The Park Doctrine and the Perils of “Off-Label” PromotionSeptember 30, 2015
The regulatory landscape on which pharmaceutical and medical device companies tread daily is littered with compliance landmines, none more dangerous than US Food and Drug Administration’s (FDA) enforcement of the misbranding provisions of the Food, Drug & Cosmetic Act (FDCA). It is not so much the fact of FDA’s enforcement – after all, one can hardly expect the FDA not to enforce food and drug laws – as much as it is the kind of conduct implicated in FDA’s enforcement choices that companies operating in this arena must understand clearly in order to mitigate compliance risk. And when it comes to marketing activities, as discussed in more detail below, the best way to avoid regulatory enforcement actions is to avoid creating facts that make the bringing of such actions justified and attractive in the eyes of the government.
Misbranding is prohibited under the FDCA at 21 U.S.C. § 331(a). That statute prohibits “[t]he introduction or delivery for introduction into interstate commerce of any … drug, device . . . that is adulterated or misbranded.” In the pharmaceutical and medical device industries, misbranding commonly refers to drugs and devices in which the labeling is false or misleading or inadequate for use, or that contain inadequate warnings against use where such use may be dangerous to health, or otherwise does not comport with FDA requirements. Labeling includes all “labels and other written, printed, or graphic matter” appearing “upon any article or any of its containers or wrappers” or that is “accompanying such article.”
Government investigations and prosecutions of “off-label” marketing of drugs and devices are conducted under the misbranding provisions described above. Marketing is deemed “off-label” if the intended use of the marketed drug or device has not been approved by FDA. The theory is that such conduct renders the approved labeling – which only reflects those medical indications which have been approved by FDA – false, inadequate or unsafe for the intended use of the drug or device. The FDCA imposes criminal liability for misbranding at 21 U.S.C. § 333(a). Under § 333(a)(1), misbranding is a misdemeanor. If the conduct is undertaken following a prior misdemeanor conviction or with “intent to defraud or mislead,” the offense is elevated to a felony pursuant to § 333(a)(2). Individuals and companies have been criminally prosecuted under these provisions for “off-label” marketing activities, at both misdemeanor and felony levels.
The Park Doctrine
The misdemeanor version of misbranding, under § 333(a)(1), is a “strict liability” offense. Pursuant to the Park doctrine, one can violate the misbranding statute without intending to do so, or even knowing that a violation has occurred. In United States v. Park, the US Supreme Court addressed a situation in which the president of a large national food chain was criminally charged under the FDCA because food held for sale in one of the company’s warehouses had been exposed to rodent contamination, rendering the product adulterated under the statute. The High Court upheld the president’s misdemeanor conviction under the FDCA, even in the absence of evidence that he had personally participated in the events underlying the charges or had been consciously aware of any wrongdoing, writing:
[T]he [FDCA] imposes not only a positive duty to seek out and remedy violations when they occur but also, and primarily, a duty to implement measures that will insure that violations will not occur. The requirements of foresight and vigilance imposed on responsible corporate agents are beyond question demanding, and perhaps onerous, but they are not more stringent than the public has a right to expect of those who voluntarily assume positions of authority in business enterprises whose services and products affect the health and well-being of the public that supports them.
The [FDCA] does not … make criminal liability turn on ‘awareness of some wrongdoing’ or ‘conscious fraud’ …. [T]he Government establishes a prima facie case when it introduces evidence sufficient to warrant a finding by the trier of the facts that the defendant had, by reason of his position in the corporation, responsibility and authority either to prevent in the first instance or promptly to correct, the violation complained of, and that he failed to do so. The failure thus to fulfill the duty imposed by the interaction of the corporate agent’s authority and the statute furnishes a sufficient causal link. The considerations which prompted the imposition of this duty, and the scope of the duty, provide the measure of culpability.
The Park doctrine, also known as the “responsible corporate officer” doctrine, has been used by FDA to prosecute pharmaceutical and medical device companies, and individual executives, for illegal marketing activities.
FDA Guidelines for Park Prosecutions
The FDA has rules for when Park prosecutions will be recommended, and it behooves any company or corporate official wishing to mitigate compliance risk in this area to know what those rules are. The FDA Regulatory Procedures Manual acknowledges that misdemeanor prosecutions of responsible corporate officials “can be a valuable enforcement tool” and “can have a strong deterrent effect.” The Manual goes on to state, however, that before recommending such a prosecution, a number of factors must be considered by the FDA, including the following:
- The individual’s position in the company and relationship to the violation;
- Whether the individual had the authority to correct or prevent the violation;
- Whether the individual had knowledge of or participated in the violation;
- Whether the violation involves actual or potential harm to the public;
- Whether the violation is obvious;
- Whether the violation reflects a pattern of illegal behavior and/or failure to heed prior warnings;
- Whether the violation is widespread;
- Whether the violation is serious;
- The quality of the legal and factual support for the proposed prosecution;
- Whether the proposed prosecution is a prudent use of agency resources.
Of course, there is very little anyone can do about factors which are dictated entirely by the circumstances of the violation, such as the targeted individual’s position with the company, or that individual’s knowledge of, participation in and relationship to the violation. However, the risk that the violation is deemed “obvious” or “widespread,” or “involves actual or potential harm to the public,” or “reflects a pattern of illegal behavior and/or failure to heed prior warnings,” or that prosecuting the violation is deemed “a prudent use of agency resources” can be influenced by a company’s commitment to compliance efforts and whether its compliance program is sufficiently robust. For example, in the context of drug and device marketing activities, a company can mitigate the risk that “off-label” marketing activities, if they do occur, will prompt a government prosecution of the company or its senior executives. This can be done by ensuring that the company devotes substantial resources to compliance efforts aimed at preventing such activities before they occur and that the company acts swiftly to discipline any employees found to have engaged in such prohibited conduct. Indeed, an effective compliance program is the best protection against the risk that misbranding activities might occur undetected at a frequency and at a level within the company that would render such violations, in the eyes of the FDA, as “obvious” or “widespread” or “involving actual or potential harm to the public.” An effective compliance program also makes it far less likely that any misbranding violations that do surface and come to the attention of regulators will reflect a “pattern of illegal behavior” or a “failure to heed prior warnings” such that prosecution would be a “prudent” use of resources.
The Caronia Decision
The ninth factor referenced above – “the quality of the legal and factual support for the proposed prosecution” – is affected by the nature of the “off-label” marketing conduct at issue and whether prosecuting the conduct makes sense in the exercise of prosecutorial discretion. That determination, in turn, could be affected by an appeals court decision that came down a little over two years ago, United States v. Caronia. The Caronia case was closely followed by the pharmaceutical industry and free speech advocates for its potential impact on the promotional activities of drug manufacturers. Alfred Caronia was a sales representative for a pharmaceutical company selling a specialty drug called Xyrem that was approved by the FDA for narcolepsy patients suffering from excessive daytime sleepiness and a muscular condition known as cataplexy. In September 2008, Caronia was tried and convicted of misdemeanor conspiracy to introduce a misbranded drug into interstate commerce based on his activities in promoting Xyrem for unapproved indications. A two-judge majoritythen vacated Caronia’s conviction under the First Amendment, holding that Caronia had been wrongfully prosecuted for protected truthful “speech in aid of pharmaceutical marketing.” 
The significance of the ruling was hotly debated, with commentators on all sides speculating about what the decision might portend about the future of misbranding prosecutions under the FDCA and the continued viability of the FDA’s regulatory scheme prohibiting off-label promotion by pharmaceutical companies. When one looks more closely at the majority opinion, however, it becomes apparent that the ruling in Caronia did not really change much, if anything, in the current FDA regulatory landscape, at least in terms of the government’s ability to prosecute misbranding offenses arising from “off-label” marketing activities. Caronia, however, will likely impact how the government chooses to prosecute such cases in the future and could, in certain instances, influence the exercise of prosecutorial discretion in ways that cause the government not to seek criminal charges.
The majority in Caronia held that the misbranding provisions of the FDCA do not prohibit or criminalize “the truthful off-label promotion of FDA-approved prescription drugs,” and that the government “cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of an FDA-approved drug.” The majority acknowledged, however, that the FDA retains the authority to regulate the marketing of prescription drugs. The majority further sought to distinguish truthful “off-label” promotional speech from the type of behavior prohibited under the misbranding statute, which it described as relating to “whether a drug’s labeling is adequate for its intended use.” The majority readily conceded that misleading promotional speech is not protected under the First Amendment and, further, that the government is, indeed, entitled to prove the “intended use” of a drug by reference to promotional statements made by drug manufacturers and their representatives. The majority rested its ruling, however, on its insistence that “Caronia was not prosecuted on this basis” and that “the government’s theory of prosecution identified Caronia’s speech alone as the proscribed conduct.”
Boiled down to its essentials, therefore, the Caronia decision arguably had more to do with the majority’s case-specific reaction to the manner in which the defendant was prosecuted than it does with the continued viability of the regulatory scheme under which “off-label” marketing activities are prosecuted. All that being said, it should be expected that, going forward, prosecutors will be more careful in how they marshal the evidence and structure their closing arguments in misdemeanor misbranding cases. To avoid a similar result, the government will likely make special efforts to connect the evidentiary dots demonstrating the relationship between “off-label” promotional speech and a manufacturer’s intended use for a drug or device, and to explain how that intended use is not encompassed by the product’s FDA approved labeling which, in turn, renders the product misbranded under the FDCA. Further, there could be instances in which prosecutors decide, based on the misbranding evidence presented to them, that a case might be too heavily dependent on a sales representative’s truthful “off-label” promotional speech as evidence of intended use (i.e., without other corroborating evidence in the form of company emails, advertising materials and/or other documents), and hence too risky to prosecute.
The safer cases for Park misbranding prosecutions will be those in which a manufacturer’s intended use for a drug or device is evidenced not just by truthful “off-label” promotional speech, but also by other proof evincing a corporate mindset to market the product for uses not included in its approved labeling. Notwithstanding that speech may be used as evidence of intent, prosecutions based entirely on truthful but “off-label” promotional statements that are not part of a larger collection of evidence demonstrating the manufacturer’s intention to market the drug or device for unapproved indications will likely be disfavored as being too close to the borderline separating unlawful product promotion from lawful speech protected under the First Amendment. Put another way, “the quality of the legal and factual support for the proposed prosecution” may be seen as insufficient to justify moving forward with the case. Drug and medical device companies would do well to keep this in mind when deciding on the best ways to communicate and discuss, both internally and externally, “off-label” indications associated with their products.
The ancient Greek physician Hippocrates once famously described a physician’s obligation to “do no harm.” The same may be said of a pharmaceutical or medical device company when it comes to avoiding becoming a target of a misbranding prosecution. First, “do no harm.” In other words, such companies should conduct their operations in a manner that will not make them, in the eyes of the government, attractive or high-priority prosecution targets. That, in turn, means implementing an truly effective compliance program that can uncover any violations at an early stage and prevent them from becoming obvious or widespread or from causing harm to the public or reflecting a pattern of illegal conduct. It also means giving serious thought to the ways in which, and with whom, “off-label” indications are communicated inside and outside the company.
Such companies have every right, and every reason, to discuss the subject of “off-label” uses in support of their business operations, provided that behavior does not extend to the affirmative marketing of such unapproved uses to expand the market for their products. That being said, it must be recognized that a failure to appropriately control and compartmentalize such communications may inadvertently create material that can be seized upon by federal regulators as “evidence” of unlawful product promotion under the FDCA.
 21 U.S.C. § 352(f).
 21 U.S.C. § 321(m).
 421 U.S. 658 (1975).
 421 U.S. 672-674 (citations omitted).
 See, e.g., DOJ Press Release, dated 12/19/2012, announcing misdemeanor misbranding guilty plea of Amgen, Inc. related to the “off-label” marketing of Aranesp; DOJ Press Release, dated 9/2/2009, announcing felony misbranding guilty plea of Pharmacia & Upjohn Company, Inc., related to the “off-label” marketing of Bextra; DOJ Press Release, dated May 10, 2007, announcing the felony misbranding guilty plea of Purdue Frederick Company and the misdemeanor misbranding guilty pleas of its CEO, General Counsel and Chief Medical Officer, related to the “off-label” marketing of OxyContin; DOJ Press Release, dated April 15, 2009, announcing the felony misbranding guilty plea of medical device company Nichols Institute Diagnostics for the marketing of misbranding immunoassays.
 FDA Regulatory Procedures Manual § 6-5-3.
 703 F. 3d 149 (2d Cir. 2012).
- Geoffrey R. Kaiser