Nearly three years ago, the Second Circuit Court of Appeals vacated the criminal conviction of a pharmaceutical sales representative, who was convicted of conspiring to distribute misbranded drugs in interstate commerce, in violation of the Food, Drug & Cosmetic Act. In vacating the conviction, the Second Circuit held that it would be unconstitutional to impose criminal liability for truthful, off-label promotion of the drug.
Bound by this appellate court decision, a lower court in the Second Circuit recently granted a pharmaceutical manufacturer’s motion for preliminary injunction against the FDA, ruling that the manufacturer may distribute certain “truthful, non-misleading” information about its drug to healthcare prescribers. In that case, the court flatly stated that the FDA may not bring an enforcement action against the manufacturer “based on truthful promotional speech alone consistent with the First Amendment.” Within hours of this court decision, defense law firms were touting this decision as “one of the most significant rulings concerning First Amendment protection for a pharmaceutical manufacturer’s off-label promotion of an otherwise approved drug.”
These decisions will have little to no impact on the ongoing fight against off-label promotions under the False Claims Act (FCA).
In 2013, the Justice Department filed a well-reasoned Statement of Interest (SOI) in a district court in the Second Circuit, arguing for the continued viability of FCA actions predicated on off-label promotions in civil cases.
The SOI argued that the Second Circuit’s decision pertained to a criminal matter, which is “inappositive” to civil False Claims Act matters. Further, the SOI stressed, “the FCA does not prohibit off-label promotion of prescription drugs; rather, the FCA prohibits conduct that causes the submission of false claims to the Government for payment.” In turn, because the FCA does not penalize speech, the SOI posits that the First Amendment is not implicated. Lastly, the SOI reminds the court of the Second Circuit’s position that “off-label promotion that is false or misleading is not entitled to First Amendment protection.”
All of DOJ’s arguments remain valid, even after this “most significant” district court decision. However, the biggest takeaway, both from the SOI and the court decisions, remains that the FCA reaches “false or misleading” promotions that cause the submission of off-label claims to government healthcare programs. In other words, when a pharmaceutical manufacturer lies to healthcare providers to drive up sales, it cannot hide behind the First Amendment and avoid FCA liability.
More information for whistleblowers is located at the Nolan Auerbach & White website.