By Patrick J. O’Toole Jr. and Caroline K. Simons  

(Patrick J. O’Toole Jr.is apartner in the Weil, Gotshal & Manges LLP’s Boston office, practicing in the Complex Commercial Litigation group.   Caroline K. Simons is an associate with the firm and also a member of  the Complex Commercial Litigation practice. )  

On Dec. 3, 2012, the 2nd U.S. Circuit Court of Appeals handed down its long-awaited decision in United States v. Caronia and vacated—on First Amendment grounds—the conviction of Alfred Caronia.  Caronia was a pharmaceutical sales representative who promoted off-label uses of drug Xyrem to a physician, who happened to be a government informant wearing a wire.  Caronia has broad ramifications for the Food and Drug Administration (FDA) and its regulatory practices with respect to the marketing of drugs and medical devices, and it sets the stage for a potential battle before the Supreme Court that will be closely watched by the pharmaceutical industry, payors, physicians, and practitioners alike.

The 2-1, 82-page opinion includes a forceful dissent, protesting that the majority “calls into question the very foundations of our century-old system of drug regulation.”  Indeed, pre-Caronia, the FDA regularly enforced the prohibitions against selling misbranded drugs in the Food, Drug and Cosmetic Act (FDCA) by targeting the promotional statements of companies and their sales representatives.  While the FDCA does not expressly criminalize off-label promotional speech—a point that the government acknowledged throughout its briefing and oral argument before the 2nd Circuit—the FDA maintains that off-label promotion nevertheless can serve as evidence of criminal intent to sell misbranded drugs.  According to the FDA, off-label promotion is evidence that the promoter intends the drug to be used in a non-FDA-approved manner.  Using this theory, the FDA has recovered several billion dollars’ worth of fines in settlements with pharmaceutical and medical device companies over the years.   

Caronia represents a blow to the FDA’s enforcement theory.  The Caronia court heldthat the FDCA could not be construed to criminalize off-label promotion of a drug, so long as the off-label use of the drug was lawful and the promotion itself was truthful and non-misleading.  However, the majority rejected the invitation to find the misbranding provisions of the FDCA unconstitutional.  Instead, the court structured its decision more narrowly based on the way Caronia’s trial was conducted:  in particular, it found that the prosecutor’s statements during trial, as well as the jury instructions, showed that Caronia was impermissibly convicted for his speech alone and not for the actual charge of conspiracy to introduce misbranded drugs into interstate commerce.

The dissent underscored the narrow scope of the decision, laying out its disagreement with how the majority viewed the trial record and emphasizing that the decision did not do away with Wisconsin v. Mitchell, 508 U.S. 576 (1993), which provides that “[t]he First Amendment . . . does not prohibit the evidentiary use of speech to establish the elements of a crime or to prove motive or intent.”  However, the dissent cautioned that the decision may effectively prohibit all uses of off-label promotional speech to support a misbranding conviction under the FDCA.   

All three judges on the Caronia panel acknowledged that the decision may have left the enforcement of the misbranding provisions of the FDCA on shaky ground.  While the government conceivably could conduct future trials more carefully to cabin off-label promotional speech as evidence of unlawful conduct under the FDCA, rather than unlawful conduct in and of itself, defendants are sure to be emboldened by Caronia to continue challenging the misbranding provisions of the FDCA on First Amendment grounds.  Even though Caronia only directly affects FDA enforcement in New York, New Jersey, and Connecticut for now, the government is likely re-evaluating its strategy.  As Caronia proceeds toward the Supreme Court, there is no doubt that the future of off-label promotion will have plenty of interested onlookers.