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.