U.S. v. Caronia, --- F.3d ----, 2012 WL 5992141 (2d Cir.)
Judge Livingston dissented.
She began with the proposition that Caronia’s intent that Xyrem be used
in ways its labeling neither disclosed nor described was revealed through his
speech, and it’s unexceptional that speech can constitutionally be used as
evidence of motive or intent. Wisconsin
v. Mitchell, 508 U.S. 476 (1993). By
ruling otherwise, “the majority calls into question the very foundations of our
century-old system of drug regulation.”
Under the FDCA and its regs, whether a drug’s directions are
“adequate … for use” depends on the drug’s intended uses. Directions are adequate only if they include,
for example, “[s]tatements of all ... uses for which such drug is intended,”
and “usual quantities [of dose] for each of the uses for which it is intended.”
Unsurprisingly, Caronia didn’t argue
that Xyrem’s labeling included adequate directions for the off-label uses he
promoted. Rather, his defense focused on
whether he enaged in a conspiracy with others to distribute Xyrem for off-label
use.
Intended use has long been a cornerstone of food and drug
law. The Pure Food and Drugs Act of
1906, which prohibited introducing any adulterated or misbranded drug into
interstate commerce, defined “drug” to include “any substance or mixture of
substances intended to be used for the cure, mitigation, or prevention of disease.” Courts found violations of the law where (as
here) a manufacturer’s speech “demonstrated an intended use that brought it
within the scope of the statute.” The
law’s expansion in the Food, Drug, and Cosmetic Act of 1938 “remained anchored
to the concept of ‘intended uses,’” and broadened the definition of a
“misbranded” drug to include any drug with labeling not bearing “adequate
directions for use.” Courts routinely
relied on “oral representations made by ... authorized sales distributors” to
determine a product's intended uses. The modern FDCA is to the same effect.
The concept of “intended uses”
therefore largely defines the scope of the FDA's regulatory authority. To put
the matter in practical terms: it is because of the “intended uses” principle
that hardware stores are generally free to sell bottles of turpentine, but may
not label those bottles, “Hamlin's Wizard Oil: There is no Sore it will Not
Heal, No Pain it will not Subdue.”
The relevant regs have remained essentially unchaged for
sixty years. Intended uses are defined
objectively, not subjectively. Xyrem was “misbranded”—and Caronia could be
guilty of conspiracy to introduce a misbranded drug into commerce—“if the
conduct and statements of the persons legally responsible for labeling the drug
(or the conduct and statements of their representatives) demonstrated an
objective intent that Xyrem be used for off-label purposes.”
To demonstrate that Xyrem was intended for off-label uses
(and thus that it was misbranded) the prosecution in this case relied on
Caronia's statements that Xyrem could be used to treat various conditions for
which it was unapproved, including multiple sclerosis and fibromyalgia. (Of course, Caronia also claimed that Xyrem
was “very safe” in contradiction to its black box warning, without mentioning
the contraindications. Gleason, a
co-conspirator, advocated its use in treating obesity and chronic fatigue and
claimed that “for the problems with insomnia there's no better drug, no safer
drug, it's as safe as Ambien and Sonata ....”
Caronia’s pay was dependent on his sales; he was unable to meet his
sales targets, and at the time was ranked near the very bottom of Orphan’s
sales force.) This was speech used
simply as evidence of Xyrem's intended uses, which is totally okay under the
First Amendment.
The majority tried to suggest that its reasoning left open the
possibility that speech may serve as evidence of intent to introduce a misbranded
drug into interstate commerce, but that in this particular case “the government
clearly prosecuted Caronia for his words—for his speech” and not for conspiring
to introduce a misbranded drug into interstate commerce. The dissent disagreed, and (like me) failed to
see how the majority’s reasoning “would ever allow such speech to support a
conviction under [the misbranding provision].” The district court correctly instructed the
jury as to the necessary elements. When
it instructed the jury that “[a] misbranded drug may be shown by a promotion of
the drug by a distributor for an intended use different from the use for which
the drug was approved by the Food and Drug Administration,” it was explaining
the “objective intent” standard with respect to “intended uses.” In context, it was “instructing the jury that
promotion of an off-label use may demonstrate an objective intent that a drug
be used for off-label purposes—and thus that it is being placed into interstate
commerce without proper labeling.” And
that was no error. Nor did Caronia argue
that the instruction was erroneous or object to references to off-label
promotion in the summation.
“At bottom, the majority is troubled that ‘the simple promotion
of a drug's off-label use’ can lead to criminal liability under the FDCA.” But this was a significant departure from
precedent. Even Sorrell noted that “the First Amendment does not prevent
restrictions directed at commerce or conduct from imposing incidental burdens
on speech. That is why a ban on race-based hiring may require employers to
remove ‘White Applicants Only’ signs; … and why antitrust laws can prohibit
agreements in restraint of trade.”
True, introducing Xyrem into interstate commerce was
generally legal so long as the drug was not intended to be used for purposes
that lacked adequate directions on its labeling. And, absent Caronia's speech
(and speech by other Orphan representatives), the jury likely would not have
found that Xyrem was intended for such off-label uses. But it’s consistent with
the First Amendment that otherwise permissible conduct can be impermissible if
undertaken with a prohibited motive, which may be proven with evidence of the
actor’s speech, e.g., sex discrimination proved by an employer’s statements
evidencing improper motive. “Simply put,
that Caronia was otherwise free to introduce Xyrem into interstate commerce
does not give him a First Amendment right to introduce it into interstate
commerce for any intended purpose he wished.”
Caronia argued that off-label use was itself lawful. That wasn’t enough. “There might be no law forbidding the
consumption of arsenic. But this would not endow Abby and Martha with a First
Amendment right to offer arsenic-laced wine to lonely old bachelors with the
intent that they drink it. And any statements Abby or Martha made suggesting
their intent—even if all of the statements were truthful and not
misleading—would not be barred from evidence by the First Amendment simply
because arsenic might legally be consumed.”
In a footnote, the dissent pointed out that
speech encouraging others to engage
in certain legal conduct has long been directly regulated or prohibited in a
variety of areas. For example, an insider who is privy to an impending
corporate merger is prohibited from telling a friend that one of those
companies is a good buy—even if that statement is truthful and even if the
friend (who does not realize that she has just been made privy to material
nonpublic information) may legally buy stock in that company. Each of two corporations
may be free to raise its prices, but the Sherman Act forbids them from
discussing such a course of action. Likewise, nonlawyers are forbidden from
giving legal advice even if the advice is sound, and unlicensed laypersons may
not provide medical diagnoses, regardless of their accuracy.
Of course, maybe that’s all unconstitutional, if the First
Amendment eats the regulatory state.
Other laws, such as the ones at issue in Sorrell and Thompson v. Western States
Medical Center, 535 U.S. 357 (2002), targeted speech directly. If the jury had a reasonable doubt about
whether Caronia actually intended to sell Xyrem, Caronia couldn’t have been
convicted, no matter what he said. But
the pharmacies in Sorrell and Thompson violated the law as soon as
they disseminated information/advertised: speech alone was enough to trigger
punishment, whereas speech alone is insufficient to constitute misbranding.
This was the teaching of Whitaker
v. Thompson, 353 F.3d 947 (D.C.Cir.2004), rejecting a a First Amendment right
to label a product with a drug claim despite its lack of FDA approval:
Assuming that the government may
condition the sale of drugs on passage through the elaborate testing that the
statute requires ..., the key step is the [ ]FDCA principle that classification
of a substance as a ‘drug’ turns on the nature of the claims advanced on its
behalf. That principle, in turn, rests on the idea that claims about a product
by its manufacturer and vendors, including product labeling, serve as evidence
of the sellers' intent that consumers will purchase and use the product for a
particular purpose—and, therefore, as evidence whether the product is or is not
a drug. … [I]t is constitutionally permissible for the FDA to use speech, in
the form of labeling, to infer intent for purposes of determining that [the
plaintiff's] proposed sale of saw palmetto extract would constitute the
forbidden sale of an unapproved drug.
Caronia argued that the Whitaker
drug couldn’t be sold lawfully, meaning that there were no lawful off-label
uses to promote. But the product in Whitaker, a plant extract, could be sold
lawfully as long as it wasn’t a “drug,” “and whether it was a drug depended
entirely upon the plaintiff's speech, as evidence of his intent, when he
offered it for sale. That case is therefore indistinguishable from this case;
indeed, even if the FDA had not approved Xyrem for any medical uses at all,
Caronia could presumably have sold Xyrem as an industrial solvent if it
happened to be excellent at removing grease and grime…. [T]he simple fact that
one is generally allowed to sell something does not imbue one with a
constitutional right to sell it for any intended purpose.”
Even if using Caronia’s speech as evidence of his intent
required Sorrell/Central Hudson
scrutiny, it met that test. “[O]ne of
the [FDCA]'s core objectives is to ensure that any product regulated by the FDA
is safe and effective for its intended use.” Brown & Williamson, 529 U.S.
at 133 (2000). Premarket approval is the
central mechanism to implement this objective. Before the FDCA, the government
had to proceed against misleading claims after the drugs were marketed. The 1938 act required safety preapproval, and
the 1962 amendments added premarket approval for effectiveness for stated uses,
based on concerns that “doctors could not adequately evaluate frequently
misleading claims by drug manufacturers without a body of objective, reliable
information.”
According to the Supreme Court in Western States, “[p]reserving the effectiveness and integrity of
the FDCA's new drug approval process is clearly an important governmental
interest” and “the Government has every reason to want as many drugs as
possible to be subject to that approval process.” The prohibition on offlabel marketing directly
advances this interest. The ability to
market FDA-approved drugs for unapproved uses would leave little incentive to
seek FDA approval for those uses.
Prohibiting off-label promotion is one of the few mechanisms available
to encourage use of the approval process.
The majority was impressed that doctors can prescribe drugs
for off-label purposes, and patients can use them:
But this is also true for
substances that have not been approved by the FDA for any medical use at all.
The law generally permits a hardware store to sell turpentine, and though such
conduct may not be advisable, the law generally permits a consumer to purchase
that turpentine and use it as a pain reliever. Under the majority's reasoning,
then, any substance that may be legally sold for some purpose may be promoted
by its manufacturer for any purpose—so long as the manufacturer's statements
are merely unsubstantiated, rather than demonstrably false or misleading. But
this reasoning would invalidate the very definitions of “drug” and “device”
that undergird the entire FDCA.
The majority emphasized that the prohibition was
speaker-based. “But drug manufacturers
are the precise group that the government must encourage to participate in the
new drug approval process. Indeed, if the prohibition applied to any broader
class of speakers, it would likely fail Central
Hudson's fourth requirement that a regulation be ‘narrowly drawn.’” Whereas in Sorrell, the law didn’t promote the interest in protecting patient
privacy because it applied only to a small subset of the groups who could
compromise privacy, drug manufacturers were the entirety of the group who could
undermine the NDA process by not participating in it.
Also, allowing the promotion of off-label uses would
undermine the approval process even for new drugs. Approval requires consideration of safety and
effectiveness. “If a drug manufacturer
must be allowed to distribute a drug for any use so long as it is approved for
one use, the government's balancing of a drug's benefits against its risks
becomes very difficult or even impossible. Drugs viewed as safe for certain
uses might be considered unsafe overall if the benefits and risks being weighed
are not for a specific intended use but rather for any use at all, whether
supported by evidence or not.” Thus, the
ban on off-label promotion is not just a paternalistic attempt to shield
doctors and patients from truthful information.
It makes the whole regulatory scheme work. “[I]f drug manufacturers have
a First Amendment right to distribute drugs for any use to physicians or even
directly to patients, then the entire FDCA may well be unconstitutional.”
Banning off-label promotion by manufacturers was also the
least restrictive alternatives; nothing in the majority’s list would be
similarly effective.
Disclaimers etc.
wouldn’t leave any incentive to submit drugs for FDA approval, and would
encourage promotion based on data much less reliable than that required for FDA
approval.
(The court cited conclusions
that most prescriptions for off-label use, 73%, have little or no scientific
support. See
Randall
S. Stafford, Regulating Off–Label Drug Use: Rethinking the Role of the FDA,
358 New Eng. J. Med. 1427, 1427 (2008).)
Ceilings on off-label prescriptions would require data from “countless”
doctors and patients and could “needlessly (and simultaneously) result in the
denial of some effective treatments and the overprescription of ineffective and
even dangerous ones.”
A ban on off-label
prescriptions “would constitute an unprecedented intrusion into the practice of
medicine, and would result in perhaps an even greater restriction on speech.”
Most importantly, because what is a “drug”
(or “device”) depends on intended use, often established by reference to
speech, the majority’s less-restrictive-alternatives analysis is equally
applicable to the entire FDCA scheme.
The idea that the FDCA was content- and speaker-based added
nothing. “Every commercial speech case,
by its very nature, involves both content- and speaker-based speech
restrictions. Yet the Supreme Court has long acknowledged—and acknowledged
again in Sorrell—that ‘the
government's legitimate interest in protecting consumers from commercial harms
explains why commercial speech can be subject to greater governmental
regulation than noncommercial speech.’” Plus, the government’s interest here
was in preventing dangerous products with false or misleading labels, and
insuring a base of reliable, objective information about prescription
drugs. This is a core Central Hudson case even after Sorrell.
(The Supreme Court has applied Central
Hudson to statutes that provide for or allow criminal punishment for
speech.)
While the simple fear that people will make bad decisions
with truthful information can’t justify content-based burdens on speech, that
doesn’t mean that “conveying non-demonstrably false information to consumers
must take precedence over all competing government interests.” The dissent concluded by pointing out that the
circuit hadn’t applied heightened scrutiny in other cases involving the use of
speech as evidence of intent, such as antidiscrimination cases or prosecutions
for criminal inducement, attempt, and conspiracy. The majority decision “calls into question a
fundamental regime of federal regulation that has existed for more than a
century,” and thus Judge Livingston dissented.
Here’s
a more sanguine take from the Drug & Device Law blog, which likes the
new First Amendment defense for off-label promotion (and considers Caronia a
good guy who didn’t do anything wrong; compare what he said about safety and
teenagers). I think that analysis is wrong, though clever; though it initially
says that there’s only a First Amendment defense for truthful speech, the core
question is whether “intended use” and “misbranding” can mean what the FDA
interprets them to mean. If they can, then Caronia engaged in misbranding; if
they can’t, then off-label promotion isn’t misbranding and the government can’t
constitutionally stop drugmakers from promoting—including mass market
advertising—unapproved indications for approved drugs.
Though it could still prosecute false or
misleading statements, the scienter requirement would be quite different:
knowing falsity, rather than knowing off-label promotion. How many sales reps
will
know the information they’ve
been given by in-house sources is false, as opposed to knowing that the indication they're promoting isn't on the label?
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