January 25, 2012

Government's Response to Pharmaceutical Companies' "Catch-22" Raises Additional Questions

Holland & Knight Alert
William F. Gould

“[W]hen a manufacturer speaks about an on-label use of its drug in a medical facility where physicians prescribe the drug off-label, the manufacturer is caught in a Catch-22: changing the drug’s labeling to add directions for the off-label use violates the Act’s criminal ‘new drug’ rule, but based on the government’s view of the FDA’s ‘intended use’ regulations, not changing the labeling to add those directions violates the Act’s criminal ‘misbranding’ rule. The manufacturer’s truthful speech about on-label use of its drug thus violates at least one of these criminal provisions.” 1


In the fall of 2011, Par Pharmaceutical, Inc. filed a complaint in federal district court seeking declaratory and injunctive relief to address the perplexing laws and regulations surrounding “off-label” marketing. As summarized above in the excerpt from Par’s brief, the company, like many in the industry, believes it faces a lose-lose situation when it seeks to comply with seemingly contradictory laws, regulations and government enforcement theories applicable to pharmaceutical marketing in situations where physicians may prescribe a drug off-label (i.e., using the drug for a different use than the FDA-approved indications). Par complained that the existing regulatory regime, as articulated by the government in many of its meetings with industry, unconstitutionally impairs the First Amendment by chilling the company’s ability to provide truthful and non-misleading information about the approved use of a drug to physicians in settings where the drug is likely to be prescribed off-label.

Government’s Response

In response to Par’s concerns, the government filed a brief seeking dismissal of the case. The brief was unsealed this month. The government’s brief expressly allays some of Par’s concerns, clarifying that “simply providing truthful and non-misleading information about the approved use of its drug to physicians [in potentially off-label prescription settings] would not subject [a company] to prosecution.” The government’s position clarifies that merely speaking about an on-label use in a setting where physicians may prescribe the drug off-label would not in itself result in a criminal prosecution. However, the government goes on to say that:

Of course, marketing a drug in settings where few if any patients come within the scope of the drug’s approved indications may well prompt the government to inquire into the manufacturer’s marketing activities.

So, the government asserts that it will not prosecute a company solely for providing truthful and non-misleading information regarding the approved use of a drug in a potentially off-label setting, but such a scenario may suffice to trigger an intrusive government investigation into the company’s marketing practices.

The government also responded to Par’s concern about marketing activities where a company knows of off-label usage. Par’s complaint explained that companies fear that mere knowledge of off-label usage by a drug’s purchasers is sufficient to incur criminal liability because according to FDA regulations such knowledge changes the “intended use” (and thus labeling requirements under the FDCA) of the drug ? a very real concern inasmuch as FDA’s two “intended use” regulations (21 CFR 201.128 for drugs and 21 CFR 801.4 for medical devices) expressly state the proposition.

The government’s brief clarified that

[k]nowledge that a drug is being offered and used for unapproved purposes is one of the circumstances that may be taken into account in determining intended use, but nothing in § 201.128 [the “intended use” regulation governing drugs] means that knowledge of unapproved uses is sufficient by itself to establish intent.

Again, this reassurance comes with the significant caveat that the combination of a company’s knowledge and technical support for the customer’s off-label use may be taken as evidence of a device’s intended use.2 This caveat is notable because it implies that the government believes it could bring a criminal case for misbranding in such a scenario if the combination of both knowledge of off-label use and technical support for that use was present.

Practical Advice

The government’s brief allays some industry fears expressed in Par’s suit by expressly explaining that promotional speech related to on-label usage will not, by itself, lead to enforcement actions ? even in predominantly off-label settings. However, pharmaceutical and medical device companies should remain cautious when engaging in marketing activities aimed at prescribers likely to use regulated products off-label because the very same activities which the government admits would not warrant a prosecution could still trigger an intrusive investigation.

1 Complaint, Par Pharmaceutical v. United States, et al., No. 1:11-cv-1820 (D.D.C. filed Oct. 14, 2011) at ¶ 37.

2 Medical devices are governed by a separate "intended use" regulation, 21 C.F.R. § 801.4. While the government’s brief seems to conflate the two "intended use" regulations, treating the standards for drugs and medical devices interchangeably, it is not clear if there are substantive differences in how the government interprets the facially similar regulations.

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