Venue, Preemption Issues Dot Legal Landscape

The Supreme Court has been busy of late on several fronts of interest to those in the life sciences, and may be busier yet if it accepts a case dealing with preemption. The Court decided a case recently dealing with venue, but there is some disagreement as to how much that decision clarified the questions at hand.

Is Lohr back in play?

Those who find the PMA preemption discussion fascinating will enjoy the potential for a reexamination of preemption for class II devices if the U.S. Supreme Court grants cert for a case addressing surgical meshes. One of the more interesting aspects of this case is that any push for 510(k) preemption might be due to more stringent requirements for these applications imposed by the FDA over the past few years.

J&J subsidiary Ethicon requested cert for Ethicon v. Huskey, which takes up a synthetic surgical mesh applied for stress urinary incontinence. The jury trial returned an award of more than $3 million for the plaintiff, and Ethicon appealed the case on the grounds that the judge in the first trial disallowed evidence as to the company’s adherence to FDA premarket requirements, along with several other bits of regulatory information related to the device.

The appeals court sided with the district court, citing with the Federal Rule of Evidence 403 as justification for omitting the evidence in question, but the appeals court decision also argued that 510(k) filings only “tangentially” deal with safety and efficacy. The court cited Medtronic v. Lohr without comment in this section, which seems likely to provoke a discussion as to whether the FDA’s increasing demands from FDA for 510(k) filings begins to approach the threshold for specificity that is the foundation for PMA preemption. Or at least that’s the argument device makers are inclined to make.

Either way, Lohr dealt with the statute as it existed in 1982, when the FDA cleared the Model 4011 pacemaker, and thus changes imposed by Congress since then, including the Safe Medical Devices Act of 1990, were not considered. This legislation was driven almost entirely by concerns about the tracking of adverse events for class II devices, but the Supreme Court decision in Lohr claimed that a typical 510(k) review takes only 20 hours as opposed to the average of 1,200 hours needed to review a PMA filing.

Whether those times still hold is difficult to know, but the most recent FDA performance report for the soon-to-expire device user fee agreement suggests that overall PMA review times are down to 163 FDA days while the target for 510(k) review times is still 90 FDA days. The question one might ask oneself is: If it takes the FDA 90 days to get through 20 hours of review time for a 510(k), how can it take only 163 days to put 1,200 hours into a PMA?

Venue, vidi, vici

Those who see the question of forum shopping in a negative light might be encouraged by a recent decision in the Supreme Court that seems to put the clamps on this practice. The fact that the decision in Heartland v. Kraft was unanimous would seem to bring the venue question to a thunderous close, but there is some skepticism as to whether the question is fully answered.

Justice Clarence Thomas wrote the 8-0 decision in Heartland  – Justice Neil Gorsuch did not take part – and said that §1400 of Title 21 of the U.S. Code was unaffected by congressional modification of Title 21’s §1391. Thomas also pointed to Fourco Glass v. Transmirra Products, the 1957 case in which the Supreme Court declared that the word “resides” means the location of incorporation for a U.S. domestic company.

Former PTO director Todd Dickinson noted that the outcome leaves a few questions unanswered about cases that are already in process, but he also said that stand-alone legislation by Sen. Jeff Flake (R-Ariz.) directed toward venue might be futile. On the other hand, former Senate Judiciary Committee chairman Orrin Hatch said he will draft a bill to take up the vexatious venue problem, so there is clearly some interest on Capitol Hill.

There are those who believe that Heartland might influence whether patent litigants will resort to multidistrict litigation to go after infringers. The America Invents Act disallowed the use of joinder based merely on the charge that each of the named defendants infringed the same patent, and Heartland would seem to suggest that a patent holder will spend a lot more time on the road in pursuit of damages, although a lot of potential targets are located in Delaware thanks to that state’s status as the home of the limited liability corporation.

Multidistrict litigation might seem a handy way to pursue infringers in numerous jurisdictions, but MDLs are infrequently used for patent cases. Would the U.S. Judicial Panel on Multidistrict Litigation (JPML) be persuaded by an application to consolidate patent lawsuits when only half a dozen or so defendants are named? By some accounts, patent MDLs currently account for less than 5 percent of all MDLs, although this might reflect nothing more than underutilization.

Still, it seems plausible that a plaintiff will have to identify a very similar set of allegations for a given number of defendants in order to prod the JPML into action. A lack of sheer numbers presents one problem, but the combination of small numbers and dissimilar allegations could prove fatal to an effort to consolidate patent lawsuits via the JPML.

U.S. Supreme Court Clamps Down on Mass Tort State Court Lawsuits

Jordan Lipp | Partner, Davis Graham & Stubbs LLP

Yesterday morning, in an 8-1 decision, the United States Supreme Court determined that plaintiffs who did not reside in California could not sue Bristol-Myers Squibb in California.  The decision is the latest one in a string of decisions from the United States Supreme Court, which are limiting the scope of personal jurisdiction – i.e., where a company can get sued.  The question of where a company can or cannot get sued is one of the most important issues in defending lawsuits against life science companies.  And this lawsuit is a classic example of these issues.

As discussed more in earlier blog posts as we’ve followed this litigation, this appeal involved personal jurisdiction issues in a case where 678 individuals, consisting of 86 California residents and 592 nonresidents, all alleged adverse consequences from the use of Bristol-Myers Squibb’s drug Plavix.  Bristol-Myers Squibb is incorporated in Delaware, headquartered in New York City, with substantial operations in New Jersey.  The lawsuits were filed in San Francisco Superior Court.  Bristol-Myers Squibb challenged the jurisdiction of California courts to hear the claims of plaintiffs who did not reside in California.  While the California Supreme Court found there was no general jurisdiction (i.e., whether a defendant can be sued in the forum regardless of whether the case is related to the forum), the California Supreme Court found that there was specific jurisdiction (i.e., case-linked jurisdiction) due to Bristol-Myers Squibb’s “wide ranging” contacts with California.

Yesterday, the United States Supreme Court reversed the California Supreme Court.  As “the nonresidents were not prescribed Plavix in California, did not purchase Plavix in California, did not ingest Plavix in California, and were not injured by Plavix in California,” the United States Supreme Court Court found specific jurisdiction lacking.  Specific jurisdiction in these circumstances is absent no matter how many other connections Bristol-Myers Squibb had to California, no matter how many California residents had sued Bristol-Myers Squibb for the same conduct in California, and no matter how efficient having combined litigation  in California might be.  While hardly a surprising ruling, this decision could have far reaching consequences in large-scale drug and device litigation.  While a drug or device company can be sued in the state in which it is headquartered or incorporated (i.e., the concept of general jurisdiction), it will be much harder for plaintiffs to sue drug and device companies in any other plaintiff-friendly jurisdictions.  Rather, this Bristol-Myers Squibb decision will continue the trend in confining plaintiffs to suing drug and device company only in their own home-state, or where the drug or device company is headquartered / incorporated.

Biosimilars, Biostatisticians, and the New EEU

There are very few days during which the worlds of drugs and medical devices are entirely quiescent, thanks to very active American courts and international regulatory churn. There is some good news in all this, but how good is it?

If you’re in the biosimilars business, the latest news is quite good, indeed.

SCOTUS rules for Sandoz

The U.S. Supreme Court ruled on June 12 that makers of biosimilars do not have to wait six months after the issuance of a biologics license application to begin marketing that product, a development that could bring some less costly biotech drugs to market more quickly and possibly take a bite out of spending on these agents.

In a 9-0 vote, the Court ruled in favor of Sandoz in Sandoz v. Amgen, a case that made a stop at the Court of Appeals for the Federal Circuit, where the outcome was quite different. Sandoz had argued that the terms of the Biologics Price Competition and Innovation Act of 2009 had essentially worked to add half a year of exclusivity to the 12 years already granted by the statute, and by some accounts, Sandoz’s Zarxio is about 15 percent less expensive than Amgen’s Neupogen, a drug for chemotherapy-induced neutropenia.

The news might not change the field dramatically in the near term, given that the FDA has approved only about half a dozen biosimilars to date, but one possible candidate for a quick entry to market is an oncology biosimilar for Avastin, which will undergo an FDA advisory committee review in mid-July. In an ironic twist, Amgen teamed up with Allergan to produce this biosimilar.

Expert witness refuted in Zoloft lawsuit

Pfizer scored a victory in the running lawsuit pertaining to the company’s flagship antidepressant Zoloft, but what may have been the most interesting part of this story is that a court rejected expert testimony relating to allegations that the selective serotonin reuptake inhibitor (SSRI) causes congenital heart defects.

The decision may have brought to a close an effort by more than 300 litigants, which absorbed a second consecutive negative outcome in the U.S. Court of Appeals for the Third Circuit. Both the appeals court and a district court decreed that the expert witness, Nicholas Jewell, a biostatistician at the University of California at Berkeley, had failed to plausibly link the drug to the birth defects. Among the problems with Jewell’s presentation is that he had rejected meta-analyses he had previously cited in a separate lawsuit pertaining to another SSRI.

Whether the plaintiffs will take this lawsuit any further is difficult to forecast, but a footnote on page 10 of the Appeals Court decision remarked that the plaintiffs’ attorneys had conceded that they are “unable to establish general causation” if the courts jettisoned Jewell’s testimony. Summary judgment was granted in favor of Pfizer.

This is not the only multi-district litigation keeping attorneys at Pfizer busy, however. A very active set of lawsuits dealing with proton pump inhibitors and purportedly associated kidney damage would seem to implicate the OTC version of Nexium, marketing rights for which Pfizer picked up five years ago in a deal with AstraZeneca. The U.S. Judicial Panel on Multidistrict Litigation (JPML) declined in January to consolidate these lawsuits, but another motion for consolidation has been filed by attorneys with Seeger Weiss of New York.

Regulations, regulatory agreements on the move

Efforts to ramp up medical device regulatory schemes in outside-U.S. jurisdictions are nothing new, but device makers can add Malaysia and the Eurasian Economic Union (EEU) to the list of national and international entities diving into deeper regulatory waters. The news for device makers is somewhat mixed, but greater clarity alone is sometimes enough to overcome other considerations.

First, Malaysia’s Medical Device Authority has declared that adverse events associated with medical devices will have to be reported to the agency within 30 days. This apparently applies to all devices that are on the Malaysian market, regardless of where the adverse event took place. Any fatalities have to be reported within 10 days, and device makers have a mere 48 hours to advise the agency of any problems that might carry a public health consideration.

The EEU continues to work toward a single market for drugs and devices, a move which if successful would capture the markets of Russia and four other nations for a total 2015 population of nearly 184 million. There are reports that Tehran is interested in a free trade agreement with the EEU, although there is no indication that Iran would take part this new med tech regulatory bloc despite the deepening geopolitical ties with Moscow. Serbia is likewise said to be interested in doing business with the EEU, but it’s not clear whether Belgrade has full-blown membership in mind, either, although the protracted and difficult negotiations for entry into the European Union might strike some as suggestive.

To date, the EEU regulatory regime lacks several critical documents, such as a framework for quality management systems. Registration requirements for this international regulatory system would be phased in over the next four years, however, giving industry a little breathing room for offerings already available in this market.

Of Combo Products and High Courts

Tourists to our nation’s capital can always find plenty to do, and the same can be said for those in the life sciences with an ear for crucial policy matters. Following are two items of interest to makers of FDA-regulated products, one of which may have a significant influence over FDA regulation over an increasingly important class of medical products, while the other addresses federal prosecution under the responsible corporate officer doctrine.

Misgivings regarding the FDA’s CPPC

The FDA’s Combination Products Policy Council (CPPC) has a pretty serious lift in front of it, not the least of which is the thorny problem of differences in culture and attitude at the various centers that will be caught up in these combo product applications.

For some time, it has been known that many reviewers at the Center for Drug Evaluation and Research are no fans of the 510(k) program, apparently seeing it as an unforgivably fast track to market. Of course, the notion of substantial equivalence is a stranger in a strange land at CDER, which might explain a lot of the antipathy toward 510(k) devices there.

The agency opened a docket at regulations.gov in January, seeking feedback on topics the CPPC might address, and as might be expected, some of the consternation has to do with the process for determining a combo product’s primary mode of action. One concern in particular is how the agency will go about determining what sort of evidence will be needed to establish a product’s PMOA.

Other concerns relate to procedures for handling inter-center disputes regarding PMOA when the Office of Combination Products seems unable to broker a conflict. On the other hand, some have indicated that the interactive review process at CDER is more cumbersome than at the Center for Devices and Radiological Health, and thus would add time to what already promises to be a difficult review process.

One issue that was not conspicuous in comments to the docket was that of user fees. A sponsor will obviously have to pay more if the product’s PMOA is declared to be that of a drug, but what about fee sharing between centers? Will the lead center share user fees with the other center or centers? That’s not clear, and while reviewers at CDRH might find the drug user fees more than adequate, reviewers at CDER might find the device fee schedule unacceptably miserly.

SCOTUS says no to DeCoster

In one of the more interesting Park doctrine cases of recent vintage, the Supreme Court has opted not to hear arguments in the case of Decoster v. U.S., which allows to stand a three-month jail sentence imposed on the father-son ownership team in the egg business.

Many members of the bar see DeCoster as an outlier in that it entailed a jail sentence for Jack and Peter DeCoster, who are said to have been unaware of the violative behavior going on at their company, but more important is the prospect that this case will serve as a precedent for federal prosecutors who want to imprison those in the food, drug and device industries for problematic products. The high court’s decision to pass on the case means the two men will serve their jail sentences, but it also suggests that the Supreme Court will not hear this case until an appeals court other than U.S. Eight Appeals renders a different verdict in a similar case.

It may be an odd source of comfort to note that federal prosecutors will likely try out this new enforcement tool fairly promptly, which suggests that a different appeals court will have a crack at this question in fairly short order. Understandably, nobody in the food, drug or device business wants to serve as the subject of that case, but industry as a whole might want to see this question resolved as quickly as possible.

There is some question as to whether the current composition of the Supreme Court makes this the ideal time to take up such a case, but it’s difficult to predict which of the justices will be the next to leave the Court. Ruth Bader Ginsberg is a leading candidate for retirement because of her age (84), but Anthony Kennedy is no kid, either, as his 81st birthday is fast approaching. A Trump administration replacement for Ginsburg would seem to guarantee DeCoster will be overturned, but those in search of a predictable legal environment might say sooner is better, regardless of the prospects for churn at 1 First St. NE in our nation’s capital.

Multi-district Litigation; (Lack of) Evidence and Pending Legislation

Multi-district litigation (MDL) has its advantages even for defendants, but some see abuses, including a recent case involving an orthopedic device maker’s metal-on-metal hip implants. There is legislation in circulating on Capitol Hill that might address some of the problems associated with these mass actions, but the Trump administration and the House GOP have their hands full, raising the prospect that any corrective legislation might languish.

No evidence? No problem
Device maker Biomet faces an MDL case that took a new twist recently when a judge in Indiana dismissed the defendant’s motion to dismiss the claims of six plaintiffs in the product liability suit. A pretrial order filed in 2013 had required that plaintiffs find some means of preserving the device components in order to be eligible for the action, and several of the plaintiffs indicated that health care practitioners either refused or failed to send the devices along before the MDL commenced. One of the plaintiffs managed to recover the device and kept it in a plastic bag in a closet, but made no mention of this until she was deposed.

Judge Robert Miller of the District Court for the District of Northern Indiana decreed that the five plaintiffs who never recovered their devices could not be excluded from the MDL because those explants took place prior to the start of the MDL. Biomet’s attorneys argued spoliation as a cause for dismissal of these plaintiffs, but Miller expressed the view that these litigants could not be excluded because there was no demonstration of bad faith on their parts. As for the sixth plaintiff, her failure to handle the device appropriately seemed to have no effect on her eligibility for the MDL due to an absence of any indication that her failure to disclose her possession of the article was anything more than an oversight.

Courts are said to have considerable leeway in determining when spoliation sanctions should be applied, but defendants may be concerned that Miller’s determination could dilute the value of spoliation. There is also the lingering question of the circumstances in which a device maker is liable for devices that are made unavailable for examination because they are disposed of prior to the start of an MDL procedure.

Spoliation not mentioned, but …
The Fairness in Class Litigation Action Act of 2017, sponsored by Rep. Bob Goodlatte (R-Virginia) has made its way into the House and Senate Judiciary Committees. The bill states that among its purposes is to “diminish abuses in class action and mass tort litigation that are undermining the integrity” of the legal system.

While the bill does not seem to directly address spoliation, section 5 of the bill specifically calls out MDLs. This portion of the legislation would require that plaintiff’s counsel offer evidence in support of the claim of injury as well as “the alleged cause of that injury.” The filing of such information must take place within 45 days of the transfer of the legal action or be “directly filed in the proceedings.” Should that information not show up in the judge’s hands within the following 30 days, that plaintiff is excluded, and the bill states further that these deadlines “shall not be extended.” The text says little about what would constitute evidence in support of a claim of injury, however.

Another interesting feature of Goodlatte’s bill is that it limits attorney fees to 20 percent of the monies recovered, and any disputes about this provision would be handled by the judge who handled the pretrial proceedings. Whether this feature will tamp down some of the legal adventurism said to characterize MDLs is up for grabs, but corporate attorneys can’t help but cheer this feature (and others) of this legislation.

And despite the distractions posed by health care and tax reform, the presence of a GOP majority on both sides of Capitol Hill offers the most favorable conditions for tort reform of any kind than have been seen at any time in the past decade, particularly since a Republican holds the Oval Office for the first time in eight years.

The Evolving Healthcare Delivery Model and Potential Further Erosion of the Learned Intermediary Doctrine

Courtney A. Stevens, Esq. | Senior Attorney, Loss Control | Medmarc

Last month, some members of Medmarc’s Loss Control Department attended the DRI Drug and Medical Device Seminar in Chicago, Illinois. Among the many insightful presentations was one delivered by Randall L. Christian of Bowman and Brooke LLP and Marc Fishman, in-house counsel at Novo Nordisk Inc, titled The Future of Drug Warnings: Rems, Medication Guides, and the (Potential) Erosion of the Learned Intermediary Doctrine.

Without regurgitating the entire presentation here, especially in light of the fact that we have persuaded the speakers to present a similar version to the Medmarc audience via webinar, I will include a few salient points below.

  • The average time of a patient actually spends with a doctor per doctor visit is now seven minutes. In this context, is it still reasonable to believe that doctors will communicate all the appropriate risk information to patients? Will knowledge of the evolving doctor-patient relationship (to shorter and arguably more infrequent visits) be imputed to manufacturers, such that some courts might believe it unreasonable for manufacturers to expect that doctors will adequately deliver safety and risk information to patients?
  • Further vulnerability to the learned intermediary doctrine might be seen in the form of the numerous tools manufacturers, particularly of drugs, have at their disposal to communicate directly with patients—counseling tools, medication guides, and, of course, direct-to-consumer advertising. Manufacturers engage in direct communication with patients
  • Studies have found that patients better understand and retain warning information that included imagery. There is some speculation that, as such, the FDA may require certain warnings to include imagery and, even in the absence of a law of regulation, failure-to-warn claims might be successful on the theory that warnings were ineffective for their lack of imagery.

 

The bottom line is that the learned intermediary doctrine—a long-time, effective defense for makers of prescription products—is in play, and manufacturers, and it is reasonable to expect its change in light of the evolving healthcare model.

NJ Supreme Court Hears Significant Preemption Case

Beth S. Rose, Esq. | Sills Cummis & Gross P.C.

On April 11, 2016, the New Jersey Supreme Court heard oral argument on an issue of importance to manufacturers of generic drugs. The issue concerns whether failure to warn claims are preempted when there is a gap between the time the brand manufacturer changes its label and the time the generic manufacturer updates its label to match that of the brand.  Plaintiffs argued  that where there is a delay in the  generic manufacturers’ label update,  warnings claims are not preempted by the U.S. Supreme Court’s decision in Pliva v. Mensing. They maintained that in such a situation, it is not “impossible” for the generic manufacturers to update their labels to match those of the brand.  Defendants, on the other hand, argued that such claims are impliedly preempted by the U.S. Supreme Court’s decision in Buckman, the FDA’s exclusive enforcement authority, and other New Jersey case law, because the claims are based on an alleged violation of a federal requirement, namely the duty of sameness.

Although defendants’ reasoning  correctly flows from the FDCA and preemption jurisprudence, the Justices seemed extremely skeptical of the generics’ position. From the outset, the Court seemed concerned that if it ruled for the generics, then consumers would be left without a cause of action. Chief Justice Rabner’s first question presented a scenario where the brand manufacturer changed its label, and the generic waited two years to update its label to match the brand.  The Chief Justice asked whether a consumer who took a generic drug prior to the update and was injured had a remedy other than “calling the FDA.” The questions posed by other Justices suggested that they believed that plaintiffs could prove their warnings claims without referencing federal law, and that Buckman was distinguishable. They seemed predisposed to the approach of the 6th Circuit, which has accepted plaintiffs’ argument. The Justices also seemed interested in whether the FDCA or its regulations identified a specific time frame for generics to update their labels, and why FDA had not taken any enforcement action against generics that had not promptly updated them. They did not seem to fully appreciate that the label goes to the doctor (the learned intermediary) as opposed to the consumer. Also,  it seems highly unlikely that plaintiffs could prove such a claim without reference to federal law. Similarly, plaintiff’s so-called failure to warn claims do not fit within the New Jersey Product Liability Act and the corresponding jury charges. If the Court agrees with plaintiffs’ position, trials in such cases are likely to be complicated, unwieldy and contort New Jersey law.