Vascular Solutions, CEO get ready to take on FDA conspiracy charges

A Twin Cities medical device maker and its chief executive, both facing conspiracy and other charges, are preparing to fight back in court by taking aim at the Food and Drug Administration's authority to ­regulate sales pitches made to doctors.

Vascular Solutions Inc., the Maple Grove maker of surgical catheters and other devices, and its co-founder and CEO, Howard Root, will argue in court that he and the company had a First Amendment right to tell doctors the truth about how to use a vein-closure device, even if the FDA doesn't like the sales pitch, documents and lawyers say.

The argument is anathema to the FDA, which has the responsibility to protect the public from unsafe medical equipment and drugs. And though the free-speech defense may alarm patient-safety advocates, attorneys say it puts Root and his company on the front lines of a corporate pushback against the FDA's blanket restrictions on the content of ­commercial speech.

"I think it's valid. They have some good arguments, based on recent Supreme Court authority," said ­Steven Aggergaard, a Minneapolis-based commercial litigator with Bassford Remele who advises clients on First Amendment issues. In interviews, two other health care attorneys not involved in the case agreed.

Vascular Solutions is one of the largest cardiovascular device makers in the state, with 450 employees and more than $100 million in annual revenue. Along with Root, it was indicted by a federal grand jury in San Antonio in November on charges of conspiracy and introducing adulterated and misbranded medical devices into interstate commerce. Both have pleaded not guilty, and Root, who remains at the helm, has told analysts "the allegations are false and the truth will come out."

Also proclaiming his innocence is one of the company's top sales reps, Glen Holden, who was indicted on six counts of perjury and obstruction. The indictment accuses Holden of falsely telling grand jurors that he didn't intend to increase sales of the device for unapproved use. But Vascular Solutions says recent federal court decisions supporting the free-speech rights of health care companies could doom the prosecution's case.

The device at the center of the dispute was called the Vari-Lase Short Kit, which used laser energy to seal off diseased blood vessels that lead to varicose veins. The company has said it voluntarily pulled the $300 device off the market in 2014 after it sold only 1,800 kits nationwide in seven years.

Sealing off perforators can create blood clots that can travel toward the lungs and cause a potentially life-threatening pulmonary blockage, prosecutors say, though they don't name any affected patients. The two sides disagree about the safety findings from a company-sponsored 2007 clinical trial.

The First Amendment defense comes into play regarding the precise sales terminology used by Vascular Solutions reps and managers, including sales strategies approved by Root.

In July 2013, Holden told Texas grand jurors that he sold doctors on the device by saying it could be used to treat "short vein segments," without explicitly saying those were perforator veins.

"Did you try to increase VSI's sales by selling the Short Kit for use on perforators?" a lawyer asked Holden.

"Not for use on perforators," Holden replied, according to the indictment. "I try to increase VSI's sales on every product I have, but it's not for a … specific perforator treatment with that kit. No. Short vein segments." Holden was indicted on perjury charges for saying that.

Doctors have the right to use devices on consenting patients in ways that the FDA has not approved. They can even bill Medicare or private insurers for these off-label treatments in some cases, which advocates say drives medical innovation.

But companies are not supposed to actively market off-label uses.

That's exactly what an East Coast drug salesman named Alfred Caronia was caught on tape doing in 2005, when he encouraged a doctor to use Jazz Pharmaceuticals' powerful depressant Xyrem for medical conditions not approved by the FDA.

Caronia was eventually convicted of conspiracy to introduce a misbranded drug into interstate commerce. In a 2-1 decision, judges with the 2nd U.S. Circuit Court of Appeals in New York threw out the conviction because Caronia had a First Amendment right to speak truthfully about the drug.

"The government clearly prosecuted Caronia for his words — for his speech," the majority ruled. "A pharmaceutical representative's promotion of an FDA-approved drug's off-label use is speech. As the Supreme Court has held, 'Speech in aid of pharmaceutical marketing … is a form of expression protected by the Free Speech Clause of the First Amendment.' "

"Connecticut, however, is within the Second Circuit, which in 2012 recognized the First Amendment problems with the government's position," Vascular Solutions' lawyers wrote in a request to move the case to a different court, which failed. "The government conspicuously did not seek charges regarding the actual sales by Holden, however — perhaps because it recognized the awkwardness of prosecuting someone in Texas for conduct that was lawful in Connecticut where it occurred."

In court filings, prosecutors say the Caronia case isn't applicable because it would protect only truthful speech, and company officials misled doctors about the device's safety and lack of FDA approval.

Root's lawyer and his spokesman declined to ­comment for this story. Prosecutors noted that the reference to Caronia in the change-of-venue filing was a clear preview of Root's upcoming legal defenses. Private attorneys not involved in the case said there was no reason why the broad free-speech principles in a case about drugs would not also apply to medical devices.

"There is no doubt that that argument must be made, considering the state of the law right now," said Matt Forsgren, a Greene Espel litigator in Minneapolis whose clients include well-known health care companies. "This case is a further exploration of a murky area of the law."

Patients and their advocates, meanwhile, say the FDA is already overreacting to corporate demands about free-speech rights. The administration has proposed, but not yet finalized, rules to let drug companies tell doctors about industry-funded studies that say products are safer than FDA-approved labels would have it.

Joe Carlson • 612-673-4779