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United States v. Caronia and Its Implications for Off-Label Marketing of Pharmaceuticals

Off-label drug use is the physician practice of prescribing drugs to patients for a purpose not included on the Federal Drug Administration-approved label. Recent studies have indicated that nearly a quarter of drug prescriptions are “off-label” in nature.1 At least 79% of off-label prescriptions are made without support from “strong scientific evidence.”2 Despite the prominent use of off-label prescriptions and the perceived lack of scientific evidence for their use, pharmaceutical manufacturers have long been pro­hibited from educating physicians regarding the potential benefits of off-label uses for their drugs. In fact, the Department of Justice has appropriated billions of dollars in plea deals and settlement agreements from pharmaceutical manufacturers for impermissibly marketing off-label uses of their drugs. In a recent potentially groundbreaking decision, however, the Second Circuit has opened the door for such efforts to be protected from criminalization on the grounds that off-label commercial marketing is protected under the First Amendment. If the Second Circuit’s decision stands and is adopted by other jurisdictions, a framework will be laid to permit pharmaceutical manufacturers to market truthful, scientifically supported off-label benefits of their products.

A. Current Regulatory Framework of Off-Label Marketing

The Federal Food, Drug, and Cosmetic Act (FDCA) governs the introduction of new pharmaceuticals into the marketplace.3 Prior to the distribution and sale of any new drug, a manufacturer must demonstrate through clinical trials the safety and effectiveness of the proposed drug.4 The Food and Drug Administration (FDA) will then approve the pharmaceutical for specific uses and/or demographics.5

The FDCA explicitly authorizes physicians to prescribe drugs for off-label uses, either through varying dosages, treatment modalities, or for diseases and conditions not originally contemplated in the FDA trials.6 The FDA has recognized the potential public value of unapproved drug use, and often these off-label uses are subjects of medical literature and publications and supported by a significant portion of the medical community. In other instances, however, off-label prescriptions and uses are given with little documented support or scientific justification. Some commonly prescribed off-label medications are in need of additional study to determine whether their off-label uses are appropriate and beneficial.7 Despite this cloud of potential misinformation, pharmaceutical manufac­turers are generally not permitted to educate physicians regarding any potential benefits of off-label use.8

While the FDCA authorizes the prescription of pharmaceuticals by physicians for unapproved treatments, the FDCA and FDA regulations have criminalized the promotion and marketing of those same off-label uses by pharmaceutical companies. Specifically, the FDCA prohibits “misbranding,” or “[t]he introduction or delivery for introduction into interstate commerce of any […] drug […] that is […] misbranded.”9 Such misbranding occurs when a product fails to bear adequate directions for use for the purposes for which it is intended.10 Such misbranding includes “oral or written statements” by “persons legally responsible for the labeling of drugs.”11 Some proponents of off-label drug marketing have argued that the FDA, in effect, “increasingly criminaliz[es] ‘what reasonable people might argue is a reasonable exchange of important clinical information between drug companies and doctors.’”12

B. Regulatory Framework Has Resulted in Significant Prosecutions for Off-Label Marketing

In recent years, the FDA and the Department of Justice has repeatedly prosecuted, levied significant fines, and reached multimillion-dollar plea deals with pharmaceutical manufacturers for impermissible off-label marketing.13

In 2012, drug manufacturer GlaxoSmithKline agreed to pay a $3 billion fine in the largest healthcare settlement in United States history.14 Included within an array of charges levied against GlaxoSmithKline was the alleged promotion of the antidepressant Paxil for children and adolescents even though it only had FDA approval for adult use. Compounding GSK’s potential exposure were medical studies that had found Paxil ineffective and potentially dangerous for children. GSK was also charged with marketing Wellbutrin, FDA-approved as an anti-depressant, for weight loss, the treatment of sexual dysfunction, and substance addictions.

In 2009, pharmaceutical giant Pfizer reached a $2.3 billion settlement with the Department of Justice to resolve criminal charges and civil claims related to off-label marketing of a then discontinued pain-reliever, Bextra, as well as several other medications.15 Pfizer was found, among other marketing activities, to have published a press release touting Bextra as an effective analgesic after knee surgery. Bextra, however, was not approved for post-surgery pain. The size of Pfizer’s penalty was based both on Pfizer’s marketing efforts as well as its recidivism — Pfizer had been previously fined on several occasions for the marketing of off-label uses for its drugs.

In light of significant continuing prosecutions by the federal government, some medical device and pharmaceutical companies have begun both to challenge and seek exception from the government’s authority to bring enforcement actions under the FDCA. In October 2009, Allergan Inc. sued the FDA claiming that its off-label marketing was protected as free speech under the First Amendment.16 The thrust of Allergan’s suit was that the FDA’s enforcement prohibited manufacturers from communication with physicians regarding safe and effective off-label uses. Allergan considered itself caught in an unwinnable position — if it knew that one of its medications was being prescribed off-label in a potentially unsafe manner, it would either expose itself to negligence liability by doing nothing, or it would expose itself to criminal liability if it educated physicians and provided appropriate directions for off-label use. Allergan ultimately abandoned its suit as part of a $600 million settlement with the DOJ over Allergan’s alleged off-label marketing of Botox.17

In July 2011, seven drug and device manufacturers, including Allergan, petitioned the FDA for greater clarification on the scope of permissible and impermissible off-label directions of use.18 The petition stated that the “lack of clarity and vagueness surrounding the contours of permissible manufacturer speech has significant consequences to manufacturers, the government, physicians, and patients,” that manufactur­ers expend “substantial resources” attempting to interpret and comply with FDA regulations, but despite their best efforts, “each individual manufacturer may either over or under communicate clinically relevant information, with significant attendant consequences for the public health.”19

C. United States v. Caronia

In 2005, the Department of Justice began investigating pharmaceutical company Orphan Medical for its alleged off-label promotion of the drug Xyrem.20 Xyrem was a drug that received FDA approval in 2005 for treatment of narcolepsy patients who suffered from weak or paralyzed muscles related to their condition.21 As part of its approval process, the FDA required that Xyrem carry a black box warning — the most serious warning placed on prescription medication labels — that it was not approved for use in people under the age of 16 and had limited evidence of efficacy amongst elderly patients.22 The basis of this warning was Xyrem’s active ingredient GHB, a medication affecting the central nervous system that has been federally classified as the “date rape drug.”23

As part of its investigation, the federal government wire-tapped two conversations between Alfred Caronia, a sales representative with Orphan Medical, and physicians cooperating with the DOJ’s investigation.24 During those conversations, Caronia marketed Xyrem as a drug with possible uses for other muscle disorders such as fibromyalgia, restless leg syndrome, and Parkinson’s disease.25 Moreover, Caronia explicitly stated that Xyrem was an effective treatment option for patients under the age of 16 and over the age of 65.26 Mr. Caronia was indicted, along with his employer,27 for allegedly introducing a misbranded drug into interstate commerce in violation of 21 U.S.C. §§ 331(a) and 33(a)(2) by knowingly marketing and “misbranding” Xyrem for medical indications that were not approved by the FDA.28

As part of his defense, Caronia adopted the position previously taken by Allergan and moved to dismiss the charges against him on the grounds that his verbal marketing efforts were protected as free speech by the First Amendment.29 The trial court denied Caronia’s motion by concluding that the FDCA’s criminalization of Caronia’s off-label marketing was permitted under the commercial speech doctrine — speech regarding a commercial transaction that is not entitled to the same protections as other speech — “because the FDCA was not more extensive than necessary to achieve the FDA’s objectives.”30 Mr. Caronia took his case to trial where he was found guilty and sentenced to one year of probation, 100 hours of community service, and a twenty-five-dollar fine.31

Caronia appealed, arguing that the First Amendment protected off-label marketing 1) of an FDA-approved drug when 2) the off-label marketing was truthful and not misleading and 3) the use itself is not illegal and others, namely the prescribing physicians, are permitted to engage in the same activity.32 The DOJ took the position that Caronia’s speech “was not speech at all but was conduct evidence of intent to misbrand.”33

In a two-to-one decision, the Second Circuit Court of Appeals overturned Caronia’s conviction, not because it found the off-label marketing to be free speech, but because it found the statutory and regulatory framework of the FDCA did not actually criminalize off-label marketing.34 The court stated:

To the extent there is any ambiguity as to whether off-label promotion is tantamount to illegal misbranding, we construe the FDCA narrowly to avoid a serious constitutional question. As we now explain, we decline the government’s invitation to construe the FDCA’s misbranding provisions 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.35

D. Second Circuit’s Free Speech Analysis

The Second Circuit, in reaching its decision, relied heavily on the reasoning of the United States Supreme Court’s decision in IMS v. Sorrell, in which the Supreme Court first held that “[s]peech in aid of pharmaceutical marketing […] is a form of expression protected by the […] First Amendment.”36 As in Sorrell, the Second Circuit conducted a two-step inquiry: 1) whether the government regulation restricting speech was content- and speaker-based; and 2) whether the government had shown the restriction of speech was consistent with the First Amendment.37 The Second Circuit found that the FDCA’s misbranding provisions imposed content- and speaker-based restrictions subjecting the FDCA’s restrictions to heightened scrutiny and concluded that “the government cannot justify a criminal prohibition of off-label promotion […].”38

Continuing its Sorrell-based analysis, the Second Circuit then analyzed the FDCA’s restriction on commercial speech under Central Hudson Gas & Electric Corp. v. Public Service Commission.39 In applying Central Hudson, the Second Circuit concluded that the government’s criminalization of Caronia’s off-label marketing was unconstitutional because it did not directly advance the government’s interest in drug safety and public health when narrower and less burdensome regulations would have sufficed.40

Specifically, the Second Circuit found that the FDCA’s restrictions failed to advance the government’s interest in protecting the public safety, holding that:

[P]rohibiting off-label promotion by a pharmaceutical manufacturer while simultaneously allowing off-label use ‘paternalistically’ interferes with the ability of physicians and patients to receive potentially relevant treatment information; such barriers to information about off-label use could inhibit, to the public’s detriment, informed and intelligent treatment decisions. Moreover, in the fields of medicine and public health, ‘where information can save lives,’ it only furthers the public interest to ensure that decisions about the use of prescription drugs, including off-label usage, are intelligent and well-informed.41

Moreover, the Second Circuit recognized that ongoing discourse between pharmaceutical companies and physicians would be in the best interest of the patient:

The government’s construction of the FDCA essentially legalizes the outcome — off-label use — but prohibits the free flow of information that would inform that outcome. If the government’s objective is to shepherd physicians to prescribe drugs only on-label, criminalizing manufacturer pro­motion of off-label use while permitting others to promote such use to physicians is an indirect and questionably effective means to achieve that goal. Thus, the government’s construction of the FDCA’s misbranding provisions does not directly advance its interest in reducing patient exposure to off-label drugs or in preserving the efficacy of the FDA drug approval process because the off-label use of such drugs continues to be generally lawful. Accordingly, the government’s prohibition of off-label promotion by pharmaceutical manufacturers ‘provides only ineffective or remote support for the government’s purpose.’42

The Second Circuit also concluded that the FDA, which the Second Court fully endorsed as having the authority to regulate marketing of pharmaceuticals, had numerous options at its disposal to manage off-label marketing including “guiding physicians and patients in differentiation between misleading […] and truthful […] information,” developing “warning or dis­claimer systems […] within the off-label market,” requiring “pharmaceutical manufacturers to list all applicable or intended indications when they first apply for FDA approval,” placing “ceiling or caps on off-label prescriptions,” and reminding physicians and manufacturers that they can be held liable on negligence and malpractice theories for off-label drug use.43

Judge Debra Ann Livingston wrote a vehement dissent and argued that by vacating the conviction, the Second Circuit had called “into question the very foundations of our century-old system of drug regulation.”44 Judge Livingston performed the same analysis under Sorrell and Central Hudson and concluded that the FDCA’s off-label marketing regulations withstood attack.

E. Caronia Aftermath

Dissection of the Caronia opinion notwithstanding, the important question remains — how will the Second Circuit’s opinion affect government prosecutions of off-label marketing in the future? By the date of this article’s publishing, we will know whether the Department of Justice will choose to seek an en banc review before the Second Circuit, choose to file an appeal before the United States Supreme Court, or let the Caronia decision stand and avoid a potentially more damaging opinion from the Supreme Court.

Two weeks after the Caronia decision was published, the DOJ announced a $762 million plea deal with Amgen, Inc. regarding its off-label promotion of its anemia drug Aranesp.45 Clearly, the government will continue to prosecute misbranding cases until the Caronia saga reaches completion. Until then, pharmaceutical companies will have to continue to tread lightly and institute policies and controls that will carefully manage how off-label information is disseminated.


[1] Stafford, Randall S., “Regulating Off-Label Drug Use: Rethinking the Role of the FDA,” N. Engl. J. Med. 358.14 (2008): 1,427–29. (Discussing 2003 study of 160 common drugs where off-label use accounted for approximately 21% of prescriptions.) But see Eguale, Tewodros et al., “Drug, Patient, and Physician Characteristics Associated with Off-Label Prescribing in Primary Care,” Archives of Internal Medicine, 172 (2012): 781–88. (A more limited Canadian study finding that 11% of prescriptions are off-label.)

[2] Eguale, Tewodros et. al., “Drug, Patient, and Physician Characteristics Associated with Off-Label Prescribing in Primary Care,” Archives of Internal Medicine, 172 (2012): 781–88.

[3] 21 U.S.C. § 355(a).

[4] 21 U.S.C. § 355(d).

[5] Id.

[6] 21 U.S.C. § 353(b) (2012). See also Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341, 350 (2001). (Recognizing that off-label use is an “accepted and necessary corollary of the FDA’s mission to regulate in this area without directly interfering with the practice of medicine.”)

[7] Walton, S.M. et al., “Prioritizing Medications for Policy and Research Initiatives Examining Off-Label Prescribing,” Pharmacotherapy, 28 (2008): 1,443–452.

[8] 21 U.S.C. §§ 331(a), 333(a) (2).

[9] Id.

[10] 21 U.S.C. § 352(f); 21 C.F.R. § 201.5.

[11] 21 C.F.R. § 201.128.

[12] Harris, Gardiner, “Pfizer Pays $2.3 Billion to Settle Marketing Case,” The New York Times, Sept. 2, 2009. Available at <http://www.nytimes.com/2009/09/03/business/03health.html?_r=0>. Last accessed Jan. 3, 2013.

[13] See e.g., United States v. GlaxoSmithKline, LLC, 12-cr-10206 (D. Mass. July 10, 2012); United States v. Merck Sharp & Dohme Corp., No. 11-cr-10384 (D. Mass. May 18, 2012).

[14] Thomas, Katie, “Glaxo Agrees to Pay $3 Billion in Fraud Settlement,” The New York Times, July 2, 2012. Available at <http://www.nytimes.com/2012/07/03/business/glaxosmithkline-agrees-to-pay-3-billion-in-fraud-settlement.html>. Last accessed Jan. 3, 2013.

[15] U.S. Department of Health and Human Services, “Justice Department Announces Largest Health Care Fraud Settlement,” Sept. 2, 2009. Available at <http://www.hhs.gov/news/press/2009pres/09/20090902a.html>. Last accessed Jan. 3, 2013.

[16] See Beck, Jim, “Allergan’s Free Speech Attack on FDA Regulations,” Drug and Device Law Blog, Oct. 3, 2009. Available at <http://druganddevicelaw.blogspot.com/2009/10/allergans-free-speech-attack-on-fda.html>. Last accessed Jan. 3, 2013.

[17] Comer, Ben, and Matthew Arnold, “Allergan Drops FDA Lawsuit as Part of Off-Label Settlement,” Medical Marketing & Media, Sept. 2, 2010. Available at <http://www.mmm-online.com/allergan-drops-fda-lawsuit-as-part-of-off-label-settlement/article/178168>. Last accessed Jan. 3, 2013.

[18] See Mack, John, “Citizen Petition Filed by Pharma Likely to Delay Indefinitely the Issuance of FDA Social Media Guidance,” Pharma Marketing Blog, July 6, 2011. Available at <http://pharmamkting.blogspot.com/2011/07/citizens-petition-filed-with-fda-likely.html>. Last accessed Jan. 3, 2013.

[19] Id.

[20] United States v. Caronia, No. 09-5006-cr, 2012 WL 5992141, – F.3d – (2d Cir. Dec. 3, 2012), slip op. at 14.

[21] Id. at 12.

[22] Id.

[23] Id.

[24] Id. at 14.

[25] Id. at 15.

[26] Id. at 15–16.

[27] Orphan Medical settled the claims against it for $20 million. See Berenson, Alex, “Maker of Narcolepsy Drug Pleads Guilty in U.S. Case,” The New York Times, July 14, 2007. Available at <http://www.nytimes.com/2007/07/14/business/14jazz.html>. Last accessed Jan. 3, 2013.

[28] Caronia, slip op. at 17–19.

[29] Id. at 19.

[30] Id. at 20.

[31] Id. at 24.

[32] Id. at 25.

[33] Id. at 27.

[34] Id. at 26.

[35] Id. at 32.

[36] Id. at 35.

[37] Id. at 39.

[38] Id.

[39] Id. at 42.

[40] Id. at 43–51.

[41] Id. at 44 (citations omitted).

[42] Id. at 47 (citations omitted).

[43] Id. at 48–50 (citations omitted).

[44] Id. at 53.

[45] Terhune, Chad, “Amgen Pleads Guilty to Improper Marketing of Anemia Drug Aranesp,” The Los Angeles Times, Dec. 18, 2012. Available at <http://articles.latimes.com/2012/dec/18/business/la-fi-amgen-plea-20121219>. Last accessed Jan. 3, 2013.

Finis

Citations

  1. Stafford, Randall S., “Regulating Off-Label Drug Use: Rethinking the Role of the FDA,” N. Engl. J. Med. 358.14 (2008): 1,427–29. (Discussing 2003 study of 160 common drugs where off-label use accounted for approximately 21% of prescriptions.) But see Eguale, Tewodros et al., “Drug, Patient, and Physician Characteristics Associated with Off-Label Prescribing in Primary Care,” Archives of Internal Medicine, 172 (2012): 781–88. (A more limited Canadian study finding that 11% of prescriptions are off-label.) Jump back to footnote 1 in the text
  2. Eguale, Tewodros et. al., “Drug, Patient, and Physician Characteristics Associated with Off-Label Prescribing in Primary Care,” Archives of Internal Medicine, 172 (2012): 781–88. Jump back to footnote 2 in the text
  3. 21 U.S.C. § 355(a). Jump back to footnote 3 in the text
  4. 21 U.S.C. § 355(d). Jump back to footnote 4 in the text
  5. Id. Jump back to footnote 5 in the text
  6. 21 U.S.C. § 353(b) (2012). See also Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341, 350 (2001). (Recognizing that off-label use is an “accepted and necessary corollary of the FDA’s mission to regulate in this area without directly interfering with the practice of medicine.”) Jump back to footnote 6 in the text
  7. Walton, S.M. et al., “Prioritizing Medications for Policy and Research Initiatives Examining Off-Label Prescribing,” Pharmacotherapy, 28 (2008): 1,443–452. Jump back to footnote 7 in the text
  8. 21 U.S.C. §§ 331(a), 333(a) (2). Jump back to footnote 8 in the text
  9. Id. Jump back to footnote 9 in the text
  10. 21 U.S.C. § 352(f); 21 C.F.R. § 201.5. Jump back to footnote 10 in the text
  11. 21 C.F.R. § 201.128. Jump back to footnote 11 in the text
  12. Harris, Gardiner, “Pfizer Pays $2.3 Billion to Settle Marketing Case,” The New York Times, Sept. 2, 2009. Available at <http://www.nytimes.com/2009/09/03/business/03health.html?_r=0>. Last accessed Jan. 3, 2013. Jump back to footnote 12 in the text
  13. See e.g., United States v. GlaxoSmithKline, LLC, 12-cr-10206 (D. Mass. July 10, 2012); United States v. Merck Sharp & Dohme Corp., No. 11-cr-10384 (D. Mass. May 18, 2012). Jump back to footnote 13 in the text
  14. Thomas, Katie, “Glaxo Agrees to Pay $3 Billion in Fraud Settlement,” The New York Times, July 2, 2012. Available at <http://www.nytimes.com/2012/07/03/business/glaxosmithkline-agrees-to-pay-3-billion-in-fraud-settlement.html>. Last accessed Jan. 3, 2013. Jump back to footnote 14 in the text
  15. U.S. Department of Health and Human Services, “Justice Department Announces Largest Health Care Fraud Settlement,” Sept. 2, 2009. Available at <http://www.hhs.gov/news/press/2009pres/09/20090902a.html>. Last accessed Jan. 3, 2013. Jump back to footnote 15 in the text
  16. See Beck, Jim, “Allergan’s Free Speech Attack on FDA Regulations,” Drug and Device Law Blog, Oct. 3, 2009. Available at <http://druganddevicelaw.blogspot.com/2009/10/allergans-free-speech-attack-on-fda.html>. Last accessed Jan. 3, 2013. Jump back to footnote 16 in the text
  17. Comer, Ben, and Matthew Arnold, “Allergan Drops FDA Lawsuit as Part of Off-Label Settlement,” Medical Marketing & Media, Sept. 2, 2010. Available at <http://www.mmm-online.com/allergan-drops-fda-lawsuit-as-part-of-off-label-settlement/article/178168>. Last accessed Jan. 3, 2013. Jump back to footnote 17 in the text
  18. See Mack, John, “Citizen Petition Filed by Pharma Likely to Delay Indefinitely the Issuance of FDA Social Media Guidance,” Pharma Marketing Blog, July 6, 2011. Available at <http://pharmamkting.blogspot.com/2011/07/citizens-petition-filed-with-fda-likely.html>. Last accessed Jan. 3, 2013. Jump back to footnote 18 in the text
  19. Id. Jump back to footnote 19 in the text
  20. United States v. Caronia, No. 09-5006-cr, 2012 WL 5992141, – F.3d – (2d Cir. Dec. 3, 2012), slip op. at 14. Jump back to footnote 20 in the text
  21. Id. at 12. Jump back to footnote 21 in the text
  22. Id. Jump back to footnote 22 in the text
  23. Id. Jump back to footnote 23 in the text
  24. Id. at 14. Jump back to footnote 24 in the text
  25. Id. at 15. Jump back to footnote 25 in the text
  26. Id. at 15–16. Jump back to footnote 26 in the text
  27. Orphan Medical settled the claims against it for $20 million. See Berenson, Alex, “Maker of Narcolepsy Drug Pleads Guilty in U.S. Case,” The New York Times, July 14, 2007. Available at <http://www.nytimes.com/2007/07/14/business/14jazz.html>. Last accessed Jan. 3, 2013. Jump back to footnote 27 in the text
  28. Caronia, slip op. at 17–19. Jump back to footnote 28 in the text
  29. Id. at 19. Jump back to footnote 29 in the text
  30. Id. at 20. Jump back to footnote 30 in the text
  31. Id. at 24. Jump back to footnote 31 in the text
  32. Id. at 25. Jump back to footnote 32 in the text
  33. Id. at 27. Jump back to footnote 33 in the text
  34. Id. at 26. Jump back to footnote 34 in the text
  35. Id. at 32. Jump back to footnote 35 in the text
  36. Id. at 35. Jump back to footnote 36 in the text
  37. Id. at 39. Jump back to footnote 37 in the text
  38. Id. Jump back to footnote 38 in the text
  39. Id. at 42. Jump back to footnote 39 in the text
  40. Id. at 43–51. Jump back to footnote 40 in the text
  41. Id. at 44 (citations omitted). Jump back to footnote 41 in the text
  42. Id. at 47 (citations omitted). Jump back to footnote 42 in the text
  43. Id. at 48–50 (citations omitted). Jump back to footnote 43 in the text
  44. Id. at 53. Jump back to footnote 44 in the text
  45. Terhune, Chad, “Amgen Pleads Guilty to Improper Marketing of Anemia Drug Aranesp,” The Los Angeles Times, Dec. 18, 2012. Available at <http://articles.latimes.com/2012/dec/18/business/la-fi-amgen-plea-20121219>. Last accessed Jan. 3, 2013. Jump back to footnote 45 in the text