Where does the line fall between good faith and criminal intent? That was the question that a Massachusetts federal jury faced in July as it deliberated criminal charges against William Facteau and Patrick Fabian, ex-Acclarent executives, who were indicted on multiple charges of fraud and misbranding a medical device. Acclarent’s device, the Relieva Stratus Microflow Spacer (“Stratus”), was cleared by the FDA for use as a spacer to maintain an opening in the sinus. Although the FDA expressly rejected Acclarant’s request to expand the indicated use of the device to include delivery of drugs, the government alleged that Acclarent promoted Stratus as a delivery method for the steroid drug Kenalog.

The arguments at trial focused on whether, in the defense’s view, Acclarent had done no more than claim that it had a good faith belief that it could promote the proven success of Stratus for delivering Kenalog, or the government’s position that the company’s leadership deliberately evaded the FDA’s requirements in order to put a product on the market without adequate data. The defense highlighted how, after receiving clearance for Stratus as a spacer, Acclarent asked the FDA to expand the indications for use to include the delivery of Kenalog, a corticosteroid. The FDA would not approve the expanded indication without multiple clinical trial data. The government, on the other hand, emphasized that Acclarent withheld this information when promoting Stratus to Ethicon, a subsidiary of Johnson & Johnson that bought Acclarent in 2010. After the deal closed and Ethicon realized Stratus lacked FDA clearance to deliver steroids, Ethicon ordered Acclarent to stop all off-label promotions to doctors and to notify the FDA. While Acclarent did contact the FDA, evidence shows that Facteau and Fabian continued encouraging sales representatives to promote Stratus for the delivery of Kenalog. An Acclarent sales representative testified that sales training focused on how to promote the use of Stratus with Kenalog without directly promoting the off-label use, and the videos used to train physicians showed Stratus being used to deliver a white substance resembling the steroid.

Ultimately, after six weeks of trial and almost three days of deliberations, the jury decided that good faith won over the alleged criminal intent. Fabian and Facteau were acquitted of all felony charges but convicted of ten misdemeanor counts of misbranding and adulteration of Stratus. The jury concluded that while the off-label promotion rules were broken, there was not enough evidence to conclude that the defendants had the intent to mislead or defraud doctors or the FDA. The misdemeanor convictions were based on statutes that impose strict liability, for which no finding of a criminal intent is required. A misdemeanor violation of the Food, Drug and Cosmetics Act (“FDCA”) has a maximum sentence of a year in prison per count, a year of supervised release, and a fine of either $100,000 or double the gross gain or loss.

When the dust settled from the jury’s verdict, Facteau and Fabian submitted a formal request for acquittal of the misdemeanor convictions. If the federal judge denies their request for judgment, the ex-Acclarent executives will seek a new trial. The outcome of this case may affect how medical device manufacturers deal with FDA oversight, particularly where a manufacturer seeks to market a device for a specific use but only has data addressing a more basic purpose. At the same time, the outcome may serve as an indication to the FDA that bringing similar criminal charges for off-label promotion in the future may prove more difficult than anticipated.

This post was written with assistance from Megan E. Robertson, a 2016 Summer Associate.