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Article: The First Amendment and Off-Label Promotion: United States v. Caronia

April 01, 2013
Business Litigation Reports

For years, the U.S. Department of Justice has aggressively pursued and brought charges over “off-label promotions”—the promotion of drugs for uses that have not received FDA approval—by pharmaceutical manufacturers and their representatives. Suing under 21 U.S.C. §§ 331(a) and 352(f), the “misbranding” provisions of the Food, Drug and Cosmetic Act (“FDCA”), 21 U.S.C. § 301 et seq., the government has claimed that pharmaceutical manufacturers and their representatives may not engage in off-label marketing even though physicians are free to prescribe drugs for non-approved uses. The government has obtained massive settlements based on the threat of such charges, including an agreement last year by one company to pay a $500 million criminal fine and $198.5 million in forfeiture as part of a misdemeanor plea agreement for off-label marketing of the prescription drug Depakote. See Press Release, U.S. Department of Justice, Abbott Laboratories Sentenced for Misbranding Drug (Oct. 2, 2012) (available at

A recent Second Circuit decision has the potential to change the landscape in such prosecutions. In United States v. Caronia, 703 F.3d 149 (2d Cir. December 3, 2012), a divided Second Circuit panel vacated the conviction of a pharmaceutical sales representative who had promoted off-label uses of Xyrem, a prescription drug manufactured by Orphan Medical, Inc. According to the Caronia majority, convicting the representative for off-label marketing that was not untruthful or misleading could impinge the representative’s First Amendment rights, requiring a narrow construction of the relevant statutes and regulations.

The government argued that Caronia’s alleged off-label promotional activities were unlawful based on Sections 331(a) and 352(f) of the FDCA and 21 C.F.R. §§ 201.5 and 201.128. The government argued that these sections, when read together, provide that a drug is misbranded if it is introduced into interstate commerce without adequate directions for use, that directions for use must be adequate for all intended uses of the drug, and that a drug’s intended use can be shown by oral or written statements by pharmaceutical manufacturers or their representatives. These statutes and regulations mean, according to the government, that “[a]n approved drug that is marketed for an unapproved use (whether in labeling or not) is misbranded because the labeling of such drug does not include ‘adequate directions for use.’” 703 F.3d at 155.

Caronia responded that the First Amendment prohibits a conviction based, as his was, solely on the truthful and non-misleading promotion of a drug, where the promoted use is not itself illegal and others, such as physicians, are permitted to engage in the same speech. Id. at 160. But according to the government, the First Amendment was of no concern because Caronia’s speech was not actually the basis of its prosecution instead, Caronia’s off-label promotional statements served merely the “evidentiary role” of providing evidence of the drug’s “intended use” under 21 C.F.R. § 201.128. See id. at 160.

The majority rejected this “evidentiary role” distinction in ruling that the government’s prosecution treated Caronia’s off-label promotional statements—his speech—as the crime of misbranding itself. Id. at 161. The government’s proscription of off-label promotion was presumptively invalid under Sorrell v. IMS Health, Inc., 131 S. Ct. 2653 (2011), which holds that a restriction on commercial speech that is content- and speaker-based is presumptively invalid. Further, the government failed two of the four Central Hudson factors that traditionally have been used to assess commercial speech. Id. at 166-68 (discussing Central Hudson Gas & Elec. Corp. v. Public Service Commission of New York, 447 U.S. 557, 566 (1980)). First, banning off-label promotion did not directly advance the government’s goal of reducing off-label drug use or the goal of preserving the FDA approval process because physicians are permitted to prescribe off-label. Second, the ban was not narrowly drawn as required under the fourth prong of Central Hudson because “[n]umerous, less speech-restrictive alternatives are available, as are non-criminal penalties.” Id. at 167. While the opinion thus suggests that prosecuting truthful, non-misleading, off-label promotions of a drug by a pharmaceutical representative would violate the First Amendment, the court ultimately avoided this “serious constitutional question” by ruling that the FDCA’s misbranding provisions cannot be interpreted to prohibit such promotions. Id. at 162.

Caronia appears to undermine the government’s ability to bring criminal charges based on off-label promotional conduct, and this potential impact was highlighted in a vigorous dissent by Judge Livingston, who attacked the majority for potentially unraveling the entire FDA drug approval process.

The FDA has announced that it will not appeal this decision to the Supreme Court, stating that it “does not believe that the Caronia decision will significantly affect the agency’s enforcement” of the FDCA’s misbranding provisions. Thomas M. Burton, FDA Won’t Appeal Free-Speech Marketing Decision, Wall St. J, Jan. 23, 2013. As of now Caronia is binding only in the Second Circuit, and it is difficult to predict whether other circuits will follow the majority’s or the dissent’s lead in future off-label promotion prosecutions.