Earlier this month we featured a guest post on a potentially game-changing forum non conviens decision by the Illinois Supreme Court, Fennell v. Illinois Central Railroad, ___ N.E.2d ___, 2012 WL 6725822 (Ill. Dec. 28, 2012). While Fennell was an asbestos case, our reading of the case suggested that it would be equally applicable
Here’s another “guest” post (at this point, only in the sense that we have to load it) from our semi-regular contributor, Melissa Wojtylak of Reed Smith. She gets all the credit for her work.
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The Fourth Circuit is the latest court to reject a claim that prescribing a drug for off label use gives rise to False Claims Act liability. As regular readers of the blog know, the False Claims Act imposes liability for knowingly presenting a false or fraudulent claim for payment to the government. See 31 U.S.C. § 3729 (a)(1)(A). And as regular readers also know, in recent years, enterprising relators (who can often also be described as “disgruntled former employees of the defendant”) have attempted to cash in under the FCA by bringing qui tam actions against pharmaceutical companies, claiming that the company purposely marketed its drugs for off-label uses. While various explanations and theories are advanced by these relators, the underlying premise of these actions is essentially the flawed proposition that the mere existence of off label use of a drug is, in and of itself, a bad thing. Which, or course, it isn’t. As we’ve discussed on the blog in the past, several courts have seen the flaw in this logic and sent relators packing.
In U.S. ex rel. Nathan v. Takeda Pharmaceuticals North America, Inc., 2013 U.S. App. LEXIS 765 (4th Cir. Jan. 11, 2013), the Fourth Circuit affirmed a district court’s dismissal of the relator-plaintiff’s third amended complaint on the grounds that it did not plausibly allege that any false claims had ever been presented to the government for payment, let alone that any conduct on the defendant’s part – in particular, an alleged scheme of promoting drugs for off-label uses − had caused those phantom claims to be presented. While the products liability lawyer in us in drawn to the latter part of that statement and really wanted to see the Fourth Circuit address it, the court didn’t, as it held that the relator couldn’t even get out of the gate on the first part – that is, the need to show that false claims for payment were in fact made to government programs such as Medicaid.
The court began its analysis by noting that the relator’s complaint was governed by Rule 9(b), which sets out the minimum standard for pleading an actionable (i.e., false) representation under the FCA. This relator, faced with a pesky absence of specifics about things such as the dates on which reimbursement claims were submitted to the government and who submitted them, argued that Rule 9(b)’s standard could be met if the complaint pled acts sufficient to show a scheme by the defendant to promote the drug for off label use. Id. at *11-14. Once that was done, relator argued, the court could plausibly find that false claims must have been presented as a result of this scheme. Id. Well, no, the court responded. Just because the existence of such a scheme could have led to presentation of false claims, it need not necessarily have done so, and therefore the relator was still required to plead some facts that showed that false claims actually were presented. Id. at *14. The court rejected cases cited by the relator in which other courts had relaxed the standard, while at the same time acknowledging that without such relaxation, some relators would face a tough road. In essence, the court held that the rules are the rules, for better or for worse, and the relator’s complaint would have to be judged by them.Continue Reading Off-Label Use and the False Claims Act – Another Win for Common Sense
This post is by the Reed Smith part of the blog only. The Decherts are too involved in this litigation to comment publicly.
There aren’t many research-oriented pharmaceutical companies based in Alabama, and after last week’s execrable decision in Wyeth, Inc. v. Weeks, ___ So.3d___, 2013 WL 135753, slip op. (Ala. Jan. 11, 2013), that’s not likely to change any time soon. We don’t know why that started; Huntsville, at least, has a distinguished scientific background (and there’s a statue of a Vulcan in Birmingham – wait a minute, the ears don’t match Spock’s), but it’s certainly true now. Unfortunately it appears that, instead of (or perhaps in addition to, given the recent election results) the Ten Commandments, there’s another commandment that the Alabama Supreme Court is following: Thou Shalt (if you’re an Alabamian) Recover From An Out-Of-State Drug Company.
While the Alabama Supreme Court certainly has the power to abandon the notion of manufacturer liability for defects in its products (unlike a federal court sitting in diversity), having the power to do something doesn’t make it right. And if there’s one thing that’s not right, it’s having the liability of a defendant non-manufacturer turn on what its competitors did (or didn’t do). And if there’s another thing that’s not right, it’s imposing liability on a product manufacturer that didn’t make a cent (and probably was driven out of the market by) from the product that actually caused the injury in question.
Nor is it very likely that this novel theory of “fraud/misrepresentation” liability can be limited to prescription drugs, whatever its intended scope. There are lots of situations in which products bear similar warnings.
Sometimes, as with prescription drugs, such similarity is mandated by the government (cars, for example, or chemicals); sometimes similarity is simply a function of similar products having similar risks, and thus requiring similar warnings. One such example could be asbestos. There were lots of different asbestos products, and the same kinds of asbestos products do (or, at least, plaintiffs allege they do) have similar risks. We have to think that asbestos plaintiffs are going to have a field day with Weeks – more, perhaps, than even generic plaintiffs, since the learned intermediary rule still applies to prescription drug cases.
Anyway, we could go through each of these policy considerations at length, but we’re not going to. We already did that in connection with the original decision in Conte v. Wyeth, 168 Cal. App. 4th 89 (Cal. Ct. App. 2008). So we’ll rely on our discussions there:
First, this kind of liability is contrary to the fundamental legal tenet that manufacturers’ are supposed to be liable because they made money putting the injurious product on the market:
Well, [branded liability] is an end run around the heart of modern product liability, which was created . . . some fifty years ago. [Courts] recognized a core principle of social responsibility that justified what was then a new form of liability: The purpose of this [product] liability is to ensure that the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market. In other words, because manufacturers profit from the sale of their products, it is appropriate for them to answer for injuries caused by defects in those products. Time after time, . . . liability for injuries caused by allegedly defective products has been justified by reference to this paramount policy.
DDLaw, Closing The Arguments On Conte (1/22/2009) (citations and quotation marks omitted).Continue Reading Weeks Reasoning – No Sweet Home In Alabama For Research Pharma
We (well, Bexis) doesn’t know all that much about Arkansas. He’s only been there once – if driving through without stopping on I-55 to Memphis many years ago counts. Even his massive (excessive?) million-plus word Harry Potter fanfic had only one Arkansas reference in it (about James Potter once being the lead singer for a Hogwarts band called “Black Oak Azkaban”). Bexis did, however, vote for Bill Clinton twice (and would happily have done so in every election since – peace, prosperity, and budget surpluses look pretty good in retrospect).
But Razorback-related ignorance didn’t stop Bexis from purporting to state Arkansas law recently in our 50-state survey of hospital strict liability. That post stated:
Arkansas
The Arkansas Supreme Court avoided the issue in Adams v. Arthur, 969 S.W.2d 598, 614 (Ark. 1998) (“we do not decide whether a hospital . . . may be strictly liable as a supplier”). The holding in Adams – that the strict liability claims were barred by the statute of limitations applicable to malpractice claims – is suggestive that no separate cause of action for strict liability exists, but that’s not the ruling. There’s also mention of a holding rejecting hospital strict liability in Kirkendall v. Harbor Insurance Co., 698 F. Supp. 768, 770 (W.D. Ark. 1988), but it’s in a procedural history discussion. If somebody has access to the order in Kirkendall, please send it to us.
That turned out well (no, nobody sent the missing Kirkendall order, but that hardly matters anymore). Apparently, Bexis missed the crucial case, at least according to some recent opinions that we’ve learned about on this topic. See Wages v. Johnson Regional Medical Center, ___ F. Supp.2d ___, 2013 WL 120888 (W.D. Ark. Jan. 9, 2013); Shepherd v. Baptist Health, ___ F. Supp.2d ___, 2012 WL 6811076 (E.D. Ark. Nov. 30, 2012); Gunn v. St. Vincent Infirmary Medical Center, 2012 WL 6811786, *1 (E.D. Ark. Nov. 29, 2012).Continue Reading On Speaking Too Soon
It seems like litigation over TNF inhibitors (used to treat auto-immune conditions) consistently presents extremely interesting legal issues. After all, it was a TNF inhibitor (Remicaid) case that produced our #1 2012 decision, Centocor, Inc. v. Hamilton, 372 S.W.3d 140 (Tex. 2012). Another TNF inhibitor, Humira, also produced a couple of very bloggable recent opinions.
Now we’ve found another one, DiBartolo v. Abbott Laboratories, 2012 WL 6681704 (S.D.N.Y. Dec. 21, 2012). While not complete a win as the previous three, DiBartolo did get the big things right. DiBartolo presents the standard medical profile of TNF inhibitor litigation. Plaintiff is prescribed a TNF inhibitor to treat an auto-immune disease (here, severe psoriasis) and is later diagnosed with a form of cancer (here, non-melanoma skin cancer – on the tongue). That’s because “TNF” stands for “tumor necrosis factor” – meaning a substance that kills (necrosis) tumors. If you “inhibit” that (which also reduces the inflammation characteristic of autoimmunity), you inhibit something that the body uses to fight cancer. Do that, and the risk of cancer goes up.
If even we can explain the science in a couple of sentences, then you can bet that the risk is well-known and warned about. DiBartolo, 2012 WL 6681704, at *2 (detailing extensive “malignancy” warnings – specifically including non-melanoma skin cancer). Indeed, with respect to psoriasis, the FDA even imposed a requirement that the defendant manufacturer “publish a Medication Guide to inform patients directly of Humira’s risks.” Id. at *3. This booklet also warned specifically about non-melanoma skin cancer. Id.
However, this particular plaintiff, who had “struggled with psoriasis periodically throughout her life,” only took Humira after trying several other therapies – including something called “PUVA” (which involves UV light). As anybody who’s ever had a sunburn knows, UV exposure can kill skin cells (for those fortunate enough to have avoided the annoying “heartbreak of psoriasis” commercials of yesteryear, it’s a skin disease). DiBartolo, 2012 WL 6681704, at *1.
Despite both physician- and patient-directed warnings about the precise type of cancer the plaintiff suffered, plaintiff sued anyway. New York law applied in DiBartolo. Id. at *5. The defendant moved to dismiss, hoping to blow the entire complaint right out of the box. Eight theories of liability were at issue: negligent and strict liability variants of warning, design and misrepresentation claims (3 x 2 = 6), and express and implied warranty. Id. at *6.Continue Reading Two Out Of Three (Or Thereabouts) Ain’t Bad
We just did. Not only did we suffer through Stengel yesterday, but today we received Weeks – that is Wyeth, Inc. v. Weeks, No. 1101397, slip op. (Ala. Jan. 11, 2013). Alabama just recognized branded liability in a generic case – for fraud not AMELD, and assuming detrimental reliance by the physician. The key
However it’s our case, so the Reed Smith side can’t comment on it … period. Maybe the Dechert side will. All we can do at this time is provide our readers with a link to the opinion.