Last year the Ninth Circuit, in a case called Siracusano v. Matrixx Initiatives, 585 F.3d 1167 (9th Cir. 2009), issued a really troubling decision, holding that reports of adverse product events – although not even the plaintiff claimed that they were statistically significant – were enough to get past a motion to dismiss in a securities action alleging that these reports should have been disclosed to investors.
We didn’t blog about it at the time because it wasn’t a drug or device (Matrixx makes Zicam, which is an OTC homeopathic remedy for the common cold) and it wasn’t a products case.  Siracusano was in the back of our minds, however, when we decided to put together our adverse event report cheat sheet, where we’ve collected cases standing for the proposition that such reports don’t prove anything in civil litigation.
Well, fast forward about a year.  The Supreme Court (thankfully) granted certiorari (that’s Latin for “appeal” (sort of), for you non-lawyers) in Siracusano last June.  At that point both we (that being Bexis and the securities litigation group at Dechert) and the Advanced Medical Technology Association, better known as AdvaMed, the world’s largest medical technology association, thought it was high time to get involved.
So AdvaMed retained us to file an amicus brief arguing that:  (1) adverse event reports are inherently unreliable, incomplete, biased (including being media-driven), and for several other reasons not valid evidence of causation; (2) because of the aforementioned unreliability, etc., it’s prudent for publicly traded companies not to disclose such reports as relevant to investors (as opposed to FDA disclosure, which is an entirely different matter) before their statistical significance is determined, and insignificant reports thus fail the scienter element of Rule 10b-5; and (3) bad things would happen to life science companies if Siracuso were affirmed – forced disclosure of hundreds of thousands of questionable reports, and consequent distortion of the information available to investors by a flood of statistically insignificant data.
Anyway, having helped write it, we think the Dechert amicus brief’s pretty darn good, and we invite anybody interested in either the statistical uses and misuses of adverse event reporting (especially in the medical device context) or in the securities law implications of forced disclosure of adverse event reports upon the life sciences industry to take a look.
AdvaMed wasn’t the only one to file, of course.  An important Supreme Court case (that being most of them) brings with it a raft of filings by interested parties, and Siracusano is no exception.  Here’s a link to the ABA’s site where all of the defense side briefs (the plaintiffs haven’t filed yet) are available (just go to “Matrixx Initiatives, Inc., v. Siracusano, Docket No. 09-1156” – its in alphabetical order).