On February 29, 2016, Minneapolis-based medical device company Vascular Solutions, Inc. (“VSI”) and its CEO Howard Root were acquitted by a jury of conspiracy and misbranding charges in a closely-followed trial in San Antonio, Texas. In a Federal grand jury indictment from November 2014, the government charged VSI and Root with orchestrating a scheme to hide from FDA the off-label promotion of its endovenous laser ablation device, which is used to treat varicose veins. VSI was represented by King & Spalding.
Prosecutors alleged that the company sought to promote its Vari-Lase Short Kit for an unapproved use. The procedure kit, which was one of VSI’s more than 100 medical devices, accounted for 0.1 percent of the company’s sales. The Federal government spent five years investigating the allegations after a former employee filed a whistleblower lawsuit against VSI. Over several weeks, the jury heard evidence from current and former employees, doctors, and other industry professionals. After less than two days of deliberations, however, the jury found the defendants not guilty on all counts.
The verdict is a blow to FDA’s enforcement program, as the agency hand-picked the case in an attempt to send a message to the pharmaceutical and medical device industries. The results come on the heels of several other setbacks to FDA’s ban on off-label promotion. In recent years, pharmaceutical and medical device companies have successfully argued that FDA regulations violate their First Amendment rights to free speech.
The verdict could cause FDA to reform its regulatory framework and enforcement policies. “These cases put considerably more pressure on FDA to relax its decades-old stance on off-label promotion, and to issue a policy that is consistent with the Constitution. The touchstone now is becoming whether marketing is truthful, not whether it is ‘on-label,’” John Richter and Mike Pauze of King & Spalding LLP told Bloomberg BNA.
King & Spalding partners Mike Pauze, John Richter and Rob Hur were lead counsel for VSI in the case.
Reporter, Peter Cooch, Washington, D.C., +1 202 626 9227, pcooch@kslaw.com.
