The appeals court essentially agreed, noting that Caronia never conspired to put false or deficient labeling on the drug.
"The government clearly prosecuted Caronia for his words – for his speech," the court said.
"This could be a watershed moment for the pharmaceutical industry," said Michael Buchanan, a former federal prosecutor who now works for a New York law firm that represents drug companies.
He said the decision will be good for consumers and doctors because it will allow drug companies to disseminate more information about their products, allowing for more informed decision-making.
It is likely the decision, if upheld, will make it much more difficult for the Department of Justice to bring cases against drug companies for off-label drug promotion, he said.
Over the last decade or so, the Justice Department has obtained billions of dollars from drug companies after accusing them of promoting their products for off-label uses.
In its most recent prosecution in July, the department obtained a record $3 billion settlement from GlaxoSmithKline for its marketing of several drugs, including Wellbutrin, Paxil, and Advair.
Tamara Piety, an expert on commercial speech and the First Amendment and a professor of law at the University of Tulsa, said that if the decision is upheld by the Supreme Court it could open the doors to off-label television advertising of drugs. Piety predicted that a majority of the Supreme Court Justices would be sympathetic to the ruling.
She said the pharmaceutical industry has been trying for years to overturn the off-label marketing prohibition.
"It looks like they finally succeeded," she said.
Dr. Steven Nissen, a cardiologist with the Cleveland Clinic, said the decision was short-sighted and could result in patients being exposed to unnecessary risks.
"Off-label promotion is not about free speech, it is the medical equivalent of yelling fire in a crowded auditorium." he said.
Dr. Andrew Kolodny, a New York psychiatrist who has been trying to reform the use of narcotic painkillers in the U.S., said the decision was terrible for public health.
"A large portion of Americans already are taking drugs with serious risks that outweigh the benefits," he said.
"This is going to get much worse," Kolodny said. "It's a safe bet that health outcomes will decline from medication side effects, while spending on prescription drugs will continue to rise."
Ed Silverman, who operates the popular Pharmalot blog, said drug companies had been pushing off-label promotion as a free speech issue for years.
"It (the decision) is vindication for the pharmaceutical industry," he said.
In a statement, the Pharmaceutical and Research Manufacturers of America said it was pleased that the court found that the FDA's ability to regulate communication about medicine is circumscribed by the First Amendment.
"PhRMA believes that truthful and nonmisleading communication between biopharmaceutical companies and healthcare professionals is good for patients, because it facilitates the exchange of up-to-date and scientifically accurate information about new treatments," PhRMA spokesman Matthew Bennett said in a statement.
Dr. Sidney Wolfe, with the watchdog group Public Citizen, said the decision will further weaken the FDA.
Caronia was accused of conspiring with a psychiatrist who was a hired drug company speaker.
In overturning Caronia's conviction, the appeals court cited a 2011 U.S. Supreme Court decision involving a Vermont law that said "speech in the aid of pharmaceutical marketing ..." is a form of expression protected by the First Amendment. The law had barred drug companies from obtaining and using prescriber information for marketing purposes when a range of others such as private and academic researchers could acquire the information.
The Court of Appeals said the government's view of the law essentially legalized off-label prescribing but prohibited the free flow of information about that.
Arnold Friede, a former FDA and drug company attorney, said the next step may be for the government to ask the entire appeals court to rehear the case.