On December 14, 2023, the U.S. Court of Appeals for the First Circuit issued a long-awaited opinion affirming the convictions of William Facteau and Patrick Fabian, former executives of Acclarent, on misdemeanor adulteration and misbranding charges under the Federal Food, Drug, and Cosmetic Act ("FDCA") related to their involvement in the off-label promotion of a medical device. On appeal, the defendants had argued, among other things, that their convictions violated their First and Fifth Amendment rights under the Constitution. The First Circuit's opinion rejecting these arguments is the most significant court ruling related to off-label speech in nearly a decade.
This Alert summarizes the key aspects of the First Circuit's decision and discusses the implications for government enforcement against medical products manufacturers moving forward.
The Long Road to the First Circuit
The formal criminal prosecution of Facteau and Fabian began with an initial indictment more than eight years ago, in April 2015, and there have been long delays at both the trial and appellate court levels in issuing opinions on the merits of the complex arguments raised by the defendants. As discussed in a prior Ropes & Gray Alert, the defendants were convicted in July 2016 of misdemeanor adulteration and misbranding charges in connection with the marketing and distribution of Acclarent's Stratus Microflow Spacer device ("Stratus") for an uncleared intended use. The evidence introduced at trial showed that the device was designed to deliver steroids (the uncleared use) rather than to serve as a sinus spacer that eluted saline (the cleared use) and that Acclarent essentially marketed the device only for the uncleared use. Four years later, in September 2020, the district court denied the defendants' motion for acquittal or, alternatively, for a new trial, allowing the jury's convictions to stand. Neither executive was sentenced to jail time, but the district court sentenced Facteau to pay a $1 million fine and Fabian to pay a $500,000 fine. The defendants then appealed to the First Circuit where briefing concluded in 2021 and oral argument was held in March 2022.
The First Circuit's Decision
Whereas the district court had struggled with the complicated FDCA-based charging theories that the government used to prosecute the defendants and had even suggested that Congress may not have intended to criminalize the conduct at issue, the First Circuit did not express the same fundamental concerns regarding the operative statutory and regulatory scheme. The First Circuit distilled the relevant statutory and regulatory provisions related to off-label marketing at the outset of its opinion by asserting that "[a] device is adulterated or misbranded if its 'intended use' – as determined objectively by the seller's statements and conduct – differs from the use(s) for which the FDA has cleared it." As explained further below, the First Circuit rejected all of the defendants' arguments on appeal, including their arguments under the First and Fifth Amendments, and affirmed the defendants' convictions for causing the introduction of the Stratus—an adulterated and misbranded device due to the lack of premarket approval or clearance for use in delivering steroids—into interstate commerce.
First Amendment Issues
The defendants challenged the jury instructions on First Amendment grounds. The defendants contended they should have been granted an instruction that would have prevented the jury from considering truthful, non-misleading promotional speech as evidence of intended use. The defendants argued that (1) using promotional speech as evidence of intended use criminalizes that speech and (2) allowing speech outside of FDA's established safe harbors for the communication of off-label information to serve as evidence of intended use imposes an impermissible content-based burden on disfavored speech.
Speech as Evidence of Intended Use. The First Circuit rejected the argument that the jury should have been instructed that truthful, non-misleading promotional speech cannot be considered as evidence to determine the intended use of the Stratus. Relying heavily on the Supreme Court's 1993 decision in Wisconsin v. Mitchell,1 an aggravated battery case where the defendant's speech was used to establish a racial motive that made the defendant eligible for a sentence enhancement, the First Circuit concluded that the use of speech as evidence of intended use does not violate the First Amendment. The court further asserted that the circuit courts that have considered this issue "have uniformly concluded that using speech merely as evidence of a misbranding offense under the FDCA does not raise First Amendment concerns."2
Applicability of Caronia. The First Circuit also rejected the argument that it should follow United States v. Caronia,3 distinguishing the Second Circuit's seminal decision in several key respects:
- According to the First Circuit, the Caronia majority "did not question the general principle that speech can constitute evidence of intended use" but rather "was not persuaded that the government's use of speech was limited to evidentiary purposes in that case." The First Circuit found that the case against Facteau and Fabian "relied on a wide array of evidence," including not only promotional speech but also internal strategy communications and the physical design of the product. The First Circuit concluded: "It is not the case, as it was in Caronia, that the government set out to punish appellants for what they said about the product; rather, what appellants said about Stratus simply shed light on how they intended it to be used."
- The misbranding conviction in Caronia, a drug case, was premised on a lack of adequate directions for use, a charge for which Facteau and Fabian were acquitted. The convictions of Facteau and Fabian were premised on the lack of FDA premarket clearance. The First Circuit asserted that a misbranding theory tied to a lack of regulatory clearance is "less intertwined" with speech.
- Unlike the sales rep defendant in Caronia "whose sole job function was to make promotional statements about the product," Facteau and Fabian were high-level Acclarent executives responsible for internal decisions on product design, regulatory strategy, and sales strategy.
Safe Harbor Policies. The defendants also argued that FDA's "safe harbor" policies embodied in guidance documents draw impermissible content-based distinctions between speech affirmatively promoting an off-label use of a product on the one hand (which counts as evidence of intended use) and responses to unsolicited requests for off-label information and distribution of off-label reprints on the other hand (which FDA says will not count as evidence of intended use if the FDA-defined criteria are met). The First Circuit found that these FDA safe harbor policies do not burden protected speech within the meaning of the First Amendment. The court reasoned that the safe harbor policies "expand" rather than "contract" the domain of speech that the government shields from consideration as evidence of intended use.
Evidence Relevant to Determining Intended Use
The defendants had argued for a jury instruction explaining that the intended use of a device must be determined based only on external promotional communications. The First Circuit rejected this argument, finding that (1) the instruction as given was consistent with the plain language of the intended use regulation, 21 C.F.R. § 801.4, then in effect and (2) no cases relied upon by the defendants foreclose reliance on evidence other than public-facing promotional statements to establish intended use. In interpreting § 801.4, the court specifically rejected the premise that "objective intent" only includes external communications and cannot be shown through internal company statements and conduct.
Fifth Amendment Due Process Clause Issues
Defendants also argued that the concept of intended use is unconstitutionally vague in violation of the Due Process Clause of the Fifth Amendment and that the government had specifically applied a new and expansive interpretation of intended use for which the defendants had no fair warning.
The First Circuit rejected the defendants' vagueness argument, finding that the FDCA and FDA regulations are sufficiently clear. The First Circuit asserted that concept of "objective intent" in the intended use regulation "is a familiar and well-established concept in the law." The court acknowledged that the intended use regulation "casts a wide net" and conceded that "there may be some uncertainty under § 801.4 about when, in a close case, there will be sufficient evidence to prove that a manufacturer marketed a device for an off-label intended use." However, the First Circuit emphasized that "this was not a close case," in terms of the evidence offered to establish the defendants' objective intent.
The First Circuit also dismissed defendants' argument that the government and the courts had shifted in their interpretation of intended use, and that there was disagreement among the applicable authorities. The court found this unpersuasive based on its analysis of the caselaw and the FDA statements cited by the defendants. Similarly, the court rejected the defendants' "fair warning" argument because the court's analysis of the caselaw and prior FDA statements did not support the promotional claims-based interpretation of intended use proffered by the defendants. Hence, in the First Circuit's view, there was no "interpretive pivot" by the government regarding intended use in recent years that left defendants without fair warning regarding how intended use would be determined.
Ropes & Gray had submitted an amicus brief on behalf of members of the Medical Information Working Group in support of the defendants' due process arguments. This brief emphasized (i) the government's failure to adopt a clear and consistent approach regarding the role that a manufacturer's knowledge of off-label use can play in the intended use inquiry and (ii) the inadequacy of the FDA's existing safe harbor policies, which are non-binding and often in draft form, to provide sufficient clarity or certainty of the line between permissible and impermissible speech. The First Circuit's opinion does not squarely address these issues.
Key Takeaways for the Drug and Device Industry
Although the evidence at issue in this case involved more than just promotional speech regarding off-label uses of a medical product, the First Circuit's decision endorses key legal arguments that the FDA and the Department of Justice have previously made in connection with the government's ability to regulate the speech of medical product manufacturers. For example, the First Circuit backed the government's longstanding view, resting on the Supreme Court's Wisconsin v. Mitchell decision, that it can use truthful, non-misleading speech as evidence of an off-label intended use.4 Additionally, the First Circuit's interpretation of the intended use regulation and the relevant caselaw represents a full-throated affirmation of the FDA's view that intended use can be determined from "any relevant source" of evidence. (See our prior Ropes & Gray Alert discussing FDA's 2021 amendments to its intended use regulations, which the agency issued subsequent to the conduct at issue in this case.)
Going forward, government enforcement attorneys or qui tam whistleblowers may seek to apply the principles of the First Circuit's opinion in cases involving off-label promotion where the evidence is less extensive or clear-cut than was established at trial against Facteau and Fabian. Nonetheless, in such a future case, courts will have to grapple with how to distinguish between speech that is introduced as evidence of the intended use of the product (which the First Circuit found permissible) versus speech relied on as the criminal act itself. The line between the two categories remains far from clear. But the difference between a successful and failed prosecution may rest on the government's ability to convince a court that speech is being introduced at trial to help prove only one element of a multi-element crime. Further, the government's job will certainly be easier when it can also point to conduct, alongside speech, as evidence of intended use.
Litigation strategy and evidence aside, the ultimate impact of the First Circuit's decision on the manufacturer communications landscape remains to be seen. The defendants are likely to seek further review from the Supreme Court, and it is unclear whether the Court would agree with the First Circuit's analysis. The Supreme Court has recently been receptive to First Amendment arguments, and less deferential to agency regulation, especially when those regulations are not clearly rooted in the statutory text.
Footnotes
1. 508 U.S. 476 (1993).
2. See Whitaker v. Thompson, 353 F.3d 947 (D.C. Cir. 2004); Nicopure Labs, LLC v. FDA, 944 F.3d 267 (D.C. Cir. 2019); United States v. Lebeau, 654 F. App'x 826 (7th Cir. 2016).
3. 703 F.3d 149 (2d Cir. 2012).
4. See, e.g., FDA Memorandum: Public Health Interests and First Amendment Considerations Related to Manufacturer Communications Regarding Unapproved Uses of Approved or Cleared Medical Products (January 2017), available at https://www.regulations.gov/document/FDA-2016-N-1149-0040 .
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