The recent decision of the Hawai’i Supreme Court in State ex rel. Shikada v. Bristol-Myers Squibb Co., ___ P.3d ___, 2023 WL 2519857 (Haw. March 15, 2023), isn’t all bad by any means – but it’s bad enough, and it carries with it the prospect of liability based on a virtually limitless number of individualized genetic traits, so you can bet we’re not very happy after reading it.
You’d be right.
Shikada’s holding that the underlying consumer protection claim – predicated on the relative ineffectiveness of an approved prescription drug in certain racial groups – is the first appellate recognition that we know of any pharmacogenomically based tort(like) claim raising a state-law duty to warn of the impact of genetic variations. We’ve discussed what little law existed back in 2015 in our initial post on pharmacogenomics and product liability. Even earlier we wrote a 2011 post on Mills v. Bristol-Myers Squibb Co., 2011 WL 4708850 (D. Ariz. Oct. 7, 2011), the first case we had run across in which the plaintiff made a claim (without any scientific basis) for a pharmacogenomically-based risks.
Our basic position on plaintiffs using pharmacogenomics as a sword (as opposed to defendants using it as a shield to refute causation) has always been that, unless and until the FDA requires drug warnings on the basis of genetic subgroups – and only to that extent – such tort claims should not be recognized because potentially liability could be vast. Back in 2015, our comprehensive research uncovered ten cases involving unsubstantiated claims of injury from alleged pharmacogenomic variability of drug response, and a fair number of cases rejecting product liability claims predicated on solely on genetically based allegations of ineffectiveness in particular racial subgroups, as opposed to injury.
Since then, the FDA has been acting. At the time of our 2015 post, the FDA then required pharmacogenomic information in the “Clinical Pharmacology” section of drug labeling for somewhat more than 100 drugs. We looked again just now. The FDA maintains a “Table of Pharmacogenomic Biomarkers in Drug Labeling with Labeling Text” that, as of the date of this writing, contains 541 entries (some drugs have more than one entry). Twelve of the genetically based warnings on the FDA’s list are serious enough to warrant boxed warnings.
One of those boxed warning entries is for “clopidogrel,” a widely used anticoagulant drug, which is also the drug at issue in Shikada. Importantly, Shikada was not a product liability case, but rather a consumer fraud action brought by a state government. That cuts both ways. On the one hand, no matter what the ultimate result, it does not affect existing precedent holding that product liability claims must assert actual injury, not just ineffectiveness. On the other hand, state consumer protection litigation can be much larger in scope than any individual product liability action – as was the case in Shikada, where the court thankfully vacated a nuclear-level $834 million penalty. 2023 WL 2519857, at *1. But not all of the trial court’s findings were vacated in Shikada, which is why we named this post “Trouble in Paradise.”
Shikada’s liability allegations involved the purported concealment of pharmacogenomic efficacy information, not any direct risk to anyone’s health. This pharmacogenomic issue, which is also why the FDA required the boxed warning in 2009, concerns certain distinctive genetic differences (called “alleles”) that are much more common in Asian populations. That answers the “why Hawai’i” question, since Hawai’i, as our most diverse state, has a plurality of its citizens of Asian origin.
Persons with these alleles don’t metabolize the drug as well, so that the drug is allegedly a less effective option for them. This claimed lack of efficacy for “poor responders” – which the state claimed the defendant knew about before the FDA acted – is the basis of the state’s consumer protection claim. Except that the claim is for efficacy rather than risk, the misconduct allegations would be at home in a bog standard product liability case. Allegedly, “Defendants knew this fact years before 2009, when the FDA updated” the drug’s labeling, and did not adequately disclose it until the FDA acted. 2023 WL 2519857, at *1.
The trial court in Shikada ruled that the defendant engaged in “deceptive and unfair acts” that concealed the “poor responder” issue. Id. The $834 million penalty was not for any personal injury, but rather because users of the drug were “injured . . . by denying them the drug’s full promised [benefit], hindering their ability to give informed consent, and preventing them from taking an alternative drug or undergoing genetic testing to determine whether they were poor responders.” Id. By this screwball logic, even consumers who were not “poor responders” purportedly suffered harm from not having to spend extra money for “genetic testing” that would have been negative. Shikada vacated that penalty. Id.
Insofar as negative tests can be a compensable injury, the consumer protection claim in Shikada is every bit as dangerous as “medical monitoring.”
Even more screwball, however, was the trial court’s decision to grant summary judgment for the state plaintiff – the party bearing the burden of proof – on the issue of materiality, specifically whether “the label matter[ed] to consumers.” Id. That aspect was also vacated. Id. But even if nobody cared, Shikada affirmed the “unfair acts” finding. Id. That affirmance was despite extensive evidence that the various clinical trials had decidedly mixed outcomes as to the performance of the drug in Asian study subjects. Id. at *7 (discussing two studies with results showing Asian subjects with lower “risk of having an adverse cardiac event” and “the lowest occurrence of death, heart attack, or stroke”). Indeed, the FDA ultimately “removed” a statement that “poor metabolizers have worse clinical outcomes” from the aforementioned boxed warning. Id. at *9.
Shikada permitted the state’s prosecution notwithstanding the Hawai’ian statute’s “safe harbor” provision for “[c]onduct in compliance with” a federal agency’s “orders,” “rules,” or “statute.” Id. at *15 (quoting Haw. Rev. Stat. §481A-5(a)). Citing a twenty-year-old Colorado case, it interpreted this provision “narrowly” as inapplicable to “conduct which is not specifically allowed or required” by the FDA. Id. In that way, Shikada essentially nullified the statutory safe harbor. “FDA’s approval of [the drug’s] label does not confer the agency’s imprimatur on the companies’ decision not to add information” that the FDA never required prior to the boxed label. Id. at *16. The state was supposedly prosecuting “conduct,” not “the contents of the . . . label.” Id. So, even if the FDCA did not require either the additional research that the defendant allegedly “avoided” or that certain studies be publicized, the defendant could still be in violation of the Hawai’i statute. Id.
That ruling, allowing a state consumer protection prosecution for conduct that complied with the FDCA, not surprisingly faced a preemption defense. Shikada rejected that defense, too, on rather murky rationale. Citing only cases that predated the Supreme Court’s first recognition of implied FDCA preemption in drug cases, Shikada held “that state law imposes a greater duty to warn on drug makers than the FDA, does not give rise to implied conflict preemption.” Id. at *17 & n.26.
Despite having just characterized, only a couple of pages earlier, the state’s prosecution as not based on the labeling, but rather on other “conduct,” Shikada denied preemption for lack of “clear evidence” that the FDA would have rejected the same boxed warning ultimately added in 2009. Id. at *18. So Shikada let the state have it both ways – prosecuting “conduct” for purposes of the state-law safe harbor, but “labeling” for purposes of preemption.
The “clear evidence” discussion at least had the saving grace of rejecting (as has every other court) the maximalist plaintiff position that Merck Sharp & Dohme Corp. v. Albrecht, 139 S. Ct. 1668 (2019), required an actual submission to the FDA. See 2023 WL 2519857, at *18 n.27. But Shikada’s discussion of the “newly acquired information” prong of post-Albrecht implied preemption doesn’t even have that. Instead, Shikada let the state slide with an classic bootstrap rationale:
If, as the State alleges, Defendants knew enough about the poor responder issue to trigger a duty under state law to update the [drug’s] label, then they would also have enough “newly acquired information” to effectuate that update through the CBE regulations.
Id. If the mere “alleg[ation]” of a state-law cause of action automatically satisfies the newly acquired information requirement of the FDA’s changes being effected regulation, then: (1) every other post-Albrecht decision recognizing newly acquired information as as second prong of implied preemption would be wrong, and (2) newly acquired information as a separate preemption prong is “pau” in Hawai’i. With that ruling, Shikada didn’t have to bother with any detailed analysis of purportedly “newly acquired” information” of the sort that is characteristic of preemption cases decided by Mainland courts.
Now that we’ve worked through the worst – and extremely illogical − part of Shikada, we reach something that makes more sense: reversal of the bizarre summary judgment in favor of the plaintiff on “materiality” and the consequent vacation of that same trial court’s $834 million reward. Shikada reversed both the trial court’s “traditional” and “alternative” grounds for summary judgment.
The “traditional” (assuming that granting summary judgment for a plaintiff could ever be considered “traditional”) ground for the ruling was that, because the warning about Asians as more likely to be “poor responders” appeared in an FDA boxed label, it had to be material as a matter of law, under a “presumption of materiality” arising from the consumer fraud statute. Shikada responded “no way Hoke.”
First, the trial court “overstated the presumption of materiality.” 2023 WL 2519857, at *20.
A presumption of materiality does not end things. It’s not an inflexible rule that eliminates the need to look at materiality on a case-by-case basis. Overcoming the presumption of materiality is not a high hurdle. Defendants may always counter the presumption with extrinsic evidence.
Id. The defendants had extrinsic evidence in abundance:
- Expert testimony that “uniformly demonstrates that the boxed warning did not affect doctors’ prescriptions of [the drug].” Id. at *19 (internal quotation omitted).
- That doctors at the largest private hospital in Hawai’i, the Queen’s Medical Center, had not altered their prescription practices in response to the boxed warning, nor did “any” of them “conduct routine genetic testing . . . to determine if someone is a poor responder.” Id.
- The state’s own “public health journal . . . recommended that Hawai’i doctors not change their prescribing practice based on the boxed warning and that genetic testing not be done.” Id. at *20.
- “State public health agencies reimburse for [the drug] without regard to race or genotype and without requiring genetic testing.” Id.
Because the defendants had ample evidence with which to overcome any presumption of reliance in Shikada, the State’s emphasis on the FDA’s boxed warning (after having previously argued that its case involved “conduct” rather than labeling) could not save summary judgment.
[M]ateriality is about what consumers do, not what the FDA thinks. If the companies are able to present evidence that the information did not, in fact, change consumer behavior, they are entitled to do so. Nor are the companies’ statements that they considered the label information “important” a slam-dunk for the State. Because the standard is whether the information is material to a reasonable consumer, not the defendants.
2023 WL 2519857, at *20 (citations omitted) (emphasis original).
The trial court’s “alternative” ground for summary judgment was that it didn’t matter because he was going to find for the state anyway as the eventual factfinder. Id. at *21. We kid you not – the judge entered summary judgment in reliance on the strength of his own prejudgment of disputed facts in favor of the state plaintiff:
This alternative ruling involved the court weighing the evidence as if it were trying the case. The court felt “confident” it “would reach the same conclusion” if the materiality issue were presented at trial. So it ruled on materiality at the summary judgment stage, disregarding the summary judgment framework:
Shikada, 2023 WL 2519857, at *21. That was manifestly improper. “That is not how summary judgment works. . . . A judge deciding a summary judgment motion may not fact-find, even if the matter is set for a for a bench trial.” Id.
Summary judgment is no substitute for trial. The record is thinner. There’s no cross-examination. . . . An improvident grant of summary judgment denies a party the chance to fully mount an offense or defense. That is why the summary judgment process has a safeguard – the inference in favor of the non-moving party.
Id. at *22 (citations omitted). Given this discussion, we wouldn’t be surprised to see a recusal motion, following the Shikada decision. A more transparent admission by a judge that he has prejudged the evidence would be hard to find.
The failure of the trial court materiality holding also brought down its concomitant finding that the defendant’s conduct had “substantially injured” Hawai’ian consumers. Id. at *24.
Substantial injury . . . focuses on consequences for consumers. Defendants’ most basic argument against materiality – that in practice, the information in the black box did not matter and patients were not harmed by its absence – goes to substantial injury just as much as it goes to materiality.
Id. If doctors and hospitals are still not not offering genetic testing, “how were [plaintiffs] harmed by not having genetic testing then [pre-2009]?” Id. The same logic precluded the purported “injury” of being deprived of the opportunity to give informed consent. Id. The error in the trial court’s material-as-a-matter-of-law holding was also “plainly relevant to the question of whether a drug substantially injures patients by providing lower risk reduction.” Id.
Unfortunately for the defendants, however, Shikada further held that, interpreting the Hawai’i statute “in a way that maximizes consumer protection,” consumer injury was not an essential element of the statutory cause of action for “unfair acts.” Id. at *27. Essentially, under that particular statute, a defendant can be liable simply because the judge doesn’t like what that defendant did. In Shikada, the same judge who prejudged materiality also found that, even though the FDCA wasn’t violated, the defendants “suppress[ed] research and inquiry into the drug for financial reasons.” Id. That finding, Shikada held, had “nothing to do with the black box label” and “nothing to do with doctors’ prescribing habits,” and so wasn’t “tainted” by the improper materiality finding. Id.
Thus, the defendants could be liable, under a “consumer protection” rationale, for what amounts to negligence in the air – disfavored conduct that never actually hurt anybody. “Even if the drug proves to be safe, avoiding investigation into known safety issues in order to keep profits up offends public policy.” Shikada, 2023 WL 2519857, at *25.
Finally, because the improper materiality finding thoroughly tainted the monetary award, that award was vacated in full.
[T]he court’s heavy reliance on its materiality ruling to reach its penalties determination makes it necessary to remand the entire question of damages. . . . Those injuries [to consumers], the court explained, flowed from the fact that Defendants had denied patients material information. The “injury to the public” paragraph in the court’s penalty award discussion uses the word “material” no fewer than three times.
Id. at *29. Since the only remaining basis for liability was the process violation, as opposed to withholding material information, a large “per-prescription based penalty” could not stand. That “type of penalty only makes sense if the missing black box warning was material to consumers.” Id.
To us, Shikada demonstrated two things. First, it shows how dangerous a broadly interpreted consumer protection statute can be. Defendants can be hit with some sort of common-law-based fine for anything under the sun that a prosecutor, and a judge, don’t like, even if nobody was harmed and the drug may well be safe. That’s the worst thing. Second, this statutory liability being so thoroughly uncoupled from actual damages at least has a silver lining − of underscoring the distinction between product liability and consumer protection – that product liability requires physical injury and thus cannot be based, as the claims in Shikada were, on mere lack of efficacy in a racially distinct population, rather than for any actual risk of harm.