FDA Considering Rule Change Affecting Suits Against Generic Drug Makers

Through the years, many of our posts here at Abnormal Use have focused on the Food and Drug Administration and, in particular, its treatment of generic and brand name drugs.  Despite the drugs’ apparent ability to be substituted for one another medically, the FDA treats generics and brand names very differently in terms of the manufacturers’ liability, and the ability to change or alter warning labels.

In broad terms, generic drug manufacturers have very little control over the labels that are placed on their products.  The labeling and warning requirements promulgated by the FDA with regard to a particular brand name drug are simply passed along to the generic form of the drug—in other words, generic drug manufacturers are required to provide the exact same warnings as the brand name drug.  The lack of control, however, is met with a corresponding insulation from liability—in the past, the Supreme Court has shielded generic drug manufacturers from lawsuits involving allegations of inadequate labeling.

All of that may be changing, thanks to the U.S. Supreme Court’s June 2013 ruling in the case of Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466, 186 L. Ed. 2d 607 (2013) [PDF].

Some background is necessary here.  Plaintiff Karen Bartlett suffered severe injuries allegedly caused by a generic anti-inflammatory drug, sulindac, manufactured by Mutual Pharmaceutical Co.  Bartlett, who took the drug for shoulder pain, suffered severe burns over much of her body and is now nearly blind.  The Court’s opinion is difficult to read in some places, outlining Bartlett’s medical ordeal in graphic detail.  Bartlett spent months in a medically induced coma, was tube-fed for a year and underwent a dozen eye surgeries. Rather than focusing on labeling requirements—a sure loser of an argument based on precedent—Bartlett alleged that the drug was designed defectively and was unreasonably dangerous.  On appeal, the Boston-based appeals court ruled in favor of the damages awarded to Ms. Bartlett, opining that the Mutual Pharmaceutical could have (and by implication, probably should have) decided not to sell sulindac at all. For its part, the Supreme Court did not see the case the same way, and reversed the award, saying the company was “not required to cease acting altogether in order to avoid liability.”  The high court ruled in favor of the manufacturer, causing a virtual uproar in the consumer drug world.  As cited in this Wall Street Journal online article, “Critics have argued that it makes little sense that a consumer’s right to sue depends upon whether he took a brand-name drug or a generic equivalent.”

Fast forward five months, and the FDA has taken note of the uproar.  It recently proposed to grant (or burden) the generic drug manufacturers with the same ability to change their labels as brand name manufacturers, with the FDA ostensibly requiring the same rigorous review process as applies to brand name drugs.  Quoting The Wall Street Journal law blog’s analysis:

If adopted, the new regulation would remove a legal distinction that prompted the Supreme Court to shield generic drug makers from product-liability lawsuits, even while allowing such claims against manufacturers of brand-name drugs.

The implication being, of course, that it would open up generic drug makers to liability.  As is expected with any major change to regulatory policy, reaction has been mixed:

Public Citizen, which had petitioned for the FDA rule change, praised the move Friday, saying it would “provide added protection to the tens of millions of people who regularly use generic drugs.”  The Generic Pharmaceutical Association reacted cautiously, saying it is concerned that multiple labels on the same drug “could drive up costs…and should be approached very carefully.”

This is a development to be watched carefully.  Depending on how the FDA amends its rules, a flood of litigation could be building right behind the change.  It might also mean the demise of some generic drug manufacturers who don’t wish to be in the lawsuit business.  It’s going to be an interesting season at the FDA, for sure.

Monster Beverage Corp. May Have Monster Litigation Problems

Monster Beverage Corp and its “Monster Energy” drinks have come under a lot of heat in recent months.  The FDA recently confirmed that it is investigating reports of five deaths and a heart attack that were possibly linked to consumption of Monster Energy.  In September, two U.S. senators sent a letter to the FDA asking it to investigate “energy drinks” and their effects on adolescents.  Now, the parents of a Maryland teenager who died after allegedly drinking two cans of Monster Energy in a 24-hour period are suing Monster.

Monster Energy is a highly caffeinated drink.  Energy drinks like it are the fastest growing segment of the soft drink market, with sales rapidly increasing over the last year.  Other brands of energy drinks include Red Bull, AMP, and Rockstar.  But Monster is clearly the market leader. Now the billion dollar question is whether Monster Energy is dangerous.  The parents of 14-year old Anais Fournier certainly believe the drinks are unreasonably so.  Their lawsuit alleges that in November of 2011 Anais went into “cardiac arrhythmia due to caffeine toxicity” after two drinking two 24-ounce cans of Monster Energy on consecutive days.  Apparently, the high caffeine level of the drink complicated an existing heart valve condition in the teen.  She was taken to the hospital but died six days later.

The lawsuit contains two main allegations.  The first is a defective design claim alleging that the drinks just contain too much caffeine.  I’m not sure this claim will fly.  The complaint alleges that two cans of Monster Energy contain 480 mg of caffeine and notes that this is the equivalent of 14 cans of Coca-Cola.  While this is true, it is somewhat misleading.  Coca-Cola is actually relatively low in caffeine in comparison to coffee or tea.  A single venti (20oz) cup of regular coffee from Starbucks contains 415mg of caffeine.  As such, I’m not sure you could say that a 24oz can of Monster Energy with 240mg of caffeine poses an unreasonable risk.

The second allegation is a failure to warn claim.  Basically, the plaintiffs claim that Monster should have known its drinks contained dangerous levels of caffeine and placed warnings on the cans.  This claim seems a little more viable at first glance.  However, the cans already contain the following warning: “Limit 3 cans per day.  Not recommended for children, pregnant women, or people sensitive to caffeine.”

It is unclear, however, whether this warning was on the cans in November of 2011 when the plaintiffs’ daughter consumed the Monster Energy.

Regardless of how this plays out, the caffeine scare may have already taken its toll on Monster.  Monster’s stock hit a high of $79 per share in June, but has recently plummeted to around $45 per share.

A Very Brief Primer on the FDASIA

On July 9, the Food and Drug Administration Safety and Innovation Act (FDASIA) was signed into law by President Obama.  Thanks to the FDA Law Blog for the correct pronunciation of the acronym–”fuh-day-zha.”  This law focuses on several goals.

Under FDASIA, the FDA can collect “user fees” in order “to fund reviews of innovator drugs, medical devices, generic drugs and biosimilar biologics. It also reauthorizes two programs that encourage pediatric drug development.”  Other provisions of the FDASIA aim to improve pharmaceutical supply chains, change approval and regulation processes, and provide incentives for the development of drugs to treat rare diseases.

Part of the effort to combat drug shortages includes provisions requiring manufacturers to notify the government of any problems or issues that may lead to shortages down the line; in the past, such reports were completely voluntary by the manufacturer.  Manufacturers who fail to report under the law are subject to sanctions.  More about the FDASIA’s provisions with regard to drug shortages can be found here.

Other sections of the law incentivize manufacturers to research and develop products for antibiotic-resistant infections, expedite the approval process for certain products, and regulate “medical gases.”

If you’re up for some light reading, the FDA Law Blog provides a link to a 75-page “summary” of all 11 titles of the law by the FDA powerhouse firm Hyman, Phelps & McNamara, which can also be found here.  Or, if you think that a summary just isn’t enough to satisfy your curiosity, you can read the law itself here.

When a $158 million settlement is a “Victory”

On Thursday, January 19, mega-company Johnson & Johnson and the State of Texas reached a settlement for the bargain price of $158 million in a Medicaid fraud lawsuit.  The allegations?  That J&J committed Medicaid fraud by engaging in illegal marketing activities and providing kickbacks to boost sales of the anti-psychotic drug Risperdal, used primarily to treat schizophrenia and bipolar disorders.  The suit also alleged that J&J told doctors that the drug could be used to treat children, for which it did not have FDA approval.  Oops.

And why was $158 million a bargain?  Well, consider what has happened to the company in other states that have also sued J&J on similar theories.  In Louisiana, the Court ordered the company to pay $258 million; in South Carolina, the bill was a cool $327 million.

As reported by the Washington Post, then, $158 million doesn’t look so bad:

“For Johnson & Johnson, it’s a mighty easy result,” said Eric Gordon, a clinical professor at the University of Michigan’s Ross School of Business. “The legal team at Johnson & Johnson are doing high fives.”

Indeed.

Rewriting David and Goliath: Plaintiffs’ attorneys get payoff in Vioxx litigation

On August 9, 2011, the Eastern District of Louisiana approved the distribution of attorneys’ fees following the global settlement of litigation involving Merck’s troubled drug Vioxx in In re Vioxx Product Liability Litigation, — F.3d — , No. 2:05-MD-01657, 2011 WL 3563004 (E.D. La. Aug. 9, 2011) [PDF].    Developed and marketed to treat arthritis, menstual pain and migraine headaches, the drug was approved for sale by the Federal Drug Administration on May 20, 1999.  Merck pulled the drug off the market on September 20, 2004, after a clinical trial found that the drug increased the risk of cardiac incidents like stroke and heart attacks.

As expected, thousands of individual cases and multiple class actions filed against Merck in the aftermath of the recall.  Eventually, those cases filed in federal court were consolidated in an MDL in the Eastern District of Louisiana.  It was estimated that more than 50,000 claims were filed against Merck after 20 million patients took the medication.  After consolidated discovery, several trials commenced before the parties started talking about a global settlement.  Those talks were successful, and a Settlement Agreement was entered.   See Settlement Agreement, In re Vioxx Prods. Liab. Litig., MDL 1657 (E.D.La. Nov. 9, 2007), available at http://www.browngreer.com/vioxxsettlement.

The Settlement Agreement gave people the ability to opt-in to resolve their pending or tolled cases against Merck, and the total amount set aside for the payment of claims was $4.85 billion.  With a “b.”  Apparently, according to the August 9 order, the settlements went smoothly from a logistical standpoint:

The Settlement Program proceeded at a very rapid rate and Merck made additional payments in order to ensure that the claimants would receive funds in a timely fashion. . . . [I]n only 31 months, the parties to this MDL case were able to reach a global settlement and distribute Four Billion, Three Hundred and Fifty-three Million, One Hundred Fifty-two Thousand and Sixty-four Dollars ($4,353,152,064) to 32,886 claimants, out of a pool of 49,893 eligible and enrolled claimants. This efficiency is unprecedented in mass tort settlements of this size. It was due in large part to the ability, industry, and professionalism of the attorneys for both sides, the plan administrators, the lien administrators, the pro se curator, and the special masters.

With the payments to the claimants completed, it was time to pay the lawyers who had displayed such commendable “ability, industry, and professionalism.”  A Fee Allocation Committee was convened, and they had their work cut out for them.  The court quoted a prior pretrial order regarding reimbursement for expenses:
“[A]ny attorney wishing to have their time considered for an allocation of any common benefit award” was directed to submit a three-page written affidavit to the FAC articulating their contribution, with emphasis on factors including “substantial contribution to the outcome of the litigation,” quality of work, “consistency quantum, duration, and intensity of … commitment to the litigation,” “level of partner participation,” committee membership and leadership positions, the “jurisdiction in which non-MDL common benefit work occurred,” “[a]ctivities surrounding trials of individual Vioxx claimants, including bellwether trials and non-MDL trials that impacted proceedings on a common benefit level,” participation in ongoing work for the common benefit, involvement in Vioxx litigation prior to withdrawal of Vioxx from the market or the MDL, contribution to funding of the litigation, commitment to the litigation after adverse verdicts, and any other relevant factors.
Over one hundred firms or attorneys submitted almost twenty-four hundred pages of affidavits and supporting documentation, all of which were entered into the record.  Although they requested 8 percent, the Court approved a compensation of 6.5 percent of the final settlement for the plaintiffs’ attorneys, a total of $315,250,000.00.  Oh, and just a side note: that was in addition to their fees.  In the end, 108 law firms were granted monetary awards from the common benefit fund.
There is an old saying: you have to have money to make money.  Usually, it’s used in the conext of investing.  But this case demonstrates that the same is true in litigation.  Just seeing a few of the reimbursement amounts –$500,000 to one law firm, $4 million to another — proves that in many cases, only the large plaintiffs’ firms who could front those kinds of expenses could take these cases, which were ultimately quite profitable once the underlying settlements  and attorneys’ fees were approved.  So the next time a plaintiff’s attorney plays the David and Goliath game at trial against your firm, remember this case.  Sometimes,you have to be Goliath, too.

Beware: Packaging Defect May Lead to Unwanted Pregnancy

Last week, Qualitest Pharmaceuticals announced that it was recalling birth control pills due to a packaging error which left women at risk for unplanned pregnancies.  Qualitest discovered that select blisters were rotated 180 degrees within the packaging. As a result, the weekly tablet orientation was reversed and the daily orientation was incorrect.  According to the report, no immediate health risks were expected (except the possibility of pregnancy, of course).  This recall poses a few intriguing issues.

First, it is rare to see a drug recalled due to its packaging under these circumstances.  Drug recalls themselves are not uncommon.  Certainly, we can all remember at least one drug pulled from the shelves after the discovery of adverse side effects.  However, recalling a drug due to a packaging error is a completely different story.  If a product is recalled due to a “packaging error,” we might expect it to be the result of mislabeling or an injury-causing plastic bottle.  Seldom, does a packaging error actually affect the performance of the drug itself.

The fact that the mere 180 degree rotation of a product’s packaging can render a product completely ineffective seems curious.  If Crayola accidentally packaged its product in reverse-rainbow order, the crayons would not cease to become coloring utensils.  One would think that if a company is capable of designing a product that can alter reproductive hormones and prevent unwanted pregnancies, it could also design a package not affected by a reverse rotation.

Second, what legal liability may Qualitest face as a result of this error?  We anticipate plaintiffs who have experienced an unwanted pregnancy will expect to hold Qualitest accountable.  They may elect to assert a claim for wrongful pregnancy; however, this cause of action is typically filed against medical providers for failing to perform a sterilization procedure correctly.  If a medical provider can be held liable for failing to perform a vasectomy, so too might a pharmaceutical company for negligently packaging its birth control pills.  If the plaintiffs are unable to assert a wrongful pregnancy cause of action, it is unlikely their “unwanted children” would have a cause of action for wrongful life.  Only a small number of states permit wrongful life actions, and those that do typically require the child to be born with some birth defect.

Third, even if plaintiffs have a cause of action against Qualitest, there most certainly would be some issues of comparative negligence.  While the birth control pills may have been rotated and disoriented, they are also color-coded – the first three weeks of hormone-producing pills are one color, while the last week of placebo pills is another.  By taking these pills on a monthly basis, plaintiffs would undoubtedly have noticed this distinction.

What should we learn from all of this?  Two things: 1) If you are a consumer of birth control pills, check your packaging to make sure you are staying on schedule; and 2) If you are a manufacturer of birth control pills, try using circular packaging.

The Fight Over Avastin

On June 29, 2011, a panel of the Food and Drug Administration rejected the drug Avastin for use in the treatment of end-stage breast cancer.  Manufactured by Genentech, a subsidiary of Roche, the drug has been approved for the treatment of other types of cancer, but as recently reported by NBC Nightly News, the panel believed that the drug is not effective, and the side effects too serious, for the treatment of breast cancer.  A final decision will come from the FDA in a few months.

As can be imagined, this action has brought a firestorm of criticism of the FDA.  Because the drug will still be on the market, it will be possible, perhaps, for doctors to prescribe the drug “off-label” for breast cancer, but of course, insurance companies won’t pay for it if it’s not approved for the specific disease for which it is prescribed.

But, as FiercePharma reports, it appears that Avastin will not be dropped from Medicare coverage, no matter what the FDA decides down the road, and the decision could have grave consequences for the FDA down the road:

Indeed, House Republicans are promising to make Avastin an issue during next week’s hearings on the reauthorization of FDA’s user-fee funding provisions. House Energy and Commerce Committee Chairman Fred Upton says he has “grave” concerns about FDA’s review of the data on Avastin, the Wall Street Journal reports, and aides are saying that either he or another member will raise those concerns at Thursday’s hearing.

Read the referenced Wall Street Journal article here.  Stay tuned.  If indeed the full FDA precludes usage of Avastin for the treatment of breast cancer, it will present many questions for the manufacturer, which will undoubtedly know that doctors may still be prescribing it for use as a treatment for the disease.  Of course, manufacturers of all sorts of drugs know that their medication is prescribed off-label, but this will be a much higher profile case than most.  Will that knowledge hurt the manufacturer if any defects are alleged?  We will have to wait and see.  Preemption is always a good argument in drug cases, but what preemption would there be if the FDA did not approve the drug for use for this particular disease?

Another Tomato Farm Takes on FDA, Claims $11 Million in Damages

We recently reported here that a South Carolina family-owned tomato farm had sued the United States Food and Drug Administration (FDA) in South Carolina federal court in Beaufort, alleging that the agency was negligent in its issuing of a 2008 nationwide tomato recall.  Seaside Farm, Inc. v. United States, C.A. No. 9:11-cv-1199-CWH (D.S.C. May 2011).  The FDA issued that recall over fears that tomatoes were the source of salmonella contamination, though, ultimately, the outbreak was traced to a source other than tomatoes.  Well, another tomato farm has since joined in filing suit.

Law360.com reports that Williams Farms Produce Sales, Inc., which grows more than 500 acres of tomatoes in South Carolina and Florida every year, filed suit alleging that it lost $11 million as a result of the recall that later proved to be unnecessary.  The latest suit, which was filed less than one month after the Seaside Farm’s complaint, was filed in federal court in Charleston.  Williams Farms Produce Sales, Inc. v. United States, C.A. No. 2:2011-cv-1399 (D.S.C. June 2011).  Lexology.com reports hat the latest complaint includes causes of action of negligence, defamation, slander of title, product disparagement, unconstitutional taking, and violation of unfair trade practices law, for which the tomato grower seeks actual damages in excess of $11 million, special damages, compensatory damages, treble damages, attorneys’ fees, and costs.

These two lawsuits could be the firsts of many, and they certainly demonstrate that the amount of potential damages alleged against the FDA could be staggering.  MiamiHerald.com and FloridaFarmers.org have reported that Florida farmers estimated they lost $60 million as a result of the recall, and that national numbers could be $140 million or more.  They also report that previous attempts in 2008 to acquire voluntary compensation from the government to offset the losses failed, and as such, litigation was almost certain to follow.

South Carolina Tomato Farmer Sues Feds Over Recall

A South Carolina family-owned tomato farm recently sued the United States Food and Drug Administration under the Federal Tort Claims Act  seeking to recoup damages it suffered from the 2008 nationwide tomato recall over fears of salmonella contamination.  Seaside Farm, Inc. of St. Helena Island filed suit in federal court in the U.S. District Court for the District of South Carolina.   The complaint alleges causes of action of negligence, violation of the takings clause, violations of the South Carolina Unfair Trade Practices Act, and defamation.  Seaside Farm, Inc. v. United States, C.A. No. 9:11-cv-1199-CWH (D.S.C. May 2011).

According to the complaint, Seaside Farm cooperated with and and assisted in all audits and inspections of its operation prior to the start of the tomato season in 2008 and passed all inspections.  Then, in June of 2008, “at the precise time when South Carolina tomatoes are coming to market, the FDA announced a national recall of all tomatoes in the U.S.” (See South Carolina news coverage of the 2008 recall here ).  The complaint goes on to say that the FDA “improperly assumed” that tomatoes were the source of the curent salmonella outbreak, though following the recall, the FDA ultimately conceded that tomatoes were not the source the salmonella contamination.  At that point, however, Seaside Farm says the damage was done.  It seeks compensation for loss of its property, in the form of its 2008 tomato crop, as well as other general and special damages.

The FDA Law Blog reports that though the FDA issued a nationwide warning in June of 2008 for consumers to refrain from eating tomatoes, later, certain types of peppers were identified as the likely culprit of the salmonella outbreak.  The FDA thus lifted its tomato ban, but not before significant damage was done.  There was significant fallout, with some predicting that litigation likely would most certainly ensue.   According to FDA Law Blog, statutory law directs the Government Accountability Office to submit a report to Congress that reviews “new or existing mechanisms available to compensate persons for general and specific recall-related costs when a recall is subsequently determined by the relevant agency to have been an error,” and that “considers models for farmer restitution implemented in other nations in cases of erroneous recalls.”  Such provisions may fall short of the expectations of small businesses like Seaside Farm, who took the brunt of the error.

Manufacturer of Rub Cream Wins Summary Judgment on Allegations of Diabetic Foot Injuries

Earlier this month, the U.S. District Court for the Northern District of Georgia considered the case of Kersey v. Dolgencorp LLC, No. 1:09-CV-898-RWS, 2011 WL 1670886 (N.D. Ga. May 3, 2011). The case involved a tube of Dollar General Maximum Strength Muscle Rub Cream, which was manufactured by defendant Faria and sold under the Dollar General brand. The Plaintiff brought suit against both Dollar General and Faria, alleging that the rub cream caused her to develop multiple diabetic ulcers secondary to chemical burns. Ms. Kersey had been diagnosed with diabetes in 1994, which caused her to have severe diabetic neuropathy in her feet. She had been using the rub cream since 2006 or 2007; these alleged injuries occurred in 2008.

The lawsuit alleged four causes of action against Faria and Dollar General, including (1) negligence, (2) strict liability, (3) breach of express warranty, and (4) breach of implied warranty. Both defendants moved for summary judgment. Plaintiff abandoned all of her claims against Dollar General, as well as the breach of warranty claims against Faria prior to the hearing on Defendants’ motion and, therefore, the court granted the Defendants’ summary judgment motions as to those claims.

The court discussed three claims alleged by Plaintiff in turn: design defect, manufacturing defect, and failure to warn. The court granted Faria’s summary judgment motion as to the design defect. First, it noted that Plaintiff had not even discussed the rub cream’s design, and because she had not presented any evidence of the product’s inherent risks, nor presented an alternative design. The court also noted that the rub cream had been tested by the Food and Drug Administration and determined its composition to be safe and effective.

The court also granted Faria’s motion for summary judgment based on the theory of the manufacturing defect. Plaintiff had not even had the product tested to back up any allegation she may have had that the particular tube of the rub cream was stronger or weaker than the standard formula. No genuine issue of material fact there.

Finally, the court considered the failure to warn claim. The warnings on the box containing the rub cream read as follows:

— For external use only.
— Use only as directed.
— Keep out of reach of children to avoid accidental poisoning.
— Discontinue use if excessive irritation o[f] the skin develops.
— Do not bandage tightly, apply to wounds or damaged skin or use with a
heating pad.
— If condition worsens, of if symptoms persist for more than 7 days or
clear-up and occur again within a few days, discontinue use of this product and
consult a doctor.
— If swallowed, get medical help or contact a Poison Control Center right
away.

The court made a number of findings before granting Faria’s motion for summary judgment on this theory. First, Plaintiff’s doctors stated only that Faria should have known that the rub cream would have been absorbed by the skin, not that this phenomenon would be injurious to diabetics. Second, this was the very first complaint that Faria had ever received about the product  after it had manufactured more than 8 million tubes of the cream. Finally, the court noted that Plaintiff had developed these injuries after using the cream and then putting on socks and shoes, which the court found to violate the warning on the box that advises against bandaging skin after using the product.

The final cautionary note can be found in the case’s only footnote, where the Court indicated without even being asked that Plaintiff’s case had “a strong proximate causation problem.” Indeed, Plaintiff had suffered diabetic-related foot injuries before and after this alleged incident, and had been using the product without incident for years before suffering these particular injuries. Plaintiff’s doctor also testified that he could not testify that, to a reasonable degree of medical certainty, that the complained-of injuries were caused by the rub cream at all.