On December, 3, in a 2 to 1 decision, the US Court of Appeals for the Second Circuit (New York) overturned the conviction of Alfred Caronia, a pharmaceutical company sales representative who was convicted by a jury (in 2008) for conspiring “to introduce a misbranded drug into interstate commerce,” in violation of the federal Food, Drug and Cosmetic Act.
Caronia promoted the expansive use of the drug, Xyrem, for a wide range of unapproved, off label uses. Such illegal promotion of prescription drugs by drug manufacturers has led to numerous government prosecutions resulting in increasingly costly, multi-billion dollar settlements.
See, Pharma’s Rap Sheet: www.ahrp.org/cms/content/view/863/109/
Xyrem (y-Hydroxybutyric acid (GHB) is a powerful, fast-acting central nervous system depressant that has been used as a general anesthetic. Because it is subject to abuse as a “Date Rape Drug” surreptitiously used to facilitate sexual assault, it is highly controversial. In many countries GHB is an illegal drug. In the US it is classified as a Schedule III controlled substance.
The FDA approved Zyrem in 2002 for restricted use for patients with nacrolepsy–because of the severe side-effects and it abuse potential, the FDA required a "Black Box" label warning, and limited Zyrem’s nationwide distribution to a single pharmacy.
Two of the three federal judges who heard the case–Denny Chin (appointed by President Obama, 2010) and Reena Raggi (appointed by President Bush, 2002) ruled that Carona’s commercial sales pitch–which violated the FDCA–was protected under the First Amendment as freedom of speech.
The ruling disregards entirely the serious public safety consequences of allowing unsubstantiated claims in commercial promotion aimed at expanding the use and availability of an exceedingly dangerous drug–with a history of abuse–for commercial profit.
Xyrem Black Box ! WARNING: 
Central nervous system depressant with abuse potential. Sodium oxybate is GHB, a known drug of abuse. Abuse has been associated with some important central nervous system (CNS) adverse events (including death).
Even at recommended doses, use has been associated with confusion, depression and other neuropsychiatric events.
Reports of respiratory depression occurred in clinical trials. Important CNS adverse events associated with abuse of GHB include:
seizure, respiratory depression and profound decreases in level of consciousness, with instances of coma and death.
Additional Warning :
"It is a sedative-hypnotic that produces dose and concentration dependent central nervous system effects in humans. The rapid onset of sedation, coupled with the amnestic features of sodium oxybate, particularly when combined with alcohol, has proven to be dangerous for the voluntary and involuntary (assault victim) user." http://www.fda.gov/ohrms/dockets/dockets/05n0479/05N-0479-EC9-Attach-2.pdf
The FDA approved label for patients warns:
“Xyrem can cause serious side effects, including: • breathing problems.These can include decreased breathing, trouble breathing and sleep apnea; • mental health problems: • confusion • psychosis • abnormal thinking • agitation • depression • thoughts of killing yourself or try to kill yourself • bedwetting. • sleepwalking. See: http://www.fda.gov/downloads/drugs/drugsafety/ucm089830.pdf
At trial, the government produced taped evidence that Mr. Caronia had told doctors that Xyrem could also be used to treat insomnia, Fibromyalgia and restless-leg syndrome, and c ontrary to the label warning that Xyrem has not been tested for use in children under 16, he promoted its use for children "as young as fourteen" claiming "it’s a very safe drug."
Although the decision indicates that: 
“Of course, off-label promotion that false or misleading is not entitled to First Amendment protection. Under 21 U.S.C. § 331(a), a defendant may be prosecuted for untruthfully promoting the off-label use of an FDA-approved drug,e.g., making false or misleading statements about a drug.”
Judges Chin and Raggi argue in the opinion, that because “the government did not argue at trial, nor does it argue on appeal, that the promotion in question was false or misleading” Coronia’s patently false promotional statements did not constitute “false or misleading.”
In October, 2010, the FDA rejected Jazz Pharmaceutical’s application for approval of Zyrem for Fibromyalgia after an advisory panel overwhelmingly rejected it:
“Approving it for such a large patient population — 5 million people are estimated to suffer from fibromyalgia — would risk flooding the streets with a pharmaceutical-grade version of the highly controlled substance."
In this case, those at highest risk of harm from expanded prescriptions of Zyrem are young women and adolescent girls who are the primary targets of sexual assaults.
If this decision stands, pharmaceutical companies will not only be relieved from expensive lawsuits, but they will be relieved from compliance with the safeguards imposed by the Food Drug & Cosmetics Act (FDCA). They will be free to promote their drugs for ANY untested use they deem profitable—even if it kills.
The Alliance for Human Research Protection believes this decision is irresponsible: it undercuts the very system and safeguards of drug regulation as set forth under the Food, Drug and Cosmetics Act (FDCA). As R. Alta Charo, professor of law and bioethics noted in the Los Angeles Times (below):
"What we’re losing with this court decision is the safeguard of an independent arbiter."
It demonstrates that even members of the judiciary have been blind sighted by corporate commercial values.
By applying constitutional protections for individual free speech to commercial promotion of products—even products that pose serious safety hazardous—the judges uphold the supremacy of commerce above public safety.
Judge Denny Chin who wrote the decision, argues that the FDA discriminates unfairly by criminalizing manufacturers’ sales reps for promoting products for off label uses whereas doctors are free to do so:
“because off-label prescriptions and drug use are legal, the government’s application of the FDCA permits physicians and academics, for example, to speak about off-label use without consequence, while the same speech is prohibited when delivered by pharmaceutical manufacturers. This construction "thus has the effect of preventing [pharmaceutical manufacturers] — and only [pharmaceutical manufacturers] — from communicating with physicians in an effective and informative manner."
That point, I would argue, is worth examining: the FDCA was enacted when doctors were regarded as "learned intermediaries" whose judgment was informed by professional expertise free of any financial interest in promoting a drug. But that assumption is no longer valid—as documented evidence from numerous medical product liability cases has demonstrated, doctors who receive payment from manufacturers to tout their drugs, have been using their medical license to expand the use of those drugs for profits.
Indeed, as demonstrated in this case by a transcript of a recorded conversation, Dr. Peter Gleason, a physician hired by the drug’s manufacturer to promote Xyrem in a speaker program, promoted many unapproved uses for Xyrem, including the treatment of obesity and chronic fatigue. Dr. Gleason claimed that “for the problems with insomnia there’s no better drug, no safer drug, it’s as safe as Ambien and Sonata…” (Dr. Gleason pled guilty to a misdemeanor.)
Perhaps it is time to reexamine the special privileges granted to physicians–if they engage in promoting medical products for payment. In such commercial undertakings doctors should be held accountable if they promote drugs that cause serious harm.
If the decision by the two judges is upheld by the full Second Circuit, it has the potential of bringing about an end to FDA licensure authority for prescription drugs—“the entire FDCA may well be unconstitutional.”
In her thoughtful dissenting opinion, Judge Debra Ann Livingston wrote: 
"If drug manufacturers were allowed to promote FDA-approved drugs for non-approved uses, they would have little incentive to seek FDA approval for those uses. Prohibiting such promotion is thus “one of the few mechanisms available” to encourage participation in the approval process. And premarket approval improves drug safety and effectiveness only to the extent that drugs are not sold without such approval.”
“The law generally permits a hardware store to sell turpentine, and though such conduct may not be advisable, the law generally permits a consumer to purchase that turpentine and use it as a pain reliever. Under the majority’s reasoning, then, any substance that may be legally sold for some purpose may be promoted by its manufacturer for any purpose—so long as the manufacturer’s statements are merely unsubstantiated, rather than demonstrably false or misleading. But this reasoning would invalidate the very definitions of "drug" and "device" that undergird the entire FDCA.”
“But if drug manufacturers have a First Amendment right to distribute drugs for any use to physicians or even directly to patients, then the entire FDCA may well be unconstitutional.”
The decision and the powerful dissenting opinion by Judge Debra Ann Livingston are posted at: http://freepdfhosting.com/38c9187d7c.pdf also at: altmentalities.files.wordpress.com/2012/12/united-states-v-caronia.pdf
If the decision is upheld, public safety as well as the public purse will suffer immensely from overuse of drugs for untested, indiscriminate ueses–thereby providing a business bonanza to drug makers. Healthcare costs, especially publicly financed programs–Medicaid, Medicare, and Veterans Health Care–will likely skyrocket.
Reactions to this decision from physicians have been intense, whereas lawyers who defend pharmaceutical companies are elated.
Richard Deyo, MD, a professor of family medicine at Oregon Health and Science University, says, “This risks taking us back to an era when people could promote snake oil without restrictions — a situation I would hate to see.”
Andrew Kolodny, MD, a New York psychiatrist, says that “a large portion of Americans already are taking drugs with serious risks that outweigh the benefits. This is going to get much worse. It’s a safe bet that health outcomes will decline from medication side effects, while spending on prescription drugs will continue to rise.”
Steven Nissen, MD, a cardiologist with the Cleveland Clinic, said the decision was short-sighted and could result in patients being exposed to unnecessary risks. "Off-label promotion is not about free speech, it is the medical equivalent of yelling fire in a crowded auditorium."
"This is a complete disgrace," said Steven Miles, a professor of medicine and bioethics at the University of Minnesota. "What this basically does is destroy drug regulation in the United States."
Felicia Cohn, director of medical bioethics for Kaiser Permanente Orange County: "This completely undermines the FDA’s authority over how drugs are marketed," she said. "I can’t imagine that the marketing folks in the drug industry won’t seize upon this as an excuse to sell almost all drugs beyond their approved usage."
R. Alta Charo, a professor of law and bioethics at the University of Wisconsin: "What we’re losing with this court decision is the safeguard of an independent arbiter. It’s very problematic."
Alexander Capron, a professor of law and medicine at USC, called the ruling "enormously significant" and said it eliminates an important hurdle that drugs have had to clear before reaching the market. "The danger to consumers is that a drug will be marketed without having the relative balance between efficacy and safety adequately addressed."
IMichael Carvin of Jones Day, who wrote a 2nd Circuit amicus brief supporting Caronia on behalf of the Washington Legal Foundation,wrote that the impact of the 2nd Circuit’s ruling "guts the FDA’s regulatory regime" and erects "an absolute roadblock" to what Carvin called "the FDA’s grotesquely aggressive approach" to off-label marketing prosecution.
Vera Sharav
See, Milwaukee Journal Sentinel (below) Court-Off-Label Drug Marketing Is "Free Speech"
The Los Angeles Times (below) Appeals Court Puts 1st Amendment Over Public Health
Thomson Reuters Seismic fallout from ruling on drug marketing and free speech?
Milwaukee Journal Sentinel/ MedPage Today
Court: Off-Label Drug Marketing Is ‘Free Speech’
A decision by a federal appeals court this week could have a dramatic impact on the marketing of prescription drugs in America, potentially affecting patient care and everything from TV advertising to future government prosecutions which, in the past, had yielded billions of dollars in settlements, doctors and attorneys said Tuesday.
"This risks taking us back to an era when people could promote snake oil without restrictions – a situation I would hate to see," said Richard Deyo, MD, a professor of family medicine at Oregon Health and Science University.
Citizens United Redux
However, others say the ruling by a three-judge panel of the Court of Appeals for the Second Circuit in Manhattan is a victory for free speech, one that could become the drug industry equivalent of Citizens United, the 2010 U.S. Supreme Court decision that gave corporations and unions the right to spend unlimited sums on political ads.
Like the Citizens United case, the ruling Tuesday by the prestigious U.S. Court of Appeals for the Second Circuit in New York, involved the right of commercial free speech, applying it to the complicated world of pharmaceutical industry promotion of prescription drugs.
How wide-ranging the decision becomes likely will depend on whether it gets to the U.S. Supreme Court, attorneys said.
Once the Food and Drug Administration approves a drug, physicians are free to prescribe that drug as they wish — but the drug makers can only market the drug for the FDA-approved marketing indication.
The case involves Alfred Caronia, a sales representative with Orphan Medical who was criminally prosecuted for making off-label promotional statements about Xyrem, a drug approved in 2002 to treat narcolepsy patients with a condition known as cataplexy. Cataplexy involves weak or paralyzed muscles.
The FDA required a black box warning on the drug stating that its safety and effectiveness had not been established in people under the age of 16. The active ingredient in Xyrem is GHB, is a powerful medication that acts on the central nervous system and also is known as the "date rape" drug.
In 2005, the federal government began investigating Orphan Medical for its alleged off-label promotion of Xyrem.
In a taped conversation Caronia had with a doctor who was cooperating with the government, he said the drug could be used for other muscle conditions such as fibromyalgia, restless leg syndrome, and Parkinson’s.
He also said it could be used in patients under 16.
Caronia had claimed that his off-label promotion was constitutionally protected free speech, saying the First Amendment does not permit the government to prohibit or criminalize a drug company’s truthful, nonmisleading off-label promotion to doctors.
Protected Speech
The appeals court essentially agreed, noting that Caronia never conspired to put false or deficient labeling on the drug. "The government clearly prosecuted Caronia for his words – for his speech," the court said.
"This could be a watershed moment for the pharmaceutical industry," said Michael Buchanan, a former federal prosecutor who now works for a New York law firm that represents drug companies.
He said the decision will be good for consumers and doctors because it will allow drug companies to disseminate more information about their products, allowing for more informed decision-making.
It is likely the decision, if upheld, will make it much more difficult for the Department of Justice to bring cases against drug companies for off-label drug promotion, he said. Over the last decade or so, the Justice Department has obtained billions of dollars from drug companies after accusing them of promoting their products for off-label uses. In its most recent prosecution in July, the department obtained a record $3 billion settlement from GlaxoSmithKline for its marketing of several drugs, including Wellbutrin, Paxil, and Advair.
Tamara Piety, an expert on commercial speech and the First Amendment and a professor of law at the University of Tulsa, said that if the decision is upheld by the Supreme Court it could open the doors to off-label television advertising of drugs. Piety predicted that a majority of the Supreme Court Justices would be sympathetic to the ruling. She said the pharmaceutical industry has been trying for years to overturn the off-label marketing prohibition. "It looks like they finally succeeded," she said.
Steven Nissen, MD, a cardiologist with the Cleveland Clinic, said the decision was short-sighted and could result in patients being exposed to unnecessary risks. "Off-label promotion is not about free speech, it is the medical equivalent of yelling fire in a crowded auditorium." he said.
Andrew Kolodny, MD, a New York psychiatrist who has been trying to reform the use of narcotic painkillers in the U.S., said the decision was terrible for public health."A large portion of Americans already are taking drugs with serious risks that outweigh the benefits," he said. "This is going to get much worse," Kolodny said. "It’s a safe bet that health outcomes will decline from medication side effects, while spending on prescription drugs will continue to rise."
Ed Silverman, who operates the popular Pharmalot blog, said drug companies had been pushing off-label promotion as a free speech issue for years."It (the decision) is vindication for the pharmaceutical industry," he said.
PhRMA Applauds
In a statement, the Pharmaceutical and Research Manufacturers of America said it was pleased that the court found that the FDA’s ability to regulate communication about medicine is circumscribed by the First Amendment. "PhRMA believes that truthful and nonmisleading communication between biopharmaceutical companies and healthcare professionals is good for patients, because it facilitates the exchange of up-to-date and scientifically accurate information about new treatments," PhRMA spokesman Matthew Bennett said in a statement.
Sidney Wolfe, MD, with the watchdog group Public Citizen, said the decision will further weaken the FDA. Caronia was accused of conspiring with a psychiatrist who was a hired drug company speaker.
In overturning Caronia’s conviction, the appeals court cited a 2011 U.S. Supreme Court decision involving a Vermont law that said "speech in the aid of pharmaceutical marketing …" is a form of expression protected by the First Amendment. The law had barred drug companies from obtaining and using prescriber information for marketing purposes when a range of others such as private and academic researchers could acquire the information.
The Court of Appeals said the government’s view of the law essentially legalized off-label prescribing but prohibited the free flow of information about that.
Arnold Friede, a former FDA and drug company attorney, said the next step may be for the government to ask the entire appeals court to rehear the case.
~~~~~~~~~~~~~~~~
The LOS ANGELES TIMES
Appeals court puts 1st Amendment over public health
An appellate panel clears a man who pitched a drug for an unapproved use for it, saying he had a free-speech right to promote other uses. It’s a blow to the FDA.
December 07, 2012| David Lazarus
The Food, Drug and Cosmetic Act makes it illegal to sell a prescription drug for any purpose other than what’s listed on the label.
Nevertheless, a divided federal appeals court this week tossed out the conviction of a former drug sales rep who was recorded pitching a doctor on other uses of a medicine approved by regulators solely to treat the sleep disorder narcolepsy.
And here’s the kicker: The court ruled that the sales rep had a free-speech right to promote the drug’s unapproved uses.
I‘m as big a fan of the 1st Amendment as anyone, but this decision strikes me as fundamentally flawed.We’re not talking about a right to express yourself. We’re talking about selling stuff — stuff that could harm or even kill you if used improperly.
Moreover, it would seem that a serious blow has been dealt to the Food and Drug Administration’s power to ensure the safety of prescription meds. The drug industry can now pitch any use for its products, regardless of what regulators say.
"This is a complete disgrace," said Steven Miles, a professor of medicine and bioethics at the University of Minnesota. "What this basically does is destroy drug regulation in the United States."
Felicia Cohn, director of medical bioethics for Kaiser Permanente Orange County, was more circumspect. But only slightly so. "This completely undermines the FDA’s authority over how drugs are marketed," she said. "I can’t imagine that the marketing folks in the drug industry won’t seize upon this as an excuse to sell almost all drugs beyond their approved usage."
The case before the U.S. 2nd Circuit Court of Appeals in Manhattan this week began in 2005 when Alfred Caronia, a former sales rep for Orphan Medical, later acquired by Jazz Pharmaceutical, was targeted in a federal investigation into questionable drug-industry sales practices.
He was recorded telling a doctor that the narcolepsy drug Xyrem could also be used to treat insomnia, fibromyalgia and other conditions, even though the FDA hadn’t approved such uses. Caronia was convicted by a jury in 2008.
In his appeal of the verdict, Caronia argued that the 1st Amendment gave him the right to discuss so-called off-label drug uses, and the court agreed.
"The government clearly prosecuted Caronia for his words — for his speech," the majority wrote in the 2-to-1 decision. It concluded that "the government cannot prosecute pharmaceutical manufacturers and their representatives" under the Food, Drug and Cosmetic Act for speech promoting off-label drug uses.
Judge Debra Ann Livingston, the sole dissenter on the panel, countered that by overturning Caronia’s conviction, "the majority calls into question the very foundations of our century-old system of drug regulation."
The government is expected to challenge the ruling, either before the full appellate court or at the U.S. Supreme Court. The high court already has determined that unlimited political donations can be made in the name of free speech.
R. Alta Charo, a professor of law and bioethics at the University of Wisconsin, explained it to me like this:
Let’s say a drug company came up with a medicine that the FDA approved for controlling a patient’s blood pressure. But later on, the company discovered that the medicine has an interesting side effect: It grows hair.
A cure for baldness, obviously, has blockbuster potential. But under the old rules, the drug company would have had to go back to the FDA and receive approval for the blood-pressure medicine to be marketed as a hair restorer.
Now, it wouldn’t have to. It could claim a free-speech right to say whatever it wanted about the drug’s usage.
The drug Viagra was originally intended to lower blood pressure and treat angina. It was only during testing that its maker, Pfizer, noticed that Viagra had an unexpected effect on another aspect of the male anatomy.
So Pfizer asked the FDA for permission to market its heart drug as a remedy for erectile dysfunction. The federal agency, in turn, gave Pfizer’s research a good going over before giving its nod.
"What we’re losing with this court decision is the safeguard of an independent arbiter," Charo said. "It’s very problematic."
Alexander Capron, a professor of law and medicine at USC, called the ruling "enormously significant" and said it eliminates an important hurdle that drugs have had to clear before reaching the market.
"The danger to consumers is that a drug will be marketed without having the relative balance between efficacy and safety adequately addressed," he said.
Businesses and their conservative friends in Congress routinely argue that regulations get in the way of commerce and innovation and that the market should be left to work its magic.
The flip side of that pie-in-the-sky perspective is GlaxoSmithKline agreeing to pay $3 billion in July for promoting antidepressants and other drugs for unapproved uses. Or Johnson & Johnson agreeing in August to pay $181 million to settle cases over the questionable marketing of an antipsychotic drug.
FDA rules are there for a reason, and that reason is to protect public health.
Drug companies have everything to gain by being able to sidestep regulatory oversight. The rest of us gain nothing.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz.
Send tips or feedback to david.lazarus@latimes.com.
~~~~~~~~~~~~~~~~~~
An investiment newsletter, Seeking Alpha reported the following:
Jazz Pharmaceuticals Can Hit An Interesting Note In 2012
February 26, 2012, Estimates Going into Earnings
JAZZ releases earnings Monday February 27th. Analysts expect over $80 million in earnings from the most recent quarter. EPS estimates suggest anywhere from a $1.01 – $1.09 value. The stock is up over 31% year to date and was up nearly 5% Friday on high volume going into earnings. Jazz has had greater than 10% year over year revenue increase for the past 4 quarters to support its stock interest.
You Won’t Fall Asleep on Jazz’s Success…
"Xyrem, the company’s oral sodium oxybate narcolepsy drug, is its biggest revenue generator, bringing in some 80% of quarterly revenue. Jazz’s collaboration with recent earnings release success Express Scripts (ESRX) for its Xyrem Success Program ® has further solidified its place in the market, working to answer some concerns with potential abuse of the drug. The drug, with orphan status, is the only treatment for a narcolepsy with cataplexy diagnosis. The company’s quarter 3 profits doubled largely as a result of Xyrem sales rising 68% with estimated 2011 sales value reaching near $235 million. Jazz’s patent on Xyrem extends to 2024."