Earlier this month, the 2nd Circuit Federal Court of Appeals refused to prosecute pharmaceutical sales representative Alfred Caronia for conspiring to sell a drug “off-label” (without FDA approval for that indication). While Caronia was caught in the act, and the lower court found him guilty of the conspiracy, the majority in this 2-1 panel decision ruled the government was prosecuting Caronia for his First Amendment-protected speech, and vacated the lower court’s judgment. The punishment he avoided was no more than a $25 fine and one year’s probation, yet this case might go all the way to the Supreme Court.

The narrow reading of the court’s ruling is that it hinders the FDA’s ability to prosecute misdemeanor off-label marketing by sales representatives, forcing them to focus their energies on the bigger fish up the food chain, such as sales managers and corporations. The broad reading is that it eliminates the FDA’s power to prosecute for off-label marketing at all. Pro-pharma pundits claim the holding goes so far as to limit the government’s ability to bring a civil suit under the False Claims Act (FCA) for off-label sales. However, we cast a more skeptical eye. While we believe the case was wrongly decided, its impact as a precedent is likely limited to pharmaceutical sales representatives accused of a misdemeanor, not their bosses or the corporation.

Take Two of These and Call Me in the Morning

Here’s how the issues in this case play out. Imagine your doctor gives you a drug because you have insomnia and the bottle says “use as directed,” but the label gives you directions for people with some disease you’ve never heard of. You search for directions for use with insomnia and cannot find them – anywhere. You look closer at the bottle’s Black Box warning and see language that scares you: “This drug is a known drug of abuse. Even at recommended doses, use has been associated with confusion, depression and other neuropsychiatric events. Important adverse events associated with abuse of this drug include seizure, respiratory depression…. with instances of coma and death.”

You call your doctor who prescribed the drug, and he assures you that it is “perfectly safe.” He can’t remember where he got the idea, but he’s confident that a half dose should be fine for insomnia.

You take the drug, go to sleep, wake up three and a half hours later sweating profusely, take another dose, go to sleep again and sleepwalk into your neighbor’s yard. In the morning, your neighbor wakes you and invites you in for a much-needed cup of coffee. Luckily, she’s a lawyer. She goes online to find the drug company has been sued for fraud to the tune of $20 million, for marketing to patients, like you, that don’t have the disease indicated on the label. Moreover, the company failed to report 72 negative reactions and ten deaths last spring. As it turns out, your doctor got the idea to prescribe – and those directions – from a sales representative for the drug company, along with a doctor the sales rep recommended.

Who is at fault, here? Anyone? Everyone?

The Facts

This is the question explored in the Second Circuit’s majority opinion, along with a vigorous dissent. In 2002, Xyrem received FDA approval for one very narrow use: the treatment of cataplexy (weak or paralyzed muscles) associated with narcolepsy. The US population suffering from narcoleptic cataplexy is extremely small (between 20,000 and 50,000 patients). To expand its profit potential, Orphan Medical resorted to a marketing strategy designed to promote Xyrem for numerous unapproved indications. This marketing strategy led to $20 million in 2005 sales alone.

Orphan had a policy in place for what sales reps should do when asked by doctors about off-label uses of Xyrem: direct that doctor to fill out a request for information to be sent to the company, for the company to address. Yet, Mr. Caronia recommended prescribing the drug to patients as young as 14 for uses including fibromyalgia, chronic fatigue or chronic pain – even advising on which diagnostic codes to use. We know this because every word was being recorded by his potential “customer” – a doctor working off his plea deal with the government by serving as an informant for the FBI. It turns out Mr. Caronia was hired a few months into the investigation of illegal Xyrem marketing that led its manufacturer to pay a $20 million settlement with the US government in 2007.

The Law

Mr. Caronia’s case went before the 2nd Circuit Court of Appeals just after the Supreme Court’s Sorrell v. IMS decision on data mining. The majority in Caronia’s opinion accepted the sales representative’s interpretation of Sorrell as protecting his First Amendment right to say anything about Xyrem, as long as his statements did not reach the level of fraud, thus invalidating the most compelling evidence for misdemeanor misbranding: his speech. This, despite him calling the drug “perfectly safe” when it holds a black box warning. The majority here protects “truthful, non-misleading” off-label marketing, even if that speech is evidence of a conspiracy to bring drugs to market for unapproved purposes. This is a bad outcome when applied to the facts of this case, but a disastrous outcome when applied more broadly to corporate and individual prosecution under the FDCA.


Mr. Caronia’s case should not serve as precedent for a change in the way US courts interpret the FDCA. Drug companies have overwhelming incentives to maximize sales before patents run out, and sales representatives are under the gun to deliver those profits however possible. As products liability lawyer Bill Cash opines: “[d]rug sales representatives are low-level employees, often with little or no medical training, who have only one function: to push pills.” Given the vast difference in culpability between a sales representative and those at the top that knowingly apply the pressure to their own ends, the case is a poor choice for SCOTUS review of the breadth of the FDCA. Individual violators should be prosecuted when appropriate, but more importantly, companies should be held both criminally and civilly liable for the dangerous practice of off-label marketing. Any threat to that is a threat to consumers, to the intent of the FDCA and to the purpose of the Food and Drug Administration.

— Khadijah M. Britton, JD, Program Associate, Prescription Access and Quality