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Second Circuit Court of Appeals rules on Caronia
January 2013
by Lori Lesko  |  Email the author


NEW YORK—In a controversial and divided ruling, the Second Circuit Court of Appeals on Dec. 3 vacated the judgment of the U.S. Court for the Eastern District of New York that convicted pharmaceutical sales representative Alfred Caronia of conspiracy to introduce a misbranded drug into interstate commerce in violation of the Federal Drug and Cosmetic Act (FDCA).

The panel of three appellate judges held 2-1 that the district court's 2009 conviction violated Caronia's First Amendment right of free speech, despite courtroom evidence demonstrating that Caronia exaggerated—and even misrepresented—the uses for Xyrem, a potent drug prescribed primarily for narcolepsy.

While the court recognized that the U.S. Food and Drug Administration (FDA) must first approve a drug for a particular use before it can be distributed into interstate commerce, once approved, a physician is generally permitted to prescribe the drug for any use deemed appropriate in his or her medical judgment. The use of a drug for a purpose not approved by the FDA is referred to as "off-label use," and is not necessarily illegal.

The FDA has also taken the position that drug manufacturers and their representatives —unlike physicians—may not promote off-label uses of a drug. According to the FDA, such promotion constitutes criminal "misbranding" in violation of the FDCA. Specifically, the FDA contends that the promotion of off-label use is "misbranding" because the labeling of a drug never has adequate directions for the drug's off-label use, according to the court.

The case unfolded in 2005 when Caronia, as a sales rep, promoted the drug Xyrem for drug manufacturer Orphan Medical Inc., which is now known as Jazz Pharmaceutical. Jazz grossed $20 million in combined Xyrem sales in 2005, according to court records.
Xyrem is a powerful central nervous system depressant approved by the FDA to treat narcolepsy patients who experience cataplexy or excessive daytime sleepiness. Xyrem can cause serious side effects, including difficulty breathing while asleep, confusion, abnormal thinking, depression, nausea, vomiting, dizziness, headache, bedwetting and sleepwalking. If abused, Xyrem can cause additional medical problems, including seizures, dependence, severe withdrawal, coma and death. In fact, the FDA requires that the drug be accompanied by a "black box" warning, which indicates that the drug's safety has not been established in patients under the age of 16.

When the federal government began investigating Orphan for off-label promotion of Xyrem, its uncovered evidence that Caronia and "Dr. Gleason," a physician hired by Orphan to promote Xyrem, were promoting the drug for unapproved uses. Caronia was recorded telling a government informer that Xyrem could be used to treat fibromyalgia, chronic fatigue or chronic pain, and that it also could be used by patients under the age of 16.

The case was tried before a jury in October 2008. The record makes clear that the government prosecuted Caronia for his off-label promotion, in violation of the FDCA. On Nov. 30, 2009, the district court sentenced Caronia to one year of probation, 100 hours of community service and a $25 special assessment.

On appeal, Caronia argued that the misbranding provisions of the FDCA prohibit off-label promotion, and therefore unconstitutionally restrict speech. Caronia also argued that the First Amendment does not permit the government to prohibit and criminalize a pharmaceutical manufacturer's truthful and non-misleading promotion of an FDA- approved drug to physicians for off-label use—where such use is not itself illegal and others are permitted to engage in such speech.

"Caronia argues that he was convicted for his speech—for promoting an FDA-approved drug for off-label use—in violation of his right of free speech under the First Amendment," Second Circuit Judge Dennis Chin wrote for the majority. "We agree. Accordingly, we vacate the judgment of conviction and remand the case to the district court."

The court explained that it was clear from the government's arguments at trial that Caronia was, in fact, prosecuted for his speech, and his speech did not merely play an evidentiary role in determining whether the drug was misbranded.

Next, the court turned to whether the criminalization of pharmaceutical manufacturers' speech promoting off-label use violates the First Amendment.

"The government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of a FDA-approved drug," Chin stated. "The proscribed conduct for which Caronia was prosecuted was precisely his speech in aid of pharmaceutical marketing."

Writing the lone dissenting opinion, Judge Debra Ann Livingston stated the decision might restrict prosecutors from successfully trying future drug cases.

"The majority calls into question the very foundations of our century-old system of drug regulation," Livingston wrote.

The Second Circuit Court's decision appears to have undermined the district court's prosecution of those who engage in false or misleading marketing instead of focusing on those who share truthful information about off-label use. In "Off-Label Marketing and the First Amendment," the New England Journal of Medicine weighed in on the issue, stating: "On Dec. 3, 2012, a three-judge panel of a U.S. appeals court took a controversial leap toward what some fear will be license by the courts to invalidate a host of state and federal regulations, including some applicable to healthcare. At issue in the Dec. 3 opinion—which is doubtless headed for further appeal—were the FDA regulations applicable to marketing of prescription pharmaceuticals for off-label uses."

Whether Caronia winds its way to the U.S. Supreme Court "is yet to be determined," said Jacqueline R. Berman, an attorney in the FDA & Healthcare Practice Group at Morgan, Lewis & Bockius LLP, writing in the March-April 2012 Journal of Health Care Compliance.

"Even if (Caronia) is heard by the Supreme Court, a decision likely will not change the entire nature of off-label promotion," Berman wrote. "Rather, it is more likely that the court will proceed incrementally, addressing discrete aspects of the government's off-label promotional policy. In the coming years, however, these will be cases to watch closely, as they could begin a course of events that impact how drugs are promoted in the United States."

Code: E011324



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