme Court.  Admitedly, in the wake of  Caronia, I and other commentators were hopeful that the Government would seek a rehearing en banc — the Government even asked for an extension on the deadline to file the petition — and ultimately oral argument before the Supreme Court on the limits of its ability to regulate manufacturer speech.  However, that collective hope waned once the Government passed on an en banc rehearing.  Indeed, it soon became obvious that the ”best” course for the Government would be to avoid the risk of further adverse rulings, renew its campaign against weak-kneed manufacturers in off-label investigations outside the boundaries of the Second Circuit and focus its Supreme Court lawyering in other high-stakes areas, like “reverse payments” in patent Hatch-Waxman settlements.  If the Government follows through on its reported January 22nd “statement” – no official statement was ever published to this writer’s knowledge – and fails to appeal Caronia to the Supreme Court by the March 4, 2013 deadline, the answer to the question ”what now?” becomes dicey for manufacturers.

According to the FDA’s reported statement,  it ”does not believe that the Caronia decision will significantly affect the agency’s enforcement of the drug misbranding provisions” of the federal drug laws.  In fact, “[Caronia] does not strike down any provision of the [FDCA] or its implementing regulations, nor does it find a conflict between the act’s misbranding provisions and the First Amendment or call into question the validity of the act’s drug-approval framework.”  Fair enough.   As discussed in my previous posts about the impact of Caronia and whether there is room for a First Amendment Safe Harbor for Off-Label Speech, Caronia’s ruling was narrow in that it neither precluded the use of off-label promotion to prove intent to sell off-label, nor sanctioned any off-label speech that wasn’t 100% truthful, accurate and non-misleading.  But even with these limitations and the Government’s seemingly stoic reaction to its first serious defeat on the legality of off-label promotion, Caronia puts the brakes on two previously unencumbered areas of enforcement.

First, the Feds can pretty much forget about criminally prosecuting Caronia (on re-trial) or any other individual for promoting off-label, at least in the absence of outrageously false and misleading claims that, as anybody in this business knows, is unnecessary and counter-productive.  Second, since it is difficult if not impossible to prove off-label intent without complete reliance on off-label promotion, the Government will now be forced to “find” evidence of kickbacks, false government price reporting, fraudulent billing, or some similar conduct to get around a Caronia First Amendment defense.  While a criminal defendant can always raise a First Amendment defense to off-label promotion based on Caronia, the Government will be in much better shape if it can pin the defendant with other “bad” conduct.

And then there’s the problem of the best defense being a good offense.  While most commentators were quick to point out that an unappealed Caronia is limited to the boundaries of the Second Circuit (i.e., New York, Connecticut and Vermont), leaving the Government – particularly, the U.S. Attorney’s Offices in Boston, Philadelphia and elsewhere — with plenty of room to go back to business as usual, I see it differently.  If my client were under investigation for off-label promotion, I would advise the client to strongly consider filing a declaratory judgment and injunction action in New York, where the FDA has regional offices and where Caronia is binding.  In my view, unless the Government plans on closing down its New York FDA offices and stop doing busines there altogether, it’s going to have a hard time gerrymandering around Caronia.

Look, I realize (as do most commentators) that it will be difficult for the Government to convince the Supreme Court to overturn a holding that truthful, accurate and non-misleading promotion of off-label use is constitutionally protected commercial free speech, and that if the High Court were to affirm Caronia, the Government would find it next to impossible to avoid drafting guidance on a First Amendment-based safe harbor for off-label promotion, as I discussed in my last post — something it surely doesn’t want to do.  I also realize that the Government can always continue bullying publicly traded manufacturers into settling and paying large fines notwithstanding Caronia and that (speaking cynically) there is too much money at stake for the Government to walk away from.  And, I further realize that to the extent it is ever faced with another First Amendment challenge, the Government would prefer to go to the Circuit and Supreme Court on better facts than those presented in Caronia.   All this may be very true.  Nonetheless, if someone from the Government is reading this — perhaps one you out there can forward this post to someone you know in the Government — putting aside what might be the legally shrewd decision if made by a private litigant, wouldn’t the “right” and “just”  decision from the Department of Justice be to take back whatever statement was made last week by the FDA about not appealing Caronia, seek Supreme Court review, and work to bring clarity to this very unsettled and murky area of jurisprudence sooner rather than three, four or several years down the road?

There’s still time.  Just think it over.

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 .

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