Off-Label Marketing and the First Amendment: Are Pharmaceutical Companies Protected?

The issue of off-label marketing raises a compelling question as to the relationship between the First Amendment’s protection of free speech and the various federal regulations prohibiting the practice of unlawful marketing of prescription drugs. As a review, off-label marketing occurs when a pharmaceutical company markets its product for use to treat conditions in a way that is not approved by the Food and Drug Administration. When a company wishes to introduce a new drug to the market, it must submit to rigorous tests and clinical trials before directly marketing to consumers. As a result of the outcome of these tests, the FDA determines the precise dosage amounts that are considered safe, as well as the conditions which the drug is designed to treat. Any advertising or marketing that encourages use of the drug that deviates from the approved uses is considered a violation of FDA standards and strictly prohibited by the False Claims Act for reimbursement by Medicare or Medicaid.

The Effects of Landmark Off-Label Marketing Case United States v. Caronia

As you can imagine, it did not take long for the pharmaceutical companies to devise a First Amendment challenge against limitations on their marketing rights. In a case of first impression, the Second Circuit took a look at this argument in 2012 and, to the surprise of many, sided with the defendant – a former pharmaceutical sales representative facing conspiracy charges and civil liability for the off-label marketing of the drug Xyrem. In its holding, the Court concluded that “the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of an FDA-approved drug.” (SeeUnited States v. Caronia, 703 F.3d 149 (2d Cir. 2012).)

While alarming at first blush, this holding does not directly impact off-label marketing cases as commenced under the False Claims Act. Caronia was a case filed under the federal Food, Drug, and Cosmetics Act, which imposes liability and culpability for the actual act of off-label marketing. The kind of conduct prohibited by the FCA is the subsequent submission of claims to Medicare and Medicaid for reimbursement of drugs prescribed pursuant to off-label marketing – a distinguishable act requiring a separate analysis. In fact, the Department of Justice submitted its opinion of the applicability of Caronia to FCA cases in the recent case U.S. ex rel. Cestra v. Cephalon, Inc.. In that case, the DOJ argued that the First Amendment does not protect the act of submitting false claims to Medicare and cannot possibly be considered a shield for this type of “speech.” Even if a drug maker’s off-label claims are completely truthful and non-misleading, the submission of a subsequent invoice to Medicare for reimbursement is still a false claim as Medicare and Medicaid expressly only reimburse claims for drugs used properly within the confines of the FDA’s approval.

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By | 2018-09-14T14:09:51+00:00 March 25th, 2014|Healthcare Fraud|