United States: Feds Make Ominous First Amendment Waiver Argument

Last Updated: July 27 2018
Article by James Beck

We've complained before about the federal government's monetization of First Amendment violations in the context of truthful promotion of off-label uses:

[T]he government has ruthlessly monetized its questionable ban on truthful off-label promotion for quite a few years now. Indeed, the government has used this ban as the basis for a creeping administrative takeover of pharmaceutical and medical device public relations practices. Don't believe us? Just take a look at the Office of Inspector General's list of "corporate integrity agreements."

Then, in the wake of the First Amendment win in Amarin Pharma, Inc. v. FDA, 119 F. Supp. 3d 196 (S.D.N.Y. 2015), we noted an interesting provision in the settlement that ended that litigation:

. . .[N]othing in this Order shall be construed to limit Amarin's to free speech concerning Vasepa.

That got us thinking, and we commented about OIG's corporate integrity agreements ("CIAs") in the wake of a hypothetical First Amendment invalidation of the FDA's ban on truthful promotion of off-label uses:

Well, come the millennium, those CIAs – most of them, anyway – will still be there. What then? Will the government take the position, again backed by threats of debarment, that regardless of the First Amendment, companies have limited their rights voluntarily by what they agreed to in particular CIAs?

We thus recommended addition of First Amendment non-waiver provisions in all future deals with the government that touched upon off-label promotion. After all, the government has hardly been consistent in its positions regarding the First Amendment and truthful off-label promotion.

We hope all of you out there were listening, because the federal Office of Inspector General ("OIG") recently made just such a waiver argument in an action, Patient Services, Inc. v. United States, No. 3:18-cv-00016-MHL, pending in the Eastern District of Virginia. Patient Services does not involve a CIA or off-label promotion, but the arguments are the same. According to the complaint in Patient Services:

  1. PSI is a non-profit charitable foundation that operates Patient Assistance Programs ("PAPs"), which provide financial and other assistance to indigent patients who have chronic and often life threatening diseases that require expensive treatment and management. . . . Since 2002, OIG has provided public guidance directing how PAPs should be structured and operate in accordance with its view of the Anti-Kickback statute.
  2. Specifically, since 2002, and like all other PAPs, PSI has operated pursuant to an Advisory Opinion from OIG that provides specific guidance as to how PSI should operate and structure its programs to avoid a risk of an enforcement action. . . . The 2017 Modified Advisory Opinion, however, imposes new and oppressive restrictions that cripple PSI's ability to carry out its charitable efforts. In particular, the 2017 Modified Advisory Opinion imposes new restrictions that prevent PSI from communicating with donors, potential donors or their purported "affiliates" about new or modified programs to treat chronic diseases affecting indigent populations.

Cutting out the legal jargon, the government is threatening PAP charities with prosecution to keep them from discussing the medical conditions they seek to combat with "donors" – who may also be manufacturers of products used to treat those conditions. To operate, Patient Services must have an OIG advisory opinion, which it did through 2014. Then, according to the complaint, OIG changed the rules. "OIG specifically required [plaintiff] to make a series of certifications to retain an advisory opinion." Complaint ¶81. In order to keep operating, the plaintiff accepted the certifications (nearly "two dozen" of them), and in the litigation, challenged them on First Amendment grounds. Id. ¶¶82-84.

If, instead of charities and mandatory OIG "certifications," we were to substitute FDA regulated manufacturers and CIAs involving off-label promotion restrictions, it would be the same situation we warned about previously. That's why the Patient Services interests us.

In a recent brief in Patient Services, OIG now argues that, regardless of what the First Amendment may or may not protect, the plaintiff waived its First Amendment rights when it agreed – under threat of prosecution − to the certifications. Deleting as many case-specific facts as possible, OIG's argument goes:

[T]his case . . . involves a negotiated waiver of First Amendment rights. . . . In Lake James [Community Volunteer Fire Dept., Inc. v. Burke County, N.C., 149 F.3d 277, 280 (4th Cir. 1998)], . . . a fire department's "agreement to consent to citizens' petitions and not to challenge them in court [wa]s [an] enforceable" waiver of its First Amendment rights. Id. Notably, the court applied this standard notwithstanding the fire department's argument that it had been put to the choice between agreeing to a contract that included what it perceived to be unconstitutional provisions and going without the contract and the benefits it provided. . . . Because the case ultimately involved a negotiated waiver of constitutional rights, the court applied the test, described below, to determine the enforceability of that waiver.

Just so here. [Plaintiff] agreed to the three provisions about which it now complains, i.e., to the extent these provisions affect [its] rights, it is because [plaintiff] waived those rights. . . . Indeed, the negotiations were conducted by the Agency and counsel for [plaintiffs]. . . .

Under Lake James, a negotiated waiver of First Amendment rights is valid if it (1) is a "knowing waiver," that is (2) "voluntarily given," (3) and which does "not undermine the relevant public interest." 149 F.3d at 280. . . . Judicially noticeable facts and facts included in the administrative record – namely, the size and sophistication of [plaintiff] . . ., the fact that it was assisted by counsel, and the fact that negotiations stretched on for years – indicate that any waiver of First Amendment rights was both knowing and voluntary.

OIG brief at 9-11 (factual citations omitted) (emphasis added).

So there you have it. Even if we win, and truthful off-label promotion is declared constitutionally protected from government interference, OIG is prepared to argue that existing CIAs – even though negotiated under threat of federal debarment – remain enforceable. Almost all manufacturers with CIAs far exceed the charitable plaintiff in Patient Services in terms of "size and sophistication," and all were "assisted by counsel" in the "negotiations" that produced CIAs in which they agreed to refrain from all off-label promotion, including truthful promotion. So, even though those CIAs were about as voluntary as breathing, expect the OIG to argue otherwise, because it is arguing just that, right now.

Amarin was smart when it insisted on a First Amendment non-waiver provision when it settled with the government. Of course, it also had a more favorable negotiating position, having won a First Amendment decision that the government was loathe to appeal. Anyone subject to a CIA who doesn't have such a provision, however, must be prepared to fight a second front, against OIG, even after Sorrell v. IMS Health Inc., 564 U.S. 552 (2011), is applied to truthful off-label promotion on a nationwide basis.

Be prepared – and watch what happens with constitutional waiver in the Patient Services case.

This article is presented for informational purposes only and is not intended to constitute legal advice.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
James Beck
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions