In the Courts

In 2009, a jury convicted Caronia of conspiracy to introduce a misbranded drug into interstate commerce in violation of 21 U.S.C. ” 331(a) and 333(a)(1). The facts underlying Caronia's conviction relate to his promotion of the drug Xyrem when he was a sales representative for Orphan Medical Inc.'(now known as Jazz Pharmaceuticals). Caronia, 703 F.3d at 155-56. As part of a federal investigation into the off-label promotion of Xyrem, Caronia was recorded promoting the drug for purposes not approved by the FDA at the time. Id. at 156. Before trial, Caronia moved to dismiss, arguing “that the application of the FDCA's misbranding provisions to his off-label promotional statements unconstitutionally restricted his right to free speech under the First Amendment and that the provisions were unconstitutionally vague and broad.” Id. at 158. Caronia's motion was denied, and he was subsequently convicted and sentenced to one year of probation and community service.

On appeal, Caronia re-raised his First Amendment basis for dismissal below, and argued “that he was convicted for his speech ' for promoting an FDA-approved drug for off-label use ' in violation of his right to free speech under the First Amendment.” Id. at 152. The government countered, arguing that Caronia's off-label promotion was used as evidence of his intent to misbrand, not as the sole basis of his prosecution. See Id. at 160-161.

The court rejected this argument. In addition to the trial court's jury instruction, which “left the jury to understand that Caronia's speech was itself the proscribed conduct,” the court noted several examples in the record that belied the government's argument, including that the government never argued in summation or rebuttal that the promotion was evidence of intent; the government never suggested that Caronia engaged in any form of misbranding other than the promotion of the off-label use of an FDA-approved drug; and the government never suggested, for example, that Caronia conspired to place false labeling on a drug. Id. at 162.

In light of these examples (and others within the record), the court concluded that Caronia was prosecuted only for his off-label promotion of an FDA-approved drug. Id. The court then turned to whether the prosecution was constitutionally permissible under the First Amendment.

In Sorrell v. IMS Health, Inc., 131 S. Ct. 2653 (2011), the Supreme Court held that a Vermont law prohibiting pharmaceutical companies from using prescriber-identifying information for marketing purposes unconstitutionally restricted speech. In reaching that decision, the court engaged in a two-part inquiry: 1) whether the restriction was content-and-speaker-based; and 2) whether the government had shown that the restriction on speech was consistent with the First Amendment.

Here, the court applied the same two-part inquiry. First, the court found that the government's theory of prosecution was content-and-speaker-based because it disfavored speech with a particular content (off-label promotion) when expressed by certain disfavored speakers (pharmaceutical manufacturers), while allowing others to speak without restriction. Id. at 164-165.

Second, in deciding whether the government could justify a criminal prohibition of off-label promotion, the court applied the four-part intermediate standard of heightened scrutiny: 1) the speech must not be misleading and concern lawful activity; 2) the asserted government interest must be substantial; 3) the regulation must directly advance that interest; and 4) the regulation must be narrowly drawn to serve the government's interest. Id. at 164 (citing Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y., 447 U.S. 557 (1980)). The court found that the first two prongs were “easily satisfied here.” Id. at 165. As for the third and fourth prongs, the court held that the prohibition of off-label promotion did not directly advance the government's interests in drug safety and public health because off-label use itself is not prohibited, and the court noted that
“[n]umerous, less speech-restrictive alternatives are available, as are non-criminal penalties.” Id. at 167-68.

Accordingly, the court concluded: “[E]ven if speech can be used as evidence of a drug's intended use, we decline to adopt the government's construction of the FDCA's misbranding provision to prohibit manufacturer promotion alone as it would unconstitutionally restrict free speech.” Id. at 168. Caronia's conviction was vacated and his case remanded to the lower court.'

In the Courts and Business Crimes Hotline were written by Christian Izaguirre and Associate Editor Matthew J. Alexander, respectively. Both are Associates at Kirkland & Ellis LLP, Washington, DC.

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Second Circuit Vacates Conviction of Pharmaceutical Sales Rep

On Dec. 3, 2012, the U.S. Court of Appeals for the Second Circuit, in United States v. Caronia , 703 F.3d 149 (2d Cir. 2012), vacated the criminal conviction of former pharmaceutical sales representative Alfred Caronia, whose conviction stemmed from off-label promotion of a Food and Drug Administration (FDA)-approved drug. Notably, the court based its decision on First Amendment grounds, and held that the government cannot prosecute pharmaceutical manufacturers and their representatives “for speech promoting the lawful, off-label use of an FDA-approved drug.” Id. at 169.

Under the Federal Food, Drug, and Cosmetic Act (FDCA), the FDA must approve of a drug's specific uses prior to distribution to the general public. 21 U.S.C. ' 355(a). Although doctors may freely prescribe a drug for purposes not approved by the FDA, the FDCA expressly prohibits the “introduction or delivery for introduction into interstate commerce of any ' drug ' that is ' misbranded.” 21 U.S.C. ' 331(a). A drug is “misbranded” when labeling fails to bear “adequate directions for use.” 21 U.S.C ' 352(f). Directions are “adequate” when a person “can use a drug safely and for the purpose for which it is intended.” 21 C.F.R. ' 201.5. Promotional statements by a pharmaceutical company or its representatives can serve as proof of a drug's intended use. Id. And if the FDA has not approved the intended use, then these promotional statements could be used as evidence of misbranding. Importantly, however, such statements do not constitute a crime in and of themselves under the FDCA and related regulations. See Caronia, 703 F.3d at 155 (citing 21 C.F.R. ' 201.5).'

In 2009, a jury convicted Caronia of conspiracy to introduce a misbranded drug into interstate commerce in violation of 21 U.S.C. ” 331(a) and 333(a)(1). The facts underlying Caronia's conviction relate to his promotion of the drug Xyrem when he was a sales representative for Orphan Medical Inc.'(now known as Jazz Pharmaceuticals). Caronia, 703 F.3d at 155-56. As part of a federal investigation into the off-label promotion of Xyrem, Caronia was recorded promoting the drug for purposes not approved by the FDA at the time. Id. at 156. Before trial, Caronia moved to dismiss, arguing “that the application of the FDCA's misbranding provisions to his off-label promotional statements unconstitutionally restricted his right to free speech under the First Amendment and that the provisions were unconstitutionally vague and broad.” Id. at 158. Caronia's motion was denied, and he was subsequently convicted and sentenced to one year of probation and community service.

On appeal, Caronia re-raised his First Amendment basis for dismissal below, and argued “that he was convicted for his speech ' for promoting an FDA-approved drug for off-label use ' in violation of his right to free speech under the First Amendment.” Id. at 152. The government countered, arguing that Caronia's off-label promotion was used as evidence of his intent to misbrand, not as the sole basis of his prosecution. See Id. at 160-161.

The court rejected this argument. In addition to the trial court's jury instruction, which “left the jury to understand that Caronia's speech was itself the proscribed conduct,” the court noted several examples in the record that belied the government's argument, including that the government never argued in summation or rebuttal that the promotion was evidence of intent; the government never suggested that Caronia engaged in any form of misbranding other than the promotion of the off-label use of an FDA-approved drug; and the government never suggested, for example, that Caronia conspired to place false labeling on a drug. Id. at 162.

In light of these examples (and others within the record), the court concluded that Caronia was prosecuted only for his off-label promotion of an FDA-approved drug. Id. The court then turned to whether the prosecution was constitutionally permissible under the First Amendment.

In Sorrell v. IMS Health, Inc., 131 S. Ct. 2653 (2011), the Supreme Court held that a Vermont law prohibiting pharmaceutical companies from using prescriber-identifying information for marketing purposes unconstitutionally restricted speech. In reaching that decision, the court engaged in a two-part inquiry: 1) whether the restriction was content-and-speaker-based; and 2) whether the government had shown that the restriction on speech was consistent with the First Amendment.

Here, the court applied the same two-part inquiry. First, the court found that the government's theory of prosecution was content-and-speaker-based because it disfavored speech with a particular content (off-label promotion) when expressed by certain disfavored speakers (pharmaceutical manufacturers), while allowing others to speak without restriction. Id. at 164-165.

Second, in deciding whether the government could justify a criminal prohibition of off-label promotion, the court applied the four-part intermediate standard of heightened scrutiny: 1) the speech must not be misleading and concern lawful activity; 2) the asserted government interest must be substantial; 3) the regulation must directly advance that interest; and 4) the regulation must be narrowly drawn to serve the government's interest. Id . at 164 (citing Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y. , 447 U.S. 557 (1980)). The court found that the first two prongs were “easily satisfied here.” Id. at 165. As for the third and fourth prongs, the court held that the prohibition of off-label promotion did not directly advance the government's interests in drug safety and public health because off-label use itself is not prohibited, and the court noted that
“[n]umerous, less speech-restrictive alternatives are available, as are non-criminal penalties.” Id. at 167-68.

Accordingly, the court concluded: “[E]ven if speech can be used as evidence of a drug's intended use, we decline to adopt the government's construction of the FDCA's misbranding provision to prohibit manufacturer promotion alone as it would unconstitutionally restrict free speech.” Id. at 168. Caronia's conviction was vacated and his case remanded to the lower court.'

In the Courts and Business Crimes Hotline were written by Christian Izaguirre and Associate Editor Matthew J. Alexander, respectively. Both are Associates at Kirkland & Ellis LLP, Washington, DC.

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