The First Amendment And "Off-Label" Promotion.

 
FREE EXCERPT

The now quite familiar headline almost screams: "Drug Company X Pays Government Many Millions [even billions] to Settle Off-Label Drug Promotion Case." Most of the media stories that accompany such headlines share certain common themes. First, the government's ability to secure a settlement means, of course, that the government extracted this large sum from Drug Company X without the government's substantiating at trial, let alone on appeal, the validity of the underlying legal theory or theories of the case, and also without the government's persuading a trier of fact that its version of the facts was more probable than whatever the company's defenses might have been.

And second, accounts of such settlements rarely assert that the settling drug company's troubles arose because the company made false or misleading statements about one of the company's drugs. Instead, Drug Company X found itself in the crosshairs because it made statements about its drug that were at odds with the drug's FDA-approved uses (indications) and FDA-approved labeling, even if the statements were factually true and not misleading. Attorneys involved in representing companies in the pharmaceutical or medical device industries, whether as inhouse counsel or as outside counsel, know that truthful, non-misleading statements about uses beyond those that the FDA has approved and as stated on the label can place a company in the unenviable position of being, like Drug Company X, the target of a False Claims Act case.

The focus of this article is the First Amendment principles involved in off-label promotion cases and some of the anomalies and implications of those cases. The anomalies are striking. It is, for example, not intuitive that it is permissible, if not required as a matter of the standard of medical care, for doctors to prescribe a medication "off-label" (that is, for uses beyond those that the FDA has approved as stated on the drug's label) while, at the same time, it is impermissible for the drug's manufacturer to promote truthfully the fact that doctors are using the drug off-label. Equally peculiar is the fact that it is entirely permissible for the doctor to promote his or her off-label use of the drug (assuming that the doctor is not connected to or compensated in any way by the drug company), but, again, the drug company is precluded from making the same promotional statements.

The Tension Between the First Amendment and the Regulation of Medical Products

An open marketplace of free expression, with a high tolerance for controversial ideas, is the core of the First Amendment. That open market First Amendment framework is at odds, however, with the tightly regulated medical product marketplace (when the term "medical products" is used in this article, it includes pharmaceuticals and medical devices). The regulated medical product marketplace has little tolerance for commercial speech promoting non-governmentally approved uses of a medical product.

The strictly enforced premise underlying the First Amendment open marketplace is that government is precluded from picking and choosing between the ideas it likes and the ones it does not. The rationale for the regulated drug product marketplace, in sharp contrast to this First Amendment model, is that only government is competent to determine which uses of a product are safe and effective (and thus approved) and, therefore, government is entitled to limit economically motivated speech to promote non-governmentally approved uses.

This clash between First Amendment and regulatory principles gets played out in its most graphic (and for industry most expensive) form because of the close and inevitable interplay between (a) the government's medical product approval/labeling scheme, (b) the government's involvement in paying billions of dollars annually for health care through Medicare and Medicaid, and (c) the False Claims Act (FCA). The government's position in FCA cases is that if the sales personnel, for example, of a medical products company promote the off-label use of one of the company's FDA-regulated products by touting truthfully off-label uses of the product and if the government pays for such off-label uses, then the government has paid a "false claim." The statutory penalties for violating the FCA are stiff. See 31 U.S.C. §3729 (a)(1)(g).

A fair reading of the extraordinarily rich body of First Amendment case law casts a long shadow over the government's theory in off-label promotion cases in which truthful statements trigger massive liability. As the large off-label FCA settlements confirm, however, the availability of strong defenses has seemingly made little difference to either the government or the companies it has pursued.

For the government, the incentives to bring these cases include the prospect of generating significant revenue all in the name of "fighting healthcare fraud." For industry, the incentives to settle and not to put the government's legal and factual theories to the test of full judicial scrutiny include avoiding the risk of indictment and avoiding the risk of exclusion from participation in receiving federal healthcare funds. A criminal indictment is a very heavy burden for any company, particularly a publicly traded company, and exclusion from the Medicare/Medicaid programs is effectively the economic death sentence.

There are, however, some contrary rumblings below the radar of the highly publicized settlements. These rumblings involve cases in which the relevant First Amendment-based arguments have been advanced. This article will review two of those cases. From there, we will examine how these off-label issues impact product liability tort cases. And finally, we will propose an approach that seeks to preserve the integrity of the government's drug labeling scheme while also respecting and preserving the First Amendment right of medical product companies to make truthful statements about their products.

The Allergan case

Allergan, Inc. v. United States, Case No. 1:09-cv-01879 (D.D.C.) ("Allergan"), was a civil declaratory judgment case in which the plaintiff, a pharmaceutical company, challenged FDA's prohibition of truthful, non-misleading off-label promotion of drugs....

To continue reading

FREE SIGN UP