United States v. Caronia

• Decision Date: 03 December 2012
• Docket Number: Docket No. 09–5006–cr.
• Citation: 703 F.3d 149
• Parties: UNITED STATES Of America, Appellee, v. Alfred CARONIA, Defendant–Appellant.
• Court: U.S. Court of Appeals — Second Circuit

703 F.3d 149

UNITED STATES Of America, Appellee,

v.Alfred CARONIA, Defendant–Appellant.^*

Docket No. 09–5006–cr.

United States Court of Appeals,Second Circuit.

Argued: Dec. 2, 2010.

Decided: Dec. 3, 2012.

Douglas Letter and Martin Coffey (Jo Ann M. Navickas, Assistant United States Attorney, Scott R. McIntosh, Attorney, Appellate Division, United States Department of Justice, Anne K. Walsh, Associate Chief Counsel, Office of General Counsel, Food and Drug Division, on the brief), for Loretta E. Lynch, United States Attorney for the Eastern District of New York, Brooklyn, NY, for Appellee.

Jennifer L. McCann (Thomas F. Liotti, on the brief), Law Offices of Thomas F. Liotti, Garden City, NY, for Defendant–Appellant.

Eric E. Murphy, Jones Day (Michael A. Carvin, Jones Day, Daniel J. Popeo, Richard A. Samp, Washington Legal Foundation, on the brief), for Amicus Curiae Washington Legal Foundation.

Joan McPhee, Ropes & Gray LLP (Douglas Hallward–Driemeier, Alan Bennett, Ropes & Gray LLP, and Paul Kalb, Coleen Klasmeier, Sidley Austin LLP, on the brief), for Amicus Curiae The Medical Information Working Group.

Before: RAGGI, LIVINGSTON, and CHIN, Circuit Judges.

Judge LIVINGSTON dissents in a separate opinion.

CHIN, Circuit Judge:

Defendant-appellant Alfred Caronia appeals from a judgment of conviction entered in the United States District Court for the Eastern District of New York (Eric N. Vitaliano, J.) on November 30, 2009, following a jury trial at which Caronia was found guilty of conspiracy to introduce a misbranded drug into interstate commerce, a misdemeanor violation of 21 U.S.C. §§ 331(a) and 333(a)(1). Specifically, Caronia, a pharmaceutical sales representative, promoted the drug Xyrem for “off-label use,” that is, for a purpose not approved by the U.S. Food and Drug Administration (the “FDA”). Caronia argues that he was convicted for his speech—for promoting an FDA-approved drug for off-label use—in violation of his right of free speech under the First Amendment. We agree. Accordingly, we vacate the judgment of conviction and remand the case to the district court.

STATEMENT OF THE CASE

1. The Regulatory Scheme

Under the Federal Food, Drug and Cosmetic Act (the “FDCA”), before drugs are distributed into interstate commerce, they must be approved by the FDA for specific uses. 21 U.S.C. § 355(a). To obtain FDA approval, drug manufacturers are required to demonstrate, through clinical trials, the safety and efficacy of a new drug for each intended use or indication. 21 U.S.C. § 355(d); see Weinberger v. Hynson, 412 U.S. 609, 612–14, 93 S.Ct. 2469, 37 L.Ed.2d 207 (1973).¹

Once FDA-approved, prescription drugs can be prescribed by doctors for both FDA-approved and -unapproved uses; the FDA generally does not regulate how physicians use approved drugs. See Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341, 350, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001); Weaver v. Reagen, 886 F.2d 194, 198 (8th Cir.1989); John E. Osborn, Can I Tell You The Truth? A Comparative Perspective on Regulating Off–Label Scientific and Medical Information, 10 Yale J. Health Pol'y L. & Ethics 299, 303 (2010) ( “Physicians may prescribe FDA-approved drugs ... for any therapeutic use that is appropriate in their medical judgment.”); Randall S. Stafford, Regulating Off–Label Drug Use: Rethinking the Role of the FDA, 358 N. Engl. J. Med. 1427, 1427 (2008) (discussing 2003 study of 160 common drugs where off-label use accounted for approximately 21 percent of prescriptions).

Indeed, courts and the FDA have recognized the propriety and potential public value of unapproved or off-label drug use. See Buckman, 531 U.S. at 350, 121 S.Ct. 1012 (Off-label use is an “accepted and necessary corollary of the FDA's mission to regulate in this area without directly interfering with the practice of medicine.”); Weaver, 886 F.2d at 198–99 (“FDA[-]approved indications were not intended to limit or interfere with the practice of medicine nor to preclude physicians from using their best judgment in the interest of the patient.” (internal quotation marks omitted)); U.S. Food and Drug Administration, Draft Guidance, Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices 3 (2009) (“[O]ff-label uses or treatment regimens may be important and may even constitute a medically[-]recognized standard of care.”). ² The FDA itself has observed:

Once a drug has been approved for marketing, a physician may prescribe it for uses or in treatment regimens or patient populations that are not included in approved labeling. Such “unapproved” or, more precisely, “unlabeled” uses may be appropriate and rational in certain circumstances, and may, in fact, reflect approaches to drug therapy that have been extensively reported in medical literature.

U.S. Food and Drug Administration, FDA Drug Bulletin, 12 FDA Drug Bull. 1, 5 (1982).

The FDCA prohibits “misbranding,” or “[t]he introduction or delivery for introduction into interstate commerce of any ... drug ... that is ... misbranded.” 21 U.S.C. § 331(a). A drug is misbranded if, inter alia, its labeling fails to bear “adequate directions for use,” 21 U.S.C. § 352(f), which FDA regulations define as “directions under which the lay[person] can use a drug safely and for the purposes for which it is intended,” 21 C.F.R. § 201.5.³ FDA regulations define intended use by reference to “the objective intent of the persons legally responsible for the labeling of drugs,” which may be demonstrated by, among other evidence, “oral or written statements by such persons or their representatives” and “the circumstances that the article is, with the knowledge of such persons or their representatives, offered and used for a purpose for which it is neither labeled nor advertised.” 21 C.F.R. § 201.128.

The consequences for misbranding are criminal. 21 U.S.C. § 333(a)(2) ( “[I]f any person commits such a violation ... such persons shall be imprisoned for not more than three years or fined not more than $10,000, or both.”). Pharmaceutical manufacturers and their representatives can face misdemeanor charges for misbranding or felony charges for fraudulent misbranding. 21 U.S.C. § 333(a); see Osborn, Can I Tell You The Truth?, supra, at 328–29 (collecting cases). The government has repeatedly prosecuted—and obtained convictions against—pharmaceutical companies and their representatives for misbranding based on their off-label promotion. See, e.g., Judgment, United States v. GlaxoSmithKline, LLC, 12–cr–10206 (RWZ), ECF Doc. No. 13 (D.Mass. July 10, 2012) (Information, GlaxoSmithKline, No. 12–cr–10206 (RWZ), ECF Doc. No. 1 (D.Mass. July 2, 2012)); Judgment, United States v. Merck Sharp & Dohme Corp., No. 11–cr–10384 (PBS), ECF Doc. No. 30 (D.Mass. May 18, 2012) (Information, Merck, No. 11–cr–10384 (PBS), ECF Doc. No. 1 (D.Mass. Nov. 22, 2011)); Agreed Order of Forfeiture, United States v. Abbott Labs., No. 12–cr–26 (SGW), ECF Doc. No. 7 (W.D.Va. May 7, 2012) (as a result of the guilty plea to the Information (Information, Abbott, No. 12–cr–26 (SGW), ECF Doc. No. 5–1 (W.D.Va. May 7, 2012))); Judgment, United States v. Allergan, Inc., No. 10–cr–375 (ODE), ECF Doc. No. 20 (N.D.Ga. Oct. 7, 2010) (Information, Allergan, No. 10–cr–375 (ODE), ECF Doc. No. 1 (N.D.Ga. Sept. 1, 2010)); see Sentencing Transcript, Merck, No. 11–cr–10384 (PBS), ECF Doc. No. 27 (D. Mass. April 30, 2012) (“I want to emphasize that off-label marketing has been ... a big problem .... I hope in a way that the ... fact that all these cases are being pressed by the federal and state governments, the 44 state Attorney Generals, will be a signal that it isn't acceptable conduct.”); see also Press Release, U.S. Department of Justice, GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data, Largest Health Care Fraud Settlement in U.S. History (July 2, 2012); Osborn, Can I Tell You The Truth?, supra, at 328–29.

The FDCA and its accompanying regulations do not expressly prohibit the “promotion” or “marketing” of drugs for off-label use. The regulations do recognize that promotional statements by a pharmaceutical company or its representatives can serve as proof of a drug's intended use. See21 C.F.R. § 201.5. Off-label promotional statements could thus presumably constitute evidence of an intended use of a drug that the FDA has not approved. See id. The FDA, however, has concluded 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.’ ” See FDA, Draft Guidance, supra, at 2–3 (quoting 21 U.S.C. § 352(f)); accord United States v. Caronia, 576 F.Supp.2d 385, 392 n. 5 (E.D.N.Y.2008); see also Gov't Br. 48 n.18 (contending no set of directions can constitute adequate labeling for drug's off-label use). Thus, the government has treated promotional speech as more than merely evidence of a drug's intended use—it has construed the FDCA to prohibit promotional speech as misbranding itself.

2. The Facts⁴a. Orphan Medical and Xyrem

Orphan Medical, Inc. (“Orphan”), now known as Jazz Pharmaceutical, was a Delaware-incorporated pharmaceutical company that primarily developed drugs to treat pain, sleep disorders, and central nervous system disorders. Orphan manufactured the drug Xyrem, a powerful central nervous system depressant. In 2005, after Jazz Pharmaceuticals acquired Orphan, Jazz continued to manufacture and sell Xyrem, grossing $20 million in combined Xyrem sales in 2005.

Xyrem can cause serious side effects, including difficulty breathing while asleep, confusion, abnormal thinking, depression, nausea, vomiting, dizziness, headache, bedwetting, and sleepwalking. If abused, Xyrem can cause additional medical problems, including seizures, dependence, severe...