When Falsely Shouting "Crime" Pays

Over at the Huffington Post, they're running a gigantic 15-part 58,000 word serial by Steven Brill titled "America's Most Admired Lawbreaker."   Today they're up to Chapter 6.  The subject is the off-label marketing by Johnson & Johnson of a drug called Risperdal, to young and old people, without specific approval from the FDA to do so.  Already Nicholas Kristof of the New York Times has devoted an entire op-ed column, titled "When Crime Pays: J&J's Drug Risperdal," to the series and its supposed revelations.  

This is the most blatant possible chasing of the Pulitzer Prize, intended to impress you as being great crusading in the tradition of muckraking journalism.  The theme is that great old standby, evil corporation puts profits over people.  In Brill's telling, this story represents a particularly egregious instance of corporate misbehavior, first because J&J made a lot of money, second because J&J presented itself to the world as a particularly ethical company, but most importantly because all the while J&J's behavior, according to Brill, was systematically and intentionally "illegal" and "criminal."  The evil company cynically committed "crimes" because the pay-off was bigger than the fines they would have to pay.  Here's the very first line:

Over the course of 20 years, Johnson & Johnson created a powerful drug, promoted it illegally to children and the elderly, covered up the side effects and made billions of dollars.      

Accompanying the series is a "Letter From the Editors," signed by Greg Veis and Rachel Morris of HuffPo, telling you (as if you hadn't already figured it out) how terribly, terribly important this story is, and how it is intentionally designed to play on your emotions:

At some point over the course of this massive, magisterial 15-chapter story, you will get angry, and you will stay angry. It may happen when you learn that Johnson & Johnson handed out promotional Legos to pediatricians so that they’d be more likely to prescribe a drug called Risperdal to children with behavioral problems, although the FDA had repeatedly told the company not to market it to children. . . .

Actually, I have gotten angry after reading the first few chapters of this series, but not for any of the reasons given by Veis and Morris.  I have gotten angry because the story throws around accusations of "illegal" and "criminal" conduct without ever giving an accurate statement of what is legal and illegal in the area of off-label marketing of drugs.  I have gotten angry because Brill unthinkingly accords to the FDA the status of God and lawgiver, without any recognition that we have in this country a Constitution that gives no authority to bureaucrats to make law, and a First Amendment that restrains what government bureaucrats can order the people to do and not do.  I have gotten angry because the article is permeated by the unthinking and ignorant premise that if the self-important pooh-bahs at the FDA "tell a company not to market" a drug to some category of people, then it is then a crime for the company to market the drug to those people.  A correct statement of the law is that when the FDA purports to tell a company that it cannot market a drug to someone by making truthful statements about it, it is the FDA that is behaving lawlessly, not the company.  The FDA systematically behaves in this lawless manner, so far without consequence to itself or any individuals who work for it, and in my view that is a far, far bigger problem for this country than anything that J&J may have done in marketing Risperdal.

Not that I'm standing up for everything that J&J may have done here.  They may well have stepped over the line in some instances.  But Brill's series goes so far in making accusations of criminality for conduct that is specifically legal that I don't think any of the rest of his series can be trusted at all.

In Chapter 2 of his article, Brill lays out what he apparently thinks is the law of off-label marketing of drugs:

A key provision of the [1962 amendments to the Food and Drugs Act of 1906] made it a crime for drug companies to promote drugs to doctors for patients with illnesses for which the drug, according to its FDA-approved label, was not intended and approved for use. . . .  Thus, for Johnson & Johnson to expand the market to reach its [Risperdal] business plan targets, doctors had to be sold on the value of Risperdal in populations that were not included on the label as the drug’s intended users. Yet it was a crime for the company to sell the doctors on the benefits of using Risperdal to treat those populations.  

This is just plain, dead wrong as a statement of the law.  It's not just that people like me have been pointing out since at least 1999 that this interpretation of the FDA Act cannot be reconciled with the First Amendment.  It's that the courts have specifically and emphatically agreed with me and have shot down lawless FDA efforts to criminalize true speech -- on the few occasions when those issues have actually reached the courts.  But those occasions have included one in the Second Circuit Court of Appeals in 2012, and another in the Southern District of New York just last month.  Are Brill and the HuffPo unaware of this decisive case law?

In 2012 the Second Circuit reversed the conviction of Alfred Caronia for what was clearly and admittedly off-label marketing of a drug to an FDA-unapproved population.  Here is the key language of the court:

[W]e decline to adopt the government’s construction of the FDCA’s misbranding provisions to prohibit manufacturer promotion alone as it would unconstitutionally restrict free speech. We construe the misbranding provisions of the FDCA as not prohibiting and criminalizing the truthful off-label promotion of FDA-approved prescription drugs. Our conclusion is limited to FDA-approved drugs for which off-label use is not prohibited, and we do not hold, of course, that the FDA cannot regulate the marketing of prescription drugs. We conclude simply 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. 

Then, just last month, Judge Engelmayer of the Southern District of New York actually granted an injunction against the FDA, prohibiting it from bringing a so-called "misbranding" action against a company called Amarin for off-label marketing of a drug to an FDA-unapproved population.  That opinion was covered at Manhattan Contrarian on August 10 here.  After quoting the language of Caronia above, Judge Engelmayer concluded as follows:

Therefore, insofar as Amarin seeks preliminary relief recognizing its First Amendment right to be free from a misbranding action based on truthful speech promoting the off-label use of an FDA-approved drug, Amarin has established a substantial likelihood of success on the merits on this point.  

Brill seems to think his view of the law is supported by the fact that in 2013 (after the Caronia decision) J&J settled FDA charges over the off-label marketing of Risperdal and paid a fine in excess of $2.2 billion.  So?  To me, all this proves is that large companies with a franchise to protect will never take the government to trial.  Partly that's because they can't risk losing, but more important is that they can't risk having the FDA hold up twenty other drugs in the pipeline as revenge.  After the clear holding in Caronia, the FDA cooked up a preposterous position that Caronia's outcome was just a result of peculiar aspects of the trial in that case, and that the Second Circuit's statements as to legality of off-label marketing were not the "holding" of the case.  Judge Engelmayer shreds those arguments in the Amarin decision.  That 71-page decision is too long to summarize here, but read it yourself at the link above if you are curious.  The important thing to note is that these precedents have been set in the situations of an individual (Caronia) and a very small company (Amarin) who have nothing to lose beyond the particular case in which they are involved.  Not so for the big companies.  As Judge Engelmayer notes in his opinion, lots of other big pharma companies have settled FDA off-label marketing charges for huge dollars, including a $3 billion settlement of GSK involving marketing of drugs including Paxil and Wellbutrin, and a $2.3 billion settlement with Pfizer over Bextra and other drugs.  That doesn't mean that any of the conduct was in fact criminal.  It's just a reflection of the leverage that the petty and vindictive bureaucrats at the FDA have over their subjects.

Brill also endlessly cites as evidence of J&J's criminal intent various facts indicating that J&J took steps to conceal from the FDA the actions it was taking to market Risperdal off-label.  Sorry, but again that proves absolutely nothing.  Here we have a lawless bureaucracy repeatedly threatening to prosecute you for conduct that is completely legal, and that you know is legal.  They have hundreds of lawyers and infinite resources.  They have extracted billions upon billions of dollars from your peer firms for conduct that is completely legal.  How would you proceed?

If you read this series, or at least the first 6 Chapters (I would not recommend it) you will come away with the clear impression that Risperdal is way too dangerous to be used for the unapproved populations of young people and the elderly.  Well, what about this:  The J&J 2013 Risperdal settlement covers off-label marketing of the drug to those two populations in the period 1999 - 2005.   Dare we mention that Risperdal was specifically approved by the FDA for treatment of children and adolescents ages 10 - 17 for certain conditions in 2007?  That's right, in 2013 the FDA collected $2.2 billion for off-label marketing of a drug to a population and for conditions that it had actually approved well before the settlement?  Huh?  Here's what you (and Steve Brill) don't understand:  This has nothing to do with whether this drug is appropriate and useful for these populations.  This has only to do with the FDA protecting its bureaucratic prerogatives and fiefdoms.  The FDA would gladly see half of the American people die while they consider and reconsider for years approving some drug, in order to establish the proposition that the FDA and only the FDA has the bureaucratic say-so to determine when and how a drug can be marketed.  I can't find any discussion of that issue in Chapters 1 through 6 of Brill's series.  Maybe it will turn up in Chapter 14.

There are lots of problems with the pricing and marketing of pharmaceuticals in the United States today.  The large majority of drugs are paid for by third-party payers, including the government (Medicare and Medicaid) and insurance companies, and the pharma companies have perfected the art of charging high prices to these price-insensitive entities.  Many important issues in this arena could have been explored by Mr. Brill had he chosen to do so.  Instead, he chose the easy and cheap narrative of evil company committing crimes to put profits before people.  That narrative is just wrong, and misses everything important.