Hanna: Off Label Marketing

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Recently, the Second Circuit Court of Appeals handed a big win to
pharmaceutical companies to market their drugs for off-label uses.
Commentator and Vermont Law School Professor Cheryl Hanna ays the case might have
implications for Vermont’s ability to regulate corporations.

(Hanna) Albert Caronia was a pharmaceutical salesperson promoting a drug called Xyrem, approved by the FDA to treat narcolepsy.

are free to prescribe drugs, including Xyrem, for uses not approved by
the FDA, and off-label uses are widely practiced. But, the FDA forbids
drug manufacturers from marketing their drugs for off-label uses –
called "misbranding" – and offenders face criminal penalties as well as
significant fines.

Caronia got into trouble when the government
secretly recorded him and a company doctor promoting Xyrem for off-label
uses, including treating fibromyalgia. Caronia was convicted of
conspiracy to misbrand the drug.

He appealed, arguing that the
First Amendment prohibits the government from prohibiting speech that is
truthful, not misleading, and is simply informing doctors of a use that
would otherwise be legal.

The Second Circuit reversed the
conviction on narrow grounds, but nevertheless has made it harder for
government to regulate commercial speech.

Until a few years ago,
it was assumed that the government could restrict commercial speech for
a good reason. For example, the FDA argued that if Caronia could
encourage doctors to use Xyrem for other purposes, the FDA approval
process would be hindered and patients could be harmed.

But then
came Sorrell v. IMS, the 2011 case from Vermont in which the US Supreme
Court struck down a law prohibiting pharmaceutical companies from data
mining physician prescriptions to enhance their sales. The court found
that speech in the aid of pharmaceutical marketing was protected under
the First Amendment.

The Second Circuit relied heavily on that
decision when deciding Caronia. Just like in Vermont’s case, the
government was restricting the speech of pharmaceutical companies
without justification. Doctors could legal prescribe Xyrem for
fibromyalgia, so a drug representative could talk about it.

been reported that the FDA will not appeal the decision. It has decided
to wait to see what other circuits might do before risking a huge loss
before the Supreme Court that could undermine the entire way we regulate

Three lessons can be learned from Caronia: First, the
legislature needs to be careful what it wishes for. Vermont had hoped to
protect physician privacy, but the IMS case ended up doing more harm
than good. The law was over-reaching, and in response the Supreme Court
gave even greater protections for corporate speech than it needed to.

the Second Circuit remains a dangerous place for government regulators.
Lawmakers should at least be aware that our circuit may not be the best
place to test laws aimed at protecting consumers, but that also
implicate the First Amendment.

Finally, Caronia is just another
example of the federal courts granting greater speech rights to
corporations. You may agree or disagree with that position, but it is a
trend that is likely to continue.

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