The U.S. Court of Appeals for the Second Circuit voted 2-to-1 this week to throw out a conviction against a drug salesman for promoting a drug for off-label use. The court stated that the salesman’s freedom of speech had been violated. Legal experts say the government will most likely ask for a rehearing before taking the case to the U.S. Supreme Court.
The court’s decision is considered a victory for drug companies, which have faced lawsuits and heavy fines in the past for off-label marketing. In July, GlaxoSmithKline paid $3 billion in fines in part for promoting antidepressants for unapproved uses, and in August, Johnson & Johnson paid $181 million to settle a consumer fraud case linked to marketing of its antipsychotic drug Risperdal.
Victory for Drug Companies
The salesman, Alfred Caronia, was working for Orphan Medical when he was caught on tape promoting a narcolepsy drug known as Xyren as a treatment for insomnia. Under the Food, Drug and Cosmetic Act, the Food and Drug Administration (FDA) has the authority to approve drugs for certain uses. While doctors may prescribe a drug for any use, it is illegal for pharmaceutical companies to promote them for uses other than those that are FDA-approved. Caronia was investigated in 2005 and convicted in 2008. Shortly after, he appealed his conviction.
John R. Fleder, a lawyer who represented the FDA while working at the Justice Department, told The New York Times that this ruling could make it more difficult for the government to prosecute drug companies. According to Fleder, “this decision hits at the heart of the government’s theory” that it is illegal for drug companies or their employees to market a drug or device for off-label use.
Judge Debra Ann Livingston, who disagreed with the majority, argued that if these companies “were allowed to promote FDA-approved drugs for non-approved uses, they would have little incentive to seek FDA approval.”
Because the ruling in the Caronia case only applies to the Second Circuit, which includes New York, Connecticut and Vermont, it is not expected to affect pharmaceutical companies because they market their drugs nationally. However, former FDA chief counsel Gerald Masoudi said the ruling made a distinction between truthful discussion of off-label uses of drugs, many of which are considered legitimate by the medical community, and those that are misleading or false.
In the wake of the court’s decision, the FDA will proceed more cautiously when prosecuting similar cases, including putting some on hold until this case is settled.
Off-Label Accusations and Settlements
Over the years, a number of companies have been accused of off-label marketing. Drug giant Pfizer has been in and out of lawsuits for promoting its drugs for off-label uses. In January 2004, the New York-based company pleaded guilty to two counts of marketing its epilepsy seizure drug Neurontin for unapproved uses and paid $430 million in fines. In 2009, it paid $1.19 billion for committing the same crime. More than 1,000 lawsuits were filed after misleading marketing of Neurontin allegedly led to multiple suicides.
Medical device manufacturer Medtronic was recently the subject of an investigation for off-label marketing of its synthetic bone graft, INFUSE. It was accused of promoting INFUSE for off-label uses and spinal procedures, many of which have resulted in product liability claims and lawsuits against the company.