Judge Says Device Makers Must Warn Hospitals

Device makers know all too well about the need to notify providers of the hazards associated with their devices, but a new case in the Pacific Northwest would expand that liability to hospitals, seemingly destroying the learned intermediary doctrine in the process.

Intuitive Surgical, maker of the groundbreaking da Vinci surgical robot, was on the losing end of a lawsuit in the Washington State Supreme Court recently, which declared that the device maker is liable for notifying hospitals about the risks attached to the device’s use. The case, Taylor v. Intuitive Surgical, Inc., involved the da Vinci’s use in prostate surgery, and the decision from a state circuit court hearing said the surgeon acknowledged that the patient, the late Fred Taylor, was overweight and thus not a good candidate for the procedure using the da Vinci.

Trial, appeals courts exonerate Intuitive

The treating physician, Scott Bildsten, was performing his first non-proctored procedure with the da Vinci and informed Taylor that he (Bildsten) lacked the experience needed to conduct the procedure on obese patients. The patient was in the operating room for 15 hours while Bildsten switched from the da Vinci to open prostatectomy, following which the patient was in intensive care for 20 days. Taylor died four years later in 2012.

The jury trial determined there was no liability for Intuitive despite that the plaintiff’s attorney recommended that the jury be instructed that the device maker had a duty to warn Harrison Medical Center, a decision with which the appeals court agreed. The state high court decreed, however, that the physician “is often not the product purchaser,” and thus state law mandates that device makers inform hospitals “about their dangerous medical devices,” a passage penned by Justice Susan Owen.

Owen determined that the trial court had erred in its failure to instruct the jury that the device maker was legally required to inform the hospital of the hazards associated with the da Vinci, and remanded the case to the trial court. Owen acknowledged, however, that Harrison Medical Center was in the practice of providing credentials on the da Vinci after only two proctored procedures while other establishments in the state required three or more proctored procedures prior to credentialing.

 

Nonetheless, Owen said the learned intermediary doctrine was not applicable because the Washington Product Liability Act (WPLA) “imposes a separate and distinct duty” on the device maker to inform the hospital of any risks. She cited language from the dissenting opinion in the appeals court case, said to state that while a physician is the gatekeeper between the manufacturer and the unwarned patient, the physician is not the gatekeeper between the patient and “the unwarned hospital” (italics hers).

Owen asserted further that a hospital’s duty to ensure a device is safe is separate from that of a physician despite that a preceding case had determined that a pharmacist does not have a duty separate that from a prescribing physician, a reference to the 1989 decision in McKee v. American Home Products., another case specific to the Evergreen State.

Lone dissenter in en banc decision

Owen’s decision was backed by five other justices who took part in the en banc hearing, but Justice Barbara Madsen dissented, stating that Intuitive was indeed liable for informing a hospital as to the hazards entailed in the da Vinci’s use. Madsen asserted, however, that the wife of the deceased “cannot invoke a duty owed to Harrison to recover damages.” She noted that several steps stood between the widow and the device maker, starting with the sale of the da Vinci to the hospital, Harrison’s credentialing of Bildsten, and Bildsten’s use of the device on the patient. Madsen stated further that the widow of the deceased had already obtained a settlement from Harrison, which would eliminate any further claims arising from Harrison’s credentialing of Bildsten.

Among those providing briefs to the court was the D.C.-based Medical Device Manufacturers Association, which might mean nothing more than that the association sees this as a critical issue in the state of Washington. The reader may find it interesting that this same court recently found that the WPLA also truncated federal preemption of state law, although this was in the context of aviation law (see Estate of Becker v. Avco Corp.).

One cannot rule out the possibility that other states might amend their statutes to reflect the elements of the WPLA that proved pivotal in the case against Intuitive – and in any event, some would argue there is no shortage of jurisprudential adventurousness – but the message here is at least that the state of Washington presents much more legally hazardous terrain than is perhaps widely appreciated.

Not-So-Good Manufacturing: GMPs and Alleged False Claims

The use of violations of good manufacturing practices as a pretext for False Claims Act prosecutions is not unprecedented, but it is not commonplace, either. Baxter Healthcare has agreed to pay a total of roughly $18.2 million dollars in connection with just such a legal pretext, but the precedent is much more important than the dollar value of this case.

The settlement agreement between Baxter and two government entities, the Department of Justice and the Department of Veterans Affairs, stipulates that Baxter will pay $2.16 million to settle the whistleblower suit, which alleged that the company violated current good manufacturing practices in the production of products such as Ringer’s lactate solution between January 2011 and December 2012. The agreement noted that the relator received roughly $430,000 for his troubles, a sum that may or may not make up for any future employment difficulties.

Baxter also had to hand over $16 million as part of a deferred prosecution agreement, but the Jan. 12 notice by the Department of Justice acknowledged that there were no adverse events reported in association with the purported mold found in a processing facility for the products in question.

To be sure, this is not the first instance in which a company had to face a legal action related to GMPs and relator claims. A previous episode of this sort arrived at the U.S. Court of Appeals for the Fourth Circuit, which ruled in February 2014 that allegations of failure to comply with the regulations did not suffice to support a claim of violation of the False Claims Act. Omnicare may have dodged a bullet in this instance, but there were no allegations that the company attempted to deceive the FDA, an allegation that fed the $500 million settlement between India’s Ranbaxy and the FDA in 2013.

Clearly Baxter has no intent to pursue the case further, and the company enjoys a market cap of nearly $27 billion, so the loss of $18 million might come across as a rounding error in the company’s financials. It is not clear whether this leveraging of GMPs to feed allegations under the False Claims Act is an aberration or the leading edge of a new trend. One consideration is the volume of warning letters the FDA issues in connection with drug and device manufacturing as a source of fodder for these qui tam suits, which the DoJ rarely turns down.

Another thing to consider is that the world of drug sterility and environmental monitoring may have changed after the 2008 episode involving tainted heparin from China. More recently, the pharmaceutical industry has a public relations problem stemming from recent pricing debacles, and the medical device industry has been dinged over the power morcellation and permanent-birth-control device sagas. Those in the life science industries have to recognize that they have little leeway in the court of public opinion, a fact which all too easily translates into no leeway at all in the court of law.

Inspection imbroglio spurs legislation

There is never a shortage of new bills floating around on Capitol Hill, but Sens. Johnny Isakson (R-Ga.) and Michael Bennett (D-Colo.) have introduced legislation that would force the FDA to finally live up to its purported risk-based approach to device inspections, a bill that seems destined to appear in the legislation for the next device user fee agreement.

Recall that the current user fee agreement, MDUFA III, expires at the end of September, hence the need for a new five-year handshake. The fourth iteration calls for just shy of $1 billion over the five-year term, quite a bit more than the $595 million agreed upon in MDUFA III.

The bill by Isakson and Bennett addresses grievances of some standing regarding FDA inspections of device manufacturing sites located in the U.S. Industry has for some time complained that the agency is far more likely to give sites located outside the U.S. a heads-up when an FDA filed investigator is on the way, but device makers have also claimed that FDAers are sometimes late for domestic inspections, and in some instances, don’t show up at all. Other issues include poor communication from the agency regarding the acceptability of corrections made by companies in response to inspectional findings, which if valid would help explain why the FDA’s warning letter close-out program has been an abject failure.

The overarching goal of the bill, however, is to force the agency to focus more on sites that have a sketchy compliance history and less on sites that have a clean quality systems record. Whether the drafting of this bill is a signal that Congress is confident that the user fee agreement can go forward despite the Trump administration’s moratorium on federal hiring is not clear.

Medtronic beats express warranty claim

Attorneys at Medtronic seem to have all the experience where PMA preemption cases are concerned, but Wildman v. Medtronic worked out well for the company, which has not always been the case. The plaintiff in this case, Ray Wildman, had a Medtronic neurstimulator implanted to deal with pain, and the unit’s battery quit after less than two years despite that the company’s website had claimed that those devices had an expected life of nine years.

The suit relied on the warranty implicit in the company’s website for the RestoreUltra neurostimulation unit, which states in part, “the result of extensive design and testing involved in manufacturing rechargeable neurostimulators give Medtronic the confidence that our device is reliable for 9 years.”

That statement is still on Medtronic’s website, so one imagines that the FDA is aware of the statement, and hence has no issue with it. From there, one has to assume that the statement is backed by some evidence, otherwise the agency would have forced Medtronic to pull the statement by now.

In the end, Judge David Ezra of the U.S. District Court for the Western District of Texas dismissed the case with prejudice, in part because Wildman’s suit would impose requirements that are “different from, or in addition to” the FDA-imposed requirements that were part of the PMA for this device. Chalk up one for PMA preemption.

FDA’s Interesting Off-Label Memo

 

The FDA recently posted a memorandum spelling out the agency’s views regarding off-label promotions, a document chock full of interesting observations. This discussion is now taking place in a somewhat different political backdrop, however, particularly in light of the dismissal of a high-ranking and well-known member of the Department of Justice. The picture in aggregate is highly fluid – which may or may not portend change – but which nonetheless is almost certainly unsettling to those at the FDA who prefer the status quo where off-label promotion is concerned.

When a solution is not a solution

The January 2017 FDA off-label memo offers the expected rationale for the agency’s current views on commercial speech, including that the requirement to conduct studies of a drug or device for a specific indication does a lot to provide assurance that the therapeutic in question will do more good than harm.

The memo takes a turn for the peculiar, however, when the FDA takes credit for things such as patent protection, which most would say redounds to the credit of the statute and the Patent and Trademark Office. Subsequently, the memo offers alternatives to the current state of affairs, such as a ban on off-label use of drugs and devices, and the application of a higher level of taxation on off-label use.

The problem with these and a couple of others of the FDA’s alternative commercial speech universes is that they are entirely outside the agency’s jurisdiction. For instance, it is quite well known that off-label use is within a physician’s discretion, and doctors are not regulated by the FDA. Not yet, anyway. As for tax policy, there’s no need to explain why this is outside the agency’s statutory authority.

There are several items of interest where context is concerned, not the least of which is that Robert Califf has resigned from the FDA commissioner’s chair, leaving the Trump administration with a very interesting job to fill. A number of names have been floated for that opening, including that of Scott Gottlieb, whose curriculum vitae includes a stint as one of the FDA’s deputy commissioners. Gottlieb has voiced reservations about the agency’s standards regarding off-label speech, but other candidates of record, including venture capitalist Balaji Srinivasan, are unknowns where the off-label discussion is concerned.

All in all, attorneys at the FDA have to assume the commercial speech question is likely to weigh against the agency in the months and years ahead, even if nothing in the way of legislation surfaces.

More than one new face at DoJ

One interesting bit of context here is the dismissal of Sally Quillian Yates, she of the famed Yates memo, which some believe comes up only a little short of the extortive tenor of the Thompson memo. President Trump gave Yates the axe for announcing that DoJ would not mount a legal defense of the administration’s executive order on immigration from six nations said to harbor terrorists. Whatever one believes about that executive order – and it should be noted that recent developments do not necessarily portend a revisitation of the memo that bears Yates’ name – her dismissal sends an unmistakable signal that employees of the federal government can press their luck only so far.

Clearly it’s too early to anticipate what will become of the off-label discussion, but this issue has occupied a tremendous amount of time and effort at the FDA, and these developments can’t help but embolden adversaries of the agency’s current stance on the commercial speech/First Amendment question. Change may or may not be in the offing, but it needn’t start with the executive branch of the federal government. It may come in the courts, and whomever the Trump administration appoints to the job of solicitor general may have some very interesting things to say, indeed, if the matter ever reaches the Supreme Court.

Personal Jurisdiction Pivotal Issue Again for Drug and Device Companies

Jordan Lipp, Esq. | Partner, Davis Graham & Stubbs LLP

While personal jurisdiction issues (i.e., where a company can get sued) may seem esoteric and dull, there are few issues that have larger ramifications for drug and device companies than personal jurisdiction.  Defending a lawsuit against a drug and device company in Philadelphia, Pennsylvania is completely different than defending a lawsuit against a drug and device company in Cheyenne, Wyoming.  Yesterday, the United States Supreme Court granted certiorari in a personal jurisdiction case coming from the California Supreme Court in a mass lawsuit against Bristol-Myers Squibb.  The United States Supreme Court review has the potential to clear up the murkiness around these issues, and it potentially could have a dramatic effect on reducing the locations where a drug or device company can get sued in any particular case.

As discussed more in an earlier blog post, the 4-3 decision by the California Supreme Court that will now be reviewed, addressed the issue of personal jurisdiction 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.  See Bristol-Myers Squibb Co. v. The Superior Court of San Francisco County, 377 P.3d 874 (Cal. 2016). 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.  On the issue of 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 stated that “although the company’s ongoing activities in California are substantial, they fall far short of establishing that it is at home in this state.”  This follows current law from the United States Supreme Court.

However, on the issue of specific jurisdiction (i.e., whether the case-linked conduct occurred in the forum), the California Supreme Court found that Bristol-Myers Squibb’s national marketing, promotion, and distribution of Plavix in California, coupled with its research and development facilities in California, created specific jurisdiction, even with respect to the out-of-state plaintiffs.  Although the majority opinion stated its decision did “not render California an all-purpose forum for filing suit against [the defendant] for any matter,” the dissent warned that the “the majority [decision] expands specific jurisdiction to the point that, for a large category of defendants, it becomes indistinguishable from general jurisdiction.”

The last two times the United States Supreme Court has waded into issues of specific jurisdiction in similar contexts – J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873 (2011) and Asahi Metal Indus. Co., Ltd. v. Superior Court of California, Solano Cty., 480 U.S. 102 (1987) – there was no majority decision, leaving many specific jurisdiction issues cloudy and open to debate.  Depending upon the United States Supreme Court’s ruling in the Bristol-Myers Squibb case, we may finally see clarity on issues of specific jurisdiction, which will help answer where a drug or device company can, or cannot, be sued.  This case will be closely watched, and depending upon the outcome, it could become one of the most important cases in recent memory for litigation involving drug and device companies.

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.

FDA Settles with Amarin in Off-Label Promotion Free Speech Lawsuit

Jordan Lipp, Esq. | Partner, Davis Graham & Stubb

As discussed more in an earlier post, Amarin Pharma sued the FDA in May 2015 asserting that under the First Amendment’s free speech protections, it could engage in truthful and non-misleading speech promoting the off-label use of its drug, Vascepa, for the treatment of patients with persistently high triglyceride levels.  On August 7, 2015, a federal judge in New York granted Amarin’s preliminary injunction in the case, and held that under the First Amendment’s free speech protections, the FDA could not bring a misbranding action against Amarin for Amarin’s off-label promotion.  As the Court stated:  “Where the speech at issue consists of truthful and non-misleading speech promoting the off-label use of an FDA-approved drug, such speech . . . cannot be the act upon which an action for misbranding is based.”

Yesterday, Amarin and the FDA settled this lawsuit.  The settlement largely mirrors the Court’s preliminary injunction order – with the FDA agreeing “to be bound by the Court’s conclusions that Amarin may engage in truthful and non-misleading speech promoting the off-label use of Vascepa®,” and Amarin agreeing that it “bears the responsibility, going forward, of assuring that its communications to doctors regarding off-label use of Vascepa® remain truthful and non-misleading.”  The settlement also sets forth a preclearance procedure between Amarin and the FDA on other future off-label promotion of Vascepa.

This settlement cements Amarin’s victory on its preliminary injunction.  The course of this lawsuit has provided a roadmap for drug and device manufacturers looking to promote their products off-label – in terms of how to raise such promotional plans with the courts to obtain court approval and FDA agreement on such off-label promotion.