An unfortunate aspect of our legal system is that many important legal issues are not resolved by the courts because a controversy is not only too big to try, but also too big to be filed. A good example is federal-government-threatened civil and criminal claims against pharmaceutical manufacturers for off-label promotion, i.e., promotion of pharmaceutical products for uses other than those described on their FDA-approved labeling. Pre-litigation settlements in these cases are negotiated in the shadow of the law and, lacking a robust set of court decisions on the scope of liability, potential defendants are bludgeoned into settlements because of substantial uncertainty over the scope of legitimate claims that could result in, effectively, near death sentences. Not surprisingly, in this environment, manufacturers facing threatened off-label marketing prosecution have agreed to enormous settlement payments, recently as large as $3 billion.
The U.S. Court of Appeals for the Second Circuits recent opinion in United States v. Caronia, No. 09-5006-cr (2d Cir. Dec. 3, 2012), is a welcome addition to the body of appellate law in this area. This closely watched and long-awaited appeals court decision calls into question the constitutionality of the FDAs enforcement regime regarding off-label marketing. Applying the Supreme Courts recent decision in IMS Health v. Sorrell, 131 S. Ct. 2653 (2011), the court (2-1) reversed on free speech grounds the criminal conviction of a pharmaceutical sales representative for off-label marketing and cast doubt on the governments authority to regulate or criminalize the dissemination by pharmaceutical manufacturers and their employees of truthful information regarding the use of their products for unlabeled indications. The Caronia decision represents (a) a significant development in the regulation of pharmaceutical sales and marketing practices and, more broadly, (b) another example of the recent judicial expansion of corporate free speech rights.
