Latest First Amendment Off-Label Notes - Has DoJ Finally Come Around?

by Reed Smith

As we mentioned before (when we provided a discount) Bexis spoke earlier this week at the ACI Promotional Review Summit on the “Brave New World . . . Post-Amarin” – that is to say, about the First Amendment and off-label use/promotion.  Just about all our readers know that Bexis has been a long-time First Amendment advocate with respect to truthful off-label speech, since the beginning of this blog, and before.
We’re not going to rehash any of that.  There are, however, a couple of new First Amendment developments that we learned about at the conference that we want to pass along.  The first is that the Ninth Circuit (or at least a panel of that notably fractious court) has fallen into line behind Sorrell v. IMS Health, Inc., 131 S. Ct. 2653 (2011), and recognized that Sorrell strengthened First Amendment protections for commercial speech – at least where it’s truthful, which is the assumed cornerstone of our position on off-label promotion in the first place.
The new case is Retail Digital Network, LLC v. Appelsmith, ___ F.3d ___, 2016 U.S. App. Lexis 140, slip op. (9th Cir. Jan. 7, 2016).  It’s not about drugs, devices, or the FDCA, but rather about alcoholic beverage advertising.  At issue was another absolute ban on commercial speech that failed to take truth or falsity into consideration.  The state of California, in order to prevent kickbacks and other preferential treatment (taking the state’s professed interest at face value), flatly prohibits manufacturers of alcoholic beverages from any paid advertising at retail establishments.  Id. at *2-3 (citing Cal. Bus. & Prof. C. §25503(f)-(h)).  Almost 30 years ago the Ninth Circuit held this provision constitutional under the pre-Sorrell commercial speech test established in Central Hudson Gas & Electric Corp. v. Public Service Comm’n, 447 U.S. 557 (1980).  See Actmedia, Inc. v. Stroh, 830 F.2d 957 (9th Cir. 1986).  Retail Digital, however, held that Sorrell toughened First Amendment protections.  The Actmedia decision was “clearly irreconcilable” with Sorrell, because “Sorrell requires heightened judicial scrutiny of content-based restrictions on non-misleading commercial speech regarding lawful products, rather than the intermediate scrutiny” of Central HudsonRetail Digital, 2016 U.S. App. Lexis 140, at *3.
Actmedia and other Ninth Circuit precedent had, under Central Hudson “applied intermediate scrutiny to content-based and content-neutral regulations of commercial speech alike.”  Id. at *17 (citations omitted).  Sorrell, however, made clear that content-based (and speaker-based) commercial speech restrictions must pass a stricter test than classic Central Hudson.  Rather, “content- or speaker-based restrictions on non-misleading commercial speech regarding lawful goods or services must survive ‘heightened judicial scrutiny.’”  Id. (quoting Sorrell, 131 S. Ct. at 2664).  Sorrell requires more – if exactly how much more is still unsettled – scrutiny than “intermediate scrutiny” under Central Hudson:
Consistent with Sorrell’s plain language, we rule that Sorrell modified the Central Hudson test for laws burdening commercial speech.  Under Sorrell, courts must first determine whether a challenged law burdening nonmisleading commercial speech about legal goods or services is content- or speaker-based.  If so, heightened judicial scrutiny is required.
Id. at *17-18 (citing Sorrell, 131 S. Ct. at 2664).  Such more exacting scrutiny can be conducted within the Central Hudson framework, but the third prong of a “heightened scutiny” analysis now requires the government to establish that its restriction will alleviate “real” harms “to a material degree.”  Id. at *19.  Likewise, the beefed-up fourth prong now mandates that “the government bears a heavier burden of showing that the challenged law ‘is drawn to achieve [the government's substantial] interest.’”  Id. (quoting Sorrell, 131 S. Ct. at 2667-68).
Sorrell and Actmedia are clearly irreconcilable. . . .  Sorrell modified the Central Hudson analysis by requiring heightened judicial scrutiny of content-based restrictions on non-misleading advertising of legal goods or services. . . .  Thus, Actmedia’s overall analytical framework of intermediate scrutiny cannot be reconciled with Sorrell’s framework of heightened judicial scrutiny.
Id. at *24-25 (citations and quotation marks omitted).
Like the alcohol advertisement ban in Retail Digital, the FDA’s off-label promotion ban is a content-based and speaker-based flat prohibition of commercial speech without regard to its truth.  The “content” (or “topic” as phrased in Reed v. Town of Gilbert, 135 S. Ct. 2218, 2227 (2015)), is off-label use – a completely legal and commonplace medical practice.  The targeted speakers are FDA-regulated manufacturers and their personnel.  Everybody else, including idiot bloggers, can advocate whatever off-label use they want for whatever reason they want.
The upshot of Retail Digital is that United States v. Caronia, 703 F.3d 149 (2d Cir. 2012), and Amarin Pharma, Inc. v. FDA, ___ F. Supp.3d ___, 2015 WL 4720039 (S.D.N.Y. Aug. 7, 2015), are, if anything, conservative First Amendment decisions post-Sorrell.  While they both cited Sorrell, their Central Hudson analyses reflected only the usual Central Hudson “intermediate scrutiny,” rather than more rigorous “heightened scrutiny” under SorrellCaronia, 702 F.3d at 165-68; Amarin, 2015 WL 4720039, at *24-26.  These cases’ Central Hudson analyses includes no statements, or citations (as appear in Retail Digital), indicative that anything beyond application of the usual Central Hudson criteria took place.  In Caronia, for example, the court found the first two Central Hudson prongs “easily satisfied” and that the latter two required only that “the regulation directly advance the government's interests and be narrowly drawn” – which is plain vanilla Central Hudson.  702 F.3d at 165-66.
Retail Digital is further evidence that the noose is tightening around any ban on off-label promotion that does not limit itself to statements that are false or misleading.  Indeed, the government itself – at least the Department of Justice, if not the FDA − may finally be reconciling itself to post-Sorrell constitutional precedent.  This brings us to the second new development discussed (this time, not by Bexis) at the ACI summit.  We learned about another government off-label promotion prosecution that will soon go to trial.  United States v. Vascular Solutions, Inc., No. SA-14-CR-926-FB (W.D. Tex.) (on PACER).  The defendants in Vascular Solutions have raised a First Amendment defense, so far unsuccessfully, because, at least at the dismissal stage, the government wasn’t prosecuting truthful speech:
The United States’ claims are premised on allegations that defendants’ off-label promotion of the . . . devices for the treatment of [an off-label use] was not solely truthful, but rather was misleading and false.  The FDCA does prohibit untruthful off-label promotion.  The First Amendment does not protect off-label promotion that is false or misleading.
United States v. Vascular Solutions, Inc., No. SA-14-CR-926-FB, slip op. at 5-6 (W.D. Tex. Nov. 16, 2015) (citations omitted).
Now, with trial approaching (criminal prosecutions, subject to speedy trial requirements, move much faster than civil litigation), the government has to prove its case.  The United States recently submitted jury instructions on what is illegal under the FDCA and what is not.  In these instructions, the government at last abandons altogether the notion that the FDCA criminalizes truthful off-label promotion – the first time we are aware of the government making this concession:
Doctors may use medical devices that have been approved or cleared for one use for another use that has not been cleared or approved by the FDA.  This is often referred to as unapproved use or off-label use.  This is not illegal.  It is also not a crime for a device company or its representatives to give doctors wholly truthful and non-misleading information about the unapproved use of a device.
DoJ Proposed Jury Instructions, United States v. Vascular Solutions, Inc., at 31 (W.D. Tex., filed Jan. 7, 2016) (footnote omitted) (emphasis added).
Has anybody else seen the United States government make such a statement in a filed court document before?  We haven’t.  Heck, this isn’t too far from a jury instruction that we might submit – we don’t use “unapproved use,” of course (only “off-label”), we’d say “legal,” rather than “not a crime,” in a civil suit, and we don’t think “wholly” adds anything, but otherwise the legal proposition is what we’ve (at least Bexis) been arguing for decades.
All told, January 7, 2016, was a very good day for truthful off-label promotion.  The ACI Promotional Review Summit wasn’t bad either, since attendees learned about both of these recent developments – and now we’ve told you.

Written by:

Reed Smith

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