In Re ORTHOPEDIC BONE SCREW PRODUCTS LIABILITY LITIGATION, Plaintiffs Legal Committee, Appellant

COWEN, Circuit Judge,

dissenting.

The majority endorses a claim of “fraud on the FDA” under circumstances that will expose manufacturers to fraud liability for seeking desirable innovations in a product’s use, distort the penalty scheme established by the FDCA and its regulations, and generate substantial liability when manufacturers respond to doctors’ widely accepted practice of purchasing medical products for off-label uses.

To appreciate how much this case departs from previous cases involving “fraud on the FDA,” it is important to see what all agree is not fraud in this case. When Buckman sought approval from the FDA for using its screws on long bones, Buckman did not present any false evidence about the similarity of the screws to the already approved long bone screws, and there is no dispute that AcroMed’s screws are “substantially equivalent” to the pre-existing screws. The FDA’s determination that AcroMed’s screws should be approved for long-bone use has never been questioned.

The basis for the majority’s conclusion that Buckman committed fraud on the FDA is that in seeking long-bone approval AcroMed and Buckman really intended to market the screws for spinal use. That is, once the screws could be sold legally for long-bone use, AcroMed planned surreptitiously to induce physicians to buy the screws for spinal use. Clearly, if AcroMed actively marketed the screws for spinal use in violation of FDA’s limited approval for long-bone use, AcroMed (and Buckman to the extent it participated in the plan) would have violated the FDA’s marketing rule and could be held accountable by the FDA. A violation of the marketing rules, however, is not fraud on the FDA; it is an ordinary transgression of an agency’s regulatory rules. AcroMed and Buckman also could be held liable by doctors and, in most states, their patients if AcroMed and Buckman told doctors that the bone screws were approved by the FDA for spinal use or made other material misrepresentations. But the statements made to doctors are not the basis for the majority’s theory of “fraud on the FDA.” To the contrary, the majority finds fraud in Buckman and AcroMed’s statement to the FDA of the intended purpose of the screws in their application for long-bone approval. It is on this point that the majority creates dangerous confusion.

The mere fact that AcroMed or Buckman really wanted approval for the spinal use of the screws does not make their request for long-bone approval fraudulent. Seeking approval for one use should not preclude a manufacturer, via the penalty of fraud liability, from seeking approval for another use for the same product. Expanding the uses for *830 existing products will often be a very desirable source of progress and innovation in medical products. A manufacturer may even deliberately start off by seeking approval for a conventional use while waiting to gain approval for a different, novel and potentially highly profitable use of the product. Such a strategy could have the beneficial effect of increasing competition in the market for the conventional use while at the same time providing revenue to make it easier to negotiate the arduous FDA approval process. By reading the phrase “intended use” in the application as a declaration of what the manufacturer wants ultimately to seek with the medical device, rather than simply as a request for a specific FDA approval (with nothing implied about future requests), the majority creates an interpretation that is economically unrealistic and is likely to hinder technological growth.

The legal concept that the FDA was “defrauded” because a company desired approval for' a different use from the one requested and ultimately approved is particularly hard to sustain in this case. Before the FDA approved the screws for long bones, it had twice previously rejected Buckman and AeroMed’s applications for spinal use. Those prior applications made unmistakably clear to the FDA that Buckman and AcroMed wanted as their first choice approval for spinal use of the screws. There was no deception about AcroMed’s ultimate goals. The FDA most assuredly knew what clearance was sought and what clearance was granted or denied.

The majority may believe that what distinguishes this case from one where a company simply seeks approval for one use while really wanting approval for another (and hence what prevents this decision from flatly prohibiting innovation), is that Buckman and AcroMed obtained long bone approval allegedly with the intention of illegally marketing the screws for off-label use. Such a theory, however, stretches the “intended use” statement into an all purpose guarantee that an applicant will not violate other FDA rules. Under the majority’s position the only basis for finding that AcroMed and Buckman committed fraud on the FDA is that they allegedly intended to violate the FDA’s regulations prohibiting marketing for off-label uses. It is hard to see why that is not in effect creating a private right of action for a violation of the FDA regulation, and it is difficult to reconcile that conclusion with a point the majority itself made in footnote 8: “controlling precedent bars recognition of a private cause of action under the FDCA, the MDA, or their implementing regulations.” Given the demanding detail of the regulatory process, and the wide variety of violations ranging from the innocuous to the serious, recognizing a state cause of action for violations of FDA regulations will greatly distort the penalty scheme established by the statute. The penalties attached to a violation of the FDA’s regulations will often be substantially increased, and enforcement of violations will no longer be controlled by the FDA’s prosecuto-rial discretion.

The majority’s position is problematic in another closely related respect. The FDA and the medical community have long recognized the importance of doctors’ off-label uses of medical products (uses not indicated on the label or approved by the FDA). See James M. Beck & Elizabeth D. Azari, FDA, Off-Label Use, and Informed Consent: Debunking Myths and Misconceptions, 53 Food & Drug L.J. 71 , 72 (1998). 1 Doctors may, in *831 the exercise of their professional judgment, decide that based on current medical research an unapproved use of a product best serves a patient’s needs.

Permitting off-label uses may seem anomalous given that the FDA’s labeling and marketing restrictions prevent companies from actively pursuing an off-label market. Moreover, the fact that the FDA lacks authority to regulate the practice of medicine might imply that off-label uses amount to an end-run around the agency’s authority. But the FDA’s own position on off-label use reveals that off-label uses are a valuable part of the practice of medicine. 2 The difficulty not confronted by the majority is that there is a very real tension created between endorsing off-label uses but preventing marketing for those uses. Close questions will be raised about whether a manufacturer was simply responding to doctors’ desirable demand for off-label uses, or whether a manufacturer was impermissibly trying to create an off-label market and circumvent the FDA’s regulation. As matters stood before this decision, the FDA was left to police the boundary between permissible and impermissible responses to off-label demand. The majority’s theory, however, now throws into the jury box the question of when unacceptable “marketing” has taken place.

Consider the problem of deciding when impermissible “marketing” has taken place in manufacturer-sponsored continuing medical education (“CME”). After manufacturers began in recent years financially underwriting more CME seminars and materials, the FDA developed, in response to Congressional hearings and ensuing confusion over an FDA concept paper, a twelve-factor test to decide when a manufacturer-sponsored CME seminar violated the FDA’s rules on marketing. See Washington Legal Foundation v. Friedman, No. 94-1306, 1998 WL 456372, *4 (D.D.C. July 30, 1998) (FDA unconstitutionally restricted commercial speech because less restrictive means of achieving the government’s interest were available). As is illustrated by both the complexity of the FDA’s test and its efforts to hone its response, difficult and subtle balancing is called for in evaluating manufacturers’ roles in the creation and distribution of information about off-label uses of drugs and medical devices. 3 The problem is not easily dismissed. Once it is accepted that off-label uses are desirable, it is difficult to maintain that doctors should be shielded from truthful information concerning when and how to use a product for an off-label use. Patients will benefit by having their doctors informed about off-label uses.

Contrary to the majority’s position, the problem of allowing juries to determine when a manufacturer has improperly advertised an off-label use is not only that it will impose too stringent a rule, chilling dissemination of valuable information about off-label uses; it is also that jury decisions lack the consistency of an agency-enforced rule. Even apart from the harm of restricting beneficial information about off-label uses, and the need for a consistently enforced rule wherever the line is drawn, a jury’s assessment of liability *832 is problematic in a third sense: Massive liability will be imposed where the FDA would not find any misconduct, and the cost of medical devices will be needlessly raised.

It begs the question simply to respond, as the majority does in footnote 7, that a manufacturer will not face liability when it actually markets for the “intended use” listed in the 510(k) application and answers requests for information about off-label uses. The problem remains: the majority permits liability for fraud on the FDA when a jury concludes that a manufacturer conducted impermissible marketing, demonstrating that the manufacturer “defrauded” the FDA in its statement of intended purpose. Presumably, the majority’s response is not that juries’ interpretations of “marketing” will pose limited problems because a manufacturer can insulate itself from liability for fraud on the FDA by the simple act of making sales for the intended use listed in the 510(k) application. That seems like a very wooden distinction, for why should those sales be so important from the standpoint of liability for fraud on the FDA? Isn’t the problem illegal marketing? If the majority does not require any showing of illegal marketing, how can liability be justified? The effect of the rule will be to prohibit manufacturers from making otherwise entirely legal responses to demand for off-label uses, responses that the FDA itself accepts as desirable. Or even worse, the rule will very directly prohibit innovation in the uses of drugs and devices by triggering fraud liability when an application is filed for approval of a new use. Once it is admitted that the majority’s theory focuses on illegal marketing, we are thrown back on all the problems listed above.

Nowhere does the majority demonstrate the need for its new theory of fraud on the FDA. The plaintiffs can be adequately compensated by their doctors under existing law for any malpractice demonstrated; the defendants can be held liable for fraud if they told doctors they had FDA approval that they did not; and the FDA remains free to prosecute when it feels impermissible marketing has taken place. Manufacturers also can be held liable under product liability law.

In sum, when juries are permitted to displace the FDA’s judgment about whether a manufacturer has engaged in improper marketing, they will fail to provide a consistent standard, inhibit valuable exchange of information on off-label uses, and needlessly raise the price of drugs and medical devices. It seems very unlikely that Congress intended a state cause of action to intrude so much both in the enforcement of the FDCA’s regulatory scheme and in the severity of the penalties attached to a violation.

I most respectfully, but vehemently, dissent.

. The article explains that: "It is an accepted principle that once [the] FDA determines that a drug or device can be marketed, a physician's discretionary use of that product (the practice of medicine) is not restricted to the uses indicated on FDA-regulated labels. Off-label use is widespread in the medical community and often is essential to giving patients optimal medical care, both of which medical ethic[isls], [the] FDA, and most court recognize.” Beck & Azari, supra, at 72. The article points out that the FDA stated in a 1982 Drug Bulletin that: "‘unapproved’ or more precisely 'unlabeled' uses may be appropriate and rational in certain circumstances, and may, in fact reflect approaches to drug therapy that have been extensively reported in medical literature... Valid new uses for drugs already on the market are often first discovered through serendipitous observations and therapeutic innovations ...” Beck & Azari, supra, at 77. With regard to bone screws in particular, the article quotes the following statement by the FDA in a 1993 publication titled Food and Drug Administration, Update on Pedicle Screws: "In practice, surgeons often use orthopedic screws which FDA has cleared for other purposes ... as pedicle *831 screws. Such use of medical devices for non-approved purposes has traditionally been regulated by the hospitals in which the physicians practice and not by the FDA.” Beck and Azari, supra, at 77.

. See Washington Legal Foundation v. Kessler, 880 F.Supp. 26 , 28 n. 1 (D.D.C.1995), Was hington Legal Foundation v. Friedman, No. 94-1306, 1998 WL 456372, at *3 (D.D.C. July 30, 1998) and supra note 1.

. Recent legislation which, once effective, will supersede the FDA’s restriction on distributing printed material underscores the incongruity of the majority's position. The Food and Drug Modernization Act of 1997, Pub.L. No. 105-115, 111 Stat. 2296 (to be codified at 21 U.S.C. § 360aaa, et seq.) permits manufacturers to distribute information about off-label uses of drugs and devices provided certain requirements are met. Among the requirements for a drug, for instance, is that the manufacturer must have submitted an application for approval of the new, off-label use. Thus, manufacturers are allowed to submit applications for new uses and to distribute certain information about the off-label use while an application for the off-label use is still pending. On the majority's theory, will the manufacturer have committed fraud on the FDA, notwithstanding the new statutory provisions, if the manufacturer secures approval for one use, distributes materials on off-label uses in compliance with the statute, and does so while its primary objective is to obtain approval for the off-label use pending with the FDA?