In 2012, in United States v. Caronia, the Second Circuit overturned a criminal conviction of a pharmaceutical sales representative, holding that off-label promotions may be constitutionally-protected commercial speech if it is truthful and non-misleading. In the wake of this decision, pharmaceutical company-defendants have sought to stretch Caronia to shield their off-label promotions from civil False Claims Act liability. The Justice Department has responded by filing Statements of Interests, which seek to limit the application of Caronia to criminal cases and which stress that false or misleading off-label promotions are per se outside of First Amendment protections.

For example, the Government filed a Statement of Interest in U.S. ex rel. Cestra, et al. v. Cephalon, Inc. (S.D.N.Y.), arguing that an off-label promotion FCA case does not implicate the free speech concerns, for under the FCA it is “irrelevant whether a party causes the submission of a false claim by words, by conduct, or by a combination of both.” In Cestra, the Government argued that the “center question” remains “whether the defendant’s marketing caused the submission of false claims, i.e., claims for off-label uses that are not covered or reimbursable by federal health care programs.” (emphasis added)

Because Cestra was in line to be the first post-Caronia decision to wrestle with this issue in the civil FCA context, interested parties from the Government and the defense and relators’ bars have been watching this case closely. However, the issue may have to wait for some time, for the court recently granted the relator’s motion to transfer the case to the Eastern District of Pennsylvania, where a similar, earlier-filed qui tam action is currently pending. This motion was granted over the strong objections of the Defendant, who argued that the relator-whistleblower was seeking a transfer to sidestep the supposed limitations of the Second Circuit’s Caronia decision.   

More information for whistleblowers is located at the Nolan Auerbach & White website.