It's been two weeks since a three-judge panel of the 2nd Circuit Court of Appeals issued a landmark split decision that the First Amendment protects defendants from criminal prosecution for truthful statements about the off-label use of pharmaceuticals approved by the Food and Drug Administration. We still don't know whether the Justice Department will take the risky step of asking for en banc review or appealing the ruling to the U.S. Supreme Court. But for some foreshadowing of how the ruling may shift the balance of power between the Justice Department and drug companies, I took a look at the docket in Par Pharmaceutical's declaratory judgment suit against the FDA, which seeks a ruling that the First Amendment protects the company's truthful speech to healthcare professionals.

On Friday, U.S. District Judge Rudolph Contreras of Washington granted a three-month extension of a stay in the case, which was filed by Par's lawyers at Arnold & Porter in October 2011, so the two sides can continue settlement negotiations. It's a mistake, of course, to read too much into the mere acknowledgement that Par and the Justice Department are talking about a global deal, but Par disclosed in its complaint that it's been under investigation for its marketing of the appetite stimulant Megace since 2009. The timing of settlement negotiations, which began several months ago, suggests that the Justice Department took Par's First Amendment argument seriously enough to want to avoid litigation of the declaratory judgment suit and Par's accompanying motion for a preliminary injunction. And that, in turn, suggests that pharma companies at last have some leverage against the Justice Department's highly profitable off-label marketing accusations. (Admittedly, I'm drawing inferences here; a Justice Department spokesman declined to comment and Par counsel Lisa Blatt for A&P didn't return my call.)

Par's complaint described what it called a Catch-22 situation for drug companies, in which they're supposedly not even permitted to talk to medical professionals about approved use of their products if they're meeting in facilities in which the drug is also prescribed for off-label uses. According to Par, the Food, Drug and Cosmetic Act's "new drug" provisions bar pharma companies from adding information about off-label uses to FDA-approved labels, yet the FDA's "intended use" regulations mean that the companies risk criminal prosecution for misbranding if they don't change the labeling to address medically accepted off-label use.

Megase is only approved as an appetite stimulant for AIDS patients, yet, according to Par, it is widely prescribed to geriatric and cancer patients as well. (Par's complaint said the drug is so commonly used as a treatment for those patient groups that off-label prescriptions are covered by Medicare and Medicaid.) The pharma company claimed it is so fearful of prosecution for misbranding that it will not even discuss approved uses of Megase in long-term care or oncology facilities in which the drug is known to be prescribed off-label.

"The government interprets the regulations to prohibit a manufacturer from speaking to healthcare professionals a bout the FDA-approved on-label uses of a prescription drug in a setting where physicians may prescribe the drug for both approved and unapproved uses," Par's complaint said. "(Par) is significantly chilled from disseminating beneficial information about its drug to many healthcare professionals who reasonably may encounter AIDS patients ... in settings where physicians prescribe the drug for off-label uses."

The Justice Department moved to dismiss the complaint (and for summary judgment on the preliminary injunction) a couple months after Par filed suit. The government acknowledged that Par is under investigation for its marketing of Megace but said the company's complaint "rests on a patchwork of false assumptions and misinterpretations of the regulations." Truthful marketing of the drug for approved purposes would not subject Par to prosecution for misbranding, the government said. "The mere use of a drug manufacturer's speech about its product as evidence of the product's intended uses is entirely unobjectionable under the First Amendment," the Justice Department said in its brief. So if Par simply intended to tell prescribers about Megace as a treatment for AIDS patients, the filing said, it has no reason to seek a declaratory judgment.

Last May, without any substantive rulings in the case, Par and the Justice Department moved for a joint stay in order to talk about settling. That stay has now been extended twice. There's no filing in the docket in which Par requests judicial notice of the 2nd Circuit's ruling from earlier this month (which, to be sure, does not set precedent in the District of Columbia Circuit), but you can be sure it's on the minds of the Justice Department and the pharma company as they continue talking.

(Reporting by Alison Frankel)

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