Monday, May 31, 2010

A Safe Harbor Opinion that is Almost Heaven

When you see a reference to West Virginia in this blog, it's usually followed by biting criticism, regret, and a citation to the latest Judicial Hellhole listing. But not everything out of the Wild and Wonderful state makes us grimace. Heck, we're huge fans of Chuck Yeager, Jerry West, and Don Knotts. John Denver sang a pretty nice song about the place -- sort of. (The Shenandoah River and Blue Ridge Mountains are associated more with Virginia.)

And, mirabile dictu, last week saw a nice West Virginia opinion on state safe harbor law. Arnett v. Mylan, Inc., 2010 U.S. Dist. LEXIS 50460 (S.D. W. Va. May 20, 2010). It's not exactly preemption, but it's kind of a kissing cousin to it (we are resisting the usual West Virginia jokes, honest), and it'll do.

The case was a wrongful death action, claiming plaintiff's decedent died from wearing a fentanyl pain patch. The decedent was an Oklahoma resident, and the defendants are corporate residents of West Virginia. Because West Virginia uses the lex loci delicti (place of the injury) test, Oklahoma law applied to the case. That in itself is a good ruling. Then the court discusses the Twombly standard. By this point, we're practically shooting off fireworks, and it's not just because of the Holiday. (More on that later.)

Count Three of the Complaint asserts a claim under the Oklahoma Consumer Protection Act (OCPA). The OCPA provides a safe harbor for defendants by providing that nothing in the act applies to "[a]ctions or transactions regulated under laws administered by … any … regulatory body or officer acting under statuory authority of this state or the United States." 15 Okla. Stat. section 754(2). The pain patch was subject to the Food Drug and Cosmetic Act, so the OCPA action is history, right? Yes. Yes it is. But not without a fight.

The plaintiff argued that the section 754(2) safe harbor should not apply, because the federal law and regulations relied upon by defendant provide no independent remedy. Of course, it's true that there's no private right of action under the FDCA. The plaintiff's argument reduces to the old there's-no-wrong-without-a-remedy theme. First of all, that's nonsense. There are loads of wrongs without remedies. Lots of people this weekend yielded 146 minutes of their lives to watch Sex and the City 2. Sadly, there's no remedy for that. Second, it's perfectly appropriate for society to decide that some interests are better protected via policy-setting that is well-informed and consistent, as opposed to the jury trial lottery system.

There is no decision from any Oklahoma court addressing the scope of the section 754(2) safe harbor. But there is an opinion from a New Jersey federal court on this issue, and it's not great (at least on this issue). It's not terrible, either. As the young'uns would say, it's just "meh." In Money v. Bristol-Myers Squibb Co., 2009 U.S. Dist. LEXIS 121094, 2009 WL 5216987 (D.N.J. December 30, 2009), the court acknowledged that the absence of a private right of action under FDCA didn't call off the safe harbor, because the federal regulatory scheme "exists to afford protection to consumers, which may indeed be sufficient remedy." But the court refused to apply the safe harbor because the parties had not adequately briefed whether the defendants had actually complied with the federal regulations. In any event, the court dismissed the plaintiff's claim on other grounds. Thus, we're calling the court's insistence on compliance -- which introduces complications and second-guessing -- as mere, unfortunate dicta.

The West Virginia court did much better, at least in our eyes. (We'll be rooting for the Mountaineers the next time they take on the Scarlet Knights.) As the Arnett court held, "Contrary to the Money court's analysis, the simple language of section 754(2) focuses solely on whether there is regulation, not whether there is compliance." Arnett, 2010 U.S. Dist. LEXIS 50460, * 10. That's clear-thinking and that's a safe harbor.

Not to sound ungrateful but can't we get rulings like this occasionally from the West Virginia state courts?
* * * * *
Speaking of gratitude, today is Memorial Day. Our Uncle Ronny is a devotee of the Sunday ABC News talking-heads show, This Week, but he thinks that the In Memoriam section scrolls by the names of the week's war dead too quickly. He wishes it slowed down so that he could read all the names, hometowns, and ages. We agree.

Uncle Ronny doesn't read this blog, but that's okay. We're frankly grateful that anybody reads it. We're grateful to be able to write about law, even when we disagree with the court's application, and we're grateful for any and all comments, even when they disagree with us. We're not blind to the fact that the reason we can have such a free exchange of ideas, and the reason that we live in a nation of law, is because so many brave people made the ultimate sacrifice.

Today we're going to slow down, remember, and express gratitude.

Friday, May 28, 2010

Guest Post - More Musings on Mensing –Will Conte Rear Its Ugly Head if Claims Against Generic Companies Are Preempted?

What follows is a guest post from Kelly Savage Day of Sedgwick Detert.  Kelly gets all the credit, and all the blame, for this post.

As many of you know, earlier this week, the United States Supreme Court invited the Solicitor General (or for now Acting Solicitor General) to "express the view of the United States" in the Mensing case (Supreme Court Nos. 09-993, 09-1039, 588 F.3d 603 (8th Cir. Nov. 27, 2009).  Mensing was the first federal appellate case to address generic preemption in the wake of Wyeth v. Levine. (For an overview of the current generic drug preemption landscape, see the Washington Legal Foundation’s recent Legal Backgrounder on the topic.)  In Mensing, the Eighth Circuit concluded that the federal regulatory regime governing generic pharmaceuticals does not preempt state-law failure-to-warn claims against generic drug manufacturers.  The Court also rejected the reasoning set forth by the California Court of Appeal in Conte v. Wyeth and held that brand-name drug manufacturers were not liable for harm caused by a plaintiffs’ use of a generic version of the pioneer’s brand-name drug. Id. at 613-14.

The United State Supreme Court’s invitation to the Acting Solicitor General suggests that it has at least some interest in the preemption issues presented by generic drug manufacturers. While this may ultimately bode well for generic manufacturers, we believe any consideration of Mensing may also ultimately impact pioneers (and not necessarily for the better).  Here’s how and why.

In 2008, California’s First District Court of Appeals ruled in Conte v. Wyeth that a brand-name drug manufacturer could be held liable for harm to individuals who take the generic version of their name-brand product for alleged deficiencies in the generic drug’s labeling.  At the time, many defense attorneys [editors' note - especially us] viewed the decision as a misguided attempt by a California court to provide a remedy to plaintiffs injured by generic products, because plaintiff’s failure-to-warn claim against the generic drug manufacturer (of the drug plaintiff actually ingested) was dismissed on conflict preemption grounds.  Implicit in the decision was the ideal that if the federal Food, Drug and Cosmetic Act (“FDCA”) required generic drug labeling be the “same as” brand-name labeling, then injured plaintiffs should not be left remediless.  Instead, harmed plaintiffs should be permitted to recover against brand-name drug manufacturers who could change their labeling to provide stronger warnings without violating the Act; these warnings would ultimately make their way on to generic labeling and protect generic drug users.  Brand-name manufacturers (and their attorneys) viewed Conte as an improper end-run around generic preemption and feared the decision would dramatically shift liability on to pioneers for their generic competitor’s defective products.

This fear appeared to be unjustified.  No reported decision anywhere has followed Conte. This is partially because Levine drastically changed the preemption landscape. Since Levine, only two courts have concluded that failure-to-warn claims against generic drug manufacturers are preempted, and both are currently on appeal.  Morris v. Wyeth, Inc., 582 F. Supp.2d 861 (W.D. Ky 2008), reaff’d, 2009 WL 4245905 (W.D. Ky Feb. 20, 2009), motion for reconsideration denied, 642 F. Supp.2d 677 (W.D. Ky 2009); Wilson v. Pliva, Inc., 640 F.Supp.2d 879 (W.D. Ky. 2009) (same history); Gaeta v. Perrigo Pharms., Inc., 672 F. Supp.2d 1017 (N.D. Cal. 2009).

The legal landscape, however, may soon change. If the Supreme Court accepts Mensing and concludes that failure-to-warn claims against generic drug manufacturers are preempted (or worse that brand-name manufacturers may be liable for harm caused by their generic counterparts’ drug labeling), then other courts may feel compelled (or even required) to follow Conte to avoid leaving injured plaintiffs remediless.  For now, both generics and pioneers must simply wait and see what happens next.

Thursday, May 27, 2010

Adverse Event Report Cheat Sheet

A lot of things about that recent Gadolinium opinion ticked us off.  But one of the lowest of many low points was when the court ruled a causation opinion based upon FDA adverse event reports (“AERs”) was admissible in a civil trial because the FDA used AERs to assess causation administratively.  In re Gadolinium-Based Contrast Agents Products Liability Litigation, 2010 WL 1796334, at *9-11 (N.D. Ohio May 4, 2010).  Never mind that the FDA’s administrative standards (and agency standards generally) are a far cry  from those used in civil litigation.

Anyway, as we pointed out in the Gadolinium post, a lot of other courts have taken a more sensible – not to mention scientifically valid – approach to AERs and have excluded them, or opinions based upon them, from evidence.  Heck, even Gadolinium wouldn’t let the plaintiffs’ experts base their opinions “based on AERs alone.”  2010 WL 1796334, at *11.  For this reason we’ve decided to make exclusions of AERs from evidence (on grounds other than notice) our latest “cheat sheet.”

Before get to the cases, however, we’ll also supply links to some relevant FDA documents.

(1) the FDA’s 1996 Annual Adverse Experience Drug Report, in which the agency states that AERs “may not be used to calculate incidences or estimates of drug risk”;

(2) the FDA’s 2003 Pharmaceutical Safety Assessments Analysis, which characterized causation assessments based upon AERs as “dubious,” “inefficient,” and “low quality”;

(3) the FDA's 2005 Guidance for Industry Good Pharmacovigilance Practices & Pharmacoepidemiologic Assessment, which discusses the "reporting biases" underreporting issues plaguing AERs.

(4) the FDA’s current website description of its adverse event reporting system, discussing the “limitations” of AERs and how they “cannot be used to calculate the incidence of an adverse event in the U.S. population.”

(5) the Department of Justice's reccent amicus brief in Bruesewitz v. Wyeth in which it states that even the structer regime of “voluntary” adverse vaccine event reporting “alone” isn’t enough to establish anything scientific.  Br. at 21-22.
(6) the FDA's current website description of its MAUDE system of medical device reporting, which acknowledges “limitations,” such as “potential submission of incomplete, inaccurate, untimely, unverified or biased data,” and that “the incidence or prevalence of an event cannot be determined from this reporting system alone due to potential under-reporting of events and lack of information about frequency of device use.”

Here goes.  It’s the usual format: a list of cases, similar to our scorecards, but only including those cases we would consider citing in support of a motion to exclude.  Like the scorecards, this cheat sheet will be updated periodically.

  1. Wolf v. Procter & Gamble Co., 555 F. Supp. 613 (D.N.J. Dec. 22, 1982) (tampon).  Excluding AERs from evidence. AERs are inadmissible hearsay. Pre-Daubert case.
  2. Richardson v. Richardson-Merrell, Inc., 649 F. Supp. 799 (D.D.C. Dec. 19, 1986) (Bendectin).  Excluding AERs from evidence and as a basis for expert opinion.  AERs “are neither exceptions to the hearsay rule nor data reasonably relied upon by experts in the field of making determinations of causality.” Richardson was affirmed on other grounds.  Richardson v. Richardson-Merrell, Inc., 857 F.2d 823 (D.C. Cir. 1988). Pre-Daubert case.
  3. Hagaman v. Merrell Dow Pharmaceuticals, 1987 WL 342949 (D. Kan. June 26, 1987) (Bendectin).  Excluding AERs from evidence.  AERs “are often incomplete, in that they often do not indicate whether other drugs are being taken, or whether other drugs might have caused the reported health problem.”  Many “have been prompted by contemplated or existing litigation.”  Pre-Daubert case.
  4. Martinkovic v. Bangash, 1987 WL 28400 (N.D. Ill. Dec. 18, 1987) (DTP vaccine).  AERs excluded as evidence of causation, although admissible for purposes of notice.  “[A]necdotal reports of alleged adverse reactions are not admissible to prove the truth of the matter” and are hearsay for that purpose.  Pre-Daubert case.
  5. Cosgrove v. Merrell Dow Pharmaceuticals, Inc., 788 P.2d 1293 (Idaho June 8, 1989) (Bendectin).  Affirming exclusion of AERs from evidence.  AERs “are anecdotal in nature and should not form the basis for any conclusions, expert or otherwise” and are inadmissible hearsay.  Pre-Daubert case.
  6. Peters v. Johnson & Johnson Products, Inc., 783 S.W.2d 442 (Mo. App. Jan. 23, 1990) (tampon).  Affirming exclusion of AERs from evidence.  AERs are inadmissible hearsay as “unsolicited letters and unsubstantiated reports from alleged . . . users do not stand as to their trustworthiness.”  Pre-Daubert case.
  7. DeLuca v. Merrell Dow Pharmaceuticals, Inc., 791 F. Supp. 1042 (D.N.J. April 29, 1992) (Bendectin).  Excluding expert opinion based upon AERs.  AERs “are unreliable for determining causation” because they “ADRs have inherent biases as they are second-or-third hand reports, are affected by medical or mass media attention, and are subject to other distortions.”  They are “not of a type of data that are reasonably relied upon by experts . . . to make a determination of [a] causal relationship.”  DeLuca was affirmed without opinion: 6 F.3d 778 (3d Cir. 1993).  Pre-Daubert case.
  8. Wade-Greaux v. Whitehall Laboratories, Inc., 874 F. Supp. 1441 (D.V.I. March 3, 1994) (Primatine).  Excluding expert opinion based upon “[a]necdotal reports of the claimed adverse experiences” and AERs “filed with manufacturers or regulatory authorities.”  “[S]uch data represent anecdotal information of chance associations, do not purport to assess cause and effect and have no epidemiological significance.”  Pre-Daubert case.
  9. Sprague v. Upjohn Co., CA No. 91-40035-NMG (D. Mass. May 13, 1994) (Halcion).  Excluding expert opinion based upon AERs. AERs are “not a scientifically valid or accepted methodology for making a determination of causation or relative drug safety.”  Pre-Daubert case.  We don't have a copy of this opinion, but would like one.
  10. Casey v. Ohio Medical Products, 877 F. Supp. 1380 (N.D. Cal. Feb. 28, 1995) (Halothane).  Excluding expert report based upon a study that was based upon foreign AERs.  The foreign AERs “simply describe reported phenomena without comparison to the rate at which the phenomena occur,” “do not isolate and exclude potentially alternative causes,” and “do not investigate or explain the mechanism of causation.”
  11. Reynolds v. Warthan, 896 S.W.2d 823 (Tex. App. March 17, 1995) (Kwell).  Affirming exclusion of AERs from evidence on grounds of danger of jury confusion.  AERs “did not establish a causal link between [the product] and the reported symptoms; rather, they created a suspicion without any medical proof.”  “[S]ubmission of [an AER] does not necessarily constitute an admission that the drug caused the adverse reaction.”
  12. Haggerty v. Upjohn Co., 950 F. Supp. 1160 (S.D. Fla. Dec. 6, 1996) (Halcion).  Excluding expert opinion based upon AERs and “anecdotal case reports appearing in medical literature.”  Due to the “the inherent bias in the” AERs, they “cannot be relied upon to form causation opinions.”  Haggerty was affirmed without opinion: 158 F.3d 588 (11th Cir. 1998).
  13. Lopez v. Wyeth-Ayerst Laboratories, 1996 WL 784566 (N.D. Cal. Dec. 13, 1996) (non-swine flu vaccine).  Excluding expert report based upon “case reports,” which were probably AERs, absent evidence that the reports “isolate and exclude other potential causes.”  Lopez was affirmed in a non-precedential opinion.  Lopez v. Wyeth-Ayerst Laboratories, Inc., 1998 WL 81296 (9th Cir. 1998) (“anecdotal reports . . . do not attempt to isolate causes and are not intended to reach conclusions as to causation”) (in table at 139 F.3d 905).
  14. Hall v. Baxter Healthcare Corp., 947 F. Supp. 1387 (D. Or. Dec. 18, 1996) (breast implants).  Excluding expert opinion based upon “case reports or collections of case reports” which sound like AERs.  “[C]ase reports and case studies are universally regarded as an insufficient scientific basis for a conclusion regarding causation because case reports lack controls.”
  15. In re Norplant Contraceptive Products Liability Litigation, 1997 WL 80527 (E.D. Tex. Feb. 19, 1997) (Norplant).  AERs excluded from evidence on the basis of jury confusion and waste of time.  AERs are only “marginally probative” because “the FDA requires [defendant] to submit all adverse events reported to it without regard to whether there is any proven causal connection."
  16. Saari v. Merck & Co., 961 F. Supp. 387 (N.D.N.Y. March 11, 1997) (hepatitis B vaccine).  AER about plaintiff’s case excluded from evidence.  It was “was simply a report of what plaintiff told [the reporting doctor] about what she believed was her reaction to the vaccine.”  Reporting physician could not testify since in the AER he “neither confirmed nor den[ied] that there is any [causal] relationship.”
  17. Golod v. La Roche, 964 F. Supp. 841 (S.D.N.Y. May 20, 1997) (Tegison).  AERs excluded from evidence of causation, although admissible for purposes of notice.  “[T]he reports may not be sufficiently reliable or relevant to be admissible on the issue of causation, [but] are relevant to [defendant’s] awareness.”
  18. Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d. 706 (Tex. July 9, 1997) (Bendectin).  Reversing admission of expert opinion based on “case reports” (which in other Bendectin cases included AERs).  “[P]hysicians following scientific methodology” would not “rely on case reports to determine whether a substance is harmful.”  “[A]necdotal . . . evidence accomplishes no more than a false appearance of direct and actual knowledge of a causal relationship.”
  19. Willert v. Ortho Pharmaceutical Corp., 995 F. Supp. 979 (D. Minn. Feb. 25, 1998).  Excluding expert opinion based on “case reports” (which might be AERs) and other “anecdotal” evidence.  “[T]hey simply describe reported phenomena without comparison to the rate at which the phenomena occur,” “do not isolate and exclude potentially alternative causes,” and “do not investigate or explain the mechanism of causation.”
  20. In re Breast Implant Litigation, 11 F. Supp.2d 1217 (D. Colo. June 3, 1998) (breast implants).  Technically this case shouldn’t be here because it doesn’t involve FDA AERs, but other anectodal evidence (an expert’s individual clinical experience).  But it comes up so often – and cites several AER cases – that we’re including it.  “[C]ase reports. and case studies universally are regarded as an insufficient scientific basis for a conclusion regarding causation because case reports lack controls.”
  21. Allison v. McGhan Medical Corp., 184 F.3d 1300 (11th Cir. Aug. 18, 1999) (breast implants).  Affirming exclusion of expert opinion based on “case reports” (which might be AERs).  “Case reports and case studies are universally regarded as an insufficient scientific basis for a conclusion regarding causation because case reports lack controls.”
  22. Revels v. Novartis Pharmaceuticals Corp., 1999 WL 644732 (Tex. App. Aug. 26 1999) (non-precedential), review denied (Tex. June 29, 2000) (Parlodel).  Affirming exclusion of expert opinion based upon AERs.  “[A] study of case reports alone is a scientifically invalid manner in which to form an expert opinion.”
  23. Brumbaugh v. Sandoz Pharmaceuticals Corp., 77 F. Supp. 2d 1153 (D. Mont. Sept. 27, 1999) (Parlodel).  Excluding expert opinion based upon AERs.  AERs “do not demonstrate a causal link but instead represent coincidence.”  Their “most significant analytical defect is that they don’t isolate and investigate the effects of alternative causation.”
  24. Linnen v. A.H. Robins Co., 2000 WL 16769 (Mass. Super. Dec. 14, 1999) (Phentermine).  Excluding expert opinion based on “between ten and twenty case reports” that sound like AERs.  “[C]ase reports alone are not considered reliable scientific evidence of causation.”
  25. Nelson v. American Home Products Corp., 92 F. Supp.2d 954 (W.D. Mo. March 24, 2000) (Cordarone).  Excluding expert opinion based upon AERs and possibly other case reports.  AERs “do not demonstrate a causal link sufficient for admission to a finder of fact in court.”
  26. Robinson v. Astra Pharmaceutical Products, Inc., 765 So.2d 378 (La. App. March 31, 2000) (Citanest).  AERs were “wholly irrelevant” because they were not substantially similar to the plaintiff's situation.
  27. In re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Products Liability Litigation, 2001 WL 454586 (E.D. Pa. Feb. 1, 2001) (fen-phen).  Excluding expert opinion based upon AERs.  AERs “are universally recognized as insufficient and unreliable evidence of causation.”
  28. Glastetter v. Novartis Pharmaceuticals Corp., 252 F.3d 986 (8th Cir. June 8, 2001) (Parlodel).  Affirming exclusion of expert opinion based upon AERs.  Mere “case reports” suffer from numerous flaws and are “not scientifically valid proof of causation.”  The trial court opinion is at Glastetter v. Novartis Pharmaceuticals Corp., 107 F. Supp.2d 1015 (E.D. Mo. 2000).
  29. Caraker v. Sandoz Pharmaceuticals Corp., 172 F. Supp. 2d 1046 (S.D. Ill. Sept. 12, 2001) (Parlodel).  Excluding expert opinion based upon AERs and published case reports.  AERs “make little attempt to isolate or exclude possible alternative causes, lack adequate controls, and lack any real analysis.”
  30. Cloud v. Pfizer, Inc., 198 F. Supp. 2d 1118 (D. Ariz. Nov. 21, 2001) (Zoloft).  Excluding expert opinion based upon AERs and “retrospective case reports.”  Such items “are merely compilations of occurrences, and have been rejected as reliable scientific evidence supporting an expert opinion.”
  31. Hollander v. Sandoz Pharmaceuticals Corp., 289 F.3d 1193 (10th Cir. May 10, 2002) (Parlodel).  Affirming exclusion of expert opinion based upon AERs and other case reports.  AERs “contain only limited information” and are “unreliable evidence of causation.”  The trial court opinion is at Hollander v. Sandoz Pharmaceuticals Corp., 95 F. Supp.2d 1230 (W.D. Okla. 2000) (“case reports have been repeatedly rejected as a scientific basis for a conclusion regarding causation”).
  32. Rider v. Sandoz Pharmaceuticals Corp., 295 F.3d 1194 (11th Cir. June 24, 2002) (Parlodel).  Affirming exclusion of expert opinion based upon AERs.  Such case reports “are merely accounts of medical events” and “reflect only reported data, not scientific methodology.”  They do “not by themselves provide reliable proof of causation.”  The trial court opinion is at Siharath v. Sandoz Pharmaceuticals Corp., 131 F. Supp.2d 1347 (N.D. Ga. 2001) (case reports “cannot establish general causation”).
  33. Newton v. Roche Laboratories, Inc., 243 F. Supp.2d 672 (W.D. Tex. Dec. 5, 2002) (Accutane).  Excluding expert opinion based upon AERs.  “[M]any other courts have soundly rejected case reports as an acceptable basis for causation.”
  34. Soldo v. Sandoz Pharmaceuticals Corp., 244 F. Supp.2d 434 (W.D. Pa. Jan. 13, 2003) (Parlodel).  Excluding expert opinion based upon AERs.  AERs “do not demonstrate a causal link but instead represent coincidence.  Case reports and ADEs are compilations of occurrences, and have been rejected as reliable scientific evidence supporting expert opinion so as to meet the requirements set forth in Daubert.”
  35. Dunn v. Sandoz Pharmaceuticals Corp., 275 F. Supp. 2d 672 (M.D.N.C. Aug. 4, 2003) (Parlodel).  Excluding expert opinion based upon AERs.  AERs “are not controlled studies, and they cannot be verified through peer review.  [AERs] often do not include information about the patient's medical history, family medical history, use of other medications or drugs, or other information that would be necessary to determine whether causation between the use of the drug and the reported adverse effect can be established. [AERs] are not scientific proof of causation.”
  36. Swallow v. Emergency Medicine of Idaho, P.A., 67 P.3d 68 (Idaho April 2, 2003) (Cipro).  Excluding expert opinion based upon AERs. AERs are "based solely upon the temporal relationship between the administration of [the drug] and the adverse . . . event."  "There was no showing as to what percentage of . . . patients are represented by these ten events, nor . . . that these ten events were statistically significant.  In other words, there is no showing that [the AERs are] a greater incidence of such events than would be expected to occur by chance."
  37. Freeman v. Hoffman-Laroche, Inc., 2004 WL 5382304 (Neb. Dist. March 18, 2004) (Accutane).  Further discovery of AER files denied.  AERs “do[] not constitute valid scientific proof of medical causation and therefore, has little relevance in a product liability case.”
  38. Skibniewski v. American Home Products Corp., 2004 WL 5628157 (W.D. Mo. April 1, 2004) (fen-phen).  AERs excluded from evidence.  AERs “cannot be used to establish causation,” and “are hearsay and do not fall within an exception.”
  39. In re Meridia Products Liability Litigation, 328 F. Supp.2d 791 (N.D. Ohio July 7, 2004) (Meridia).  Excluding expert opinion on comparative drug risk based upon AERs.  AERs “do not screen out alternative causes for the adverse event and often lack analysis,” are “not scientifically valid proof of causation” and are “irrelevant to establish a material issue of fact.”
  40. McClain v. Metabolife International, Inc., 401 F.3d 1233 (11th Cir. March 2, 2005) (ephedrine).  Reversing admission of expert opinion based upon AERs.  AERs “reflect complaints called in by product consumers without any medical controls or scientific assessment.”  “Uncontrolled anecdotal information offers one of the least reliable sources to justify opinions about both general and individual causation.”
  41. Ryman v. Sec’y of Dep’t of Health & Human Services, 65 Fed. Cl. 35 (2005) (hepatitis B vaccine).   Affirming a trier of fact's rejection of expert causation testimony.  Finding "several difficulties" with reliance upon adverse event reports:  “First, the reports can be filed by anyone.  Second, the quantity and quality of information obtained in the reports is often insufficient to make an informed decision as to whether a causal link exists between the vaccination and the injury.   Third, the reports may be biased towards pre-existing notions of adverse events.  Fourth, the respondent's expert . . .  testified that VAERS reports 'offer very little information regarding causality.'”
  42. Heckstall v. Pincus, 797 N.Y.S.2d 445 (N.Y.A.D. June 16, 2005) (Bupropion).  Excluding expert opinion based upon AERs.  AERs are “unverified listings and reporting of adverse reactions . . . [and] “are not generally accepted in the scientific community on questions of causation.”
  43. Appleby v. Glaxo Wellcome, Inc., 2005 WL 3440440 (D.N.J. Dec. 13, 2005) (Lotronex).  Excluding AERs from evidence.  AERs are not FDA conclusions and thus have no guarantees of genuineness. AERs “may not be sufficiently reliable or relevant to be admissible on the issue of causation.”
  44. Pauley v. Bayer Corp., 2006 WL 463866 (Pa. C.P. Jan. 26, 2006) (Baycol).  Excluding AERs from evidence.  AERs are “not the product of laboratory research or any type of controlled study,” but “merely the compilation of experiential reports.”  They “are not proof of the data they contain, and do not directly bear upon the adequacy of label warnings.”  Pauley was affirmed in a non-citable memorandum opinion. Pauley v. Bayer Corp., 2009 WL 1654592 (Pa. Super. June 12, 2009) (“the court’s limitation on the use of the AERs data at trial was appropriate, because it was anecdotal, not scientific”) (in table at 981 A.2d 331).
  45. Leathers v. Pfizer, Inc., 233 F.R.D. 687, 694 (N.D. Ga. March 10, 2006) (Lipitor).  Excluding expert opinion based upon AERs.  AERs “reflect only reported data, not scientific methodology . . . with little or no patient history, description or course of treatment, or reasoning to exclude other possible causes."
  46. Ervin v. Johnson & Johnson, Inc., 2006 WL 1529582 (S.D. Ind. May 30, 2006) (Remicade).  Excluding expert opinion based upon AERs. AERs “do little more than establish a temporal association between an exposure to a drug and a particular occurrence.”  Ervin was affirmed:  Ervin v. Johnson & Johnson, Inc., 492 F.3d 901 (7th Cir. 2007), without any specific discussion of AERs.
  47. Creazzo v. Medtronic, Inc., 903 A.2d 24 (Pa. Super. 2006) (Itrel implantable neurological electrical pulse generator).  Affirming exclusion of expert opinion based upon MDRs.  An inference of defect cannot be drawn from the number of complaints.  MDRs "invite rank speculation and are not demonstrably relevant to the failure of the individual unit."
  48. Dellinger v. Pfizer Inc., 2006 WL 2057654 (W.D.N.C. July 19, 2006) (Neurontin).  Excluding expert opinion based upon AERs.  AERs “are not scientific proof of causation.”  “[M]any courts have recognized that adverse drug reaction case reports and other regulatory reports fail to test a causal hypothesis and therefore cannot support a causation opinion.”
  49. Sutherland v. Matrixx Initiatives, Inc., ___ F.Supp.2d ___, 2006 WL 6617000 (N.D. Ala. Nov. 7, 2006) (Zicam). Excluding expert opinion based upon "case reports," which may not have been FDA-reported AERs.  "[A]s is always true of case reports, there are inherent methodological concerns about their significance."  "Anecdotal hearsay cannot fill the gap."
  50. Benkwith v. Matrixx Initiatives, Inc., 467 F. Supp.2d 1316 (M.D. Ala. Dec. 27, 2006) (Zicam).  Excluding expert opinion based upon AERs.  AERs are “are even less persuasive than case reports” because they are “[u]ncontrolled anecdotal information.”
  51. Salden v. Matrixx Initiatives, Inc., 2007 WL 850239 (E.D. Mich. March 16, 2007) (Zicam). Excluding expert opinion based upon a "case report," not an FDA-submitted AER, as "merely an anecdotal observation" lacking "confirmatory research."
  52. Wyatt v. Matrixx Initiatives, Inc., 2007 WL 7238402 (N.D. Ala. March 30, 2007) (Zicam). Excluding expert opinion based upon "case reports," probably not true AERs, as "anecdotal evidence, not evidence that has been vigorously tested using scientific methodology."
  53. In re: Accutane Products Liability Litigation, 2007 WL 1288354 (M.D. Fla. May 2, 2007) (Accutane).  Excluding AERs from evidence. AERs “reflect[] nothing more than an assessment of a possible relationship, not an actual relationship.”
  54. Goldstein v. Centocor, 2007 WL 7428597 (S.D. Fla. May 14, 2007) (Remicade).  Excluding AERs from evidence.  MedWatch reports are hearsay.  They are not business records because their submission is purely voluntary.  Nor are they reliable because voluntary reporting is subject to various biases.  They are not adoptive admissions, because a reporting manufacturer does not vouch for their truth.  AERs are "uncontrolled anecdotal information" not sufficient to base an expert opinion, and their prejudice outweighs their probative value because they give a one-sided view of risks with no corresponding admission of beneficial uses of the drug.
  55. In re: Accutane Products Liability Litigation, 511 F. Supp.2d 1288 (M.D. Fla. June 15, 2007) (Accutane).  Excluding expert opinion based upon AERs and case reports.  "The reports are unreliable as proof of causation because, in general, the events were not observed in such a way as to rule out coincidence or other potential causes."
  56. In re Baycol Products Litigation, 532 F. Supp.2d 1029 (D. Minn. July 16, 2007) (Baycol).  Excluding expert opinion on comparative drug risk based upon AERs.  “[T]he limitations inherent in AER data” preclude any rate of error analysis and “no evidence has been submitted to demonstrate that such an analysis is generally accepted.”
  57. In re Viagra Products Liability Litigation, 572 F. Supp.2d 1071 (D. Minn. 2008) (Viagra).  Excluding expert opinion based upon 10 case reports and one rechallange.  "The difficulty with case reports is distinguishing between association and causation."  One rechallenge among millions of prescriptions is a "paucity."
  58. Rose v. Matrixx Initiatives, Inc., 2009 WL 902311 (W.D. Tenn. March 31, 2009) (Zicam).  Excluding expert opinion based upon ten "case reports," which are not technically AERs.  The reports are “mere accoun[ts] of medical events," "reflect[] only reported data, not scientific methodology," and while they “may bolster true toxicological data, they are not, standing alone, sufficient to establish general causation.”
  59. Gibson v. Sanofi-Aventis U.S., LLC, 2009 WL 3490454 (W. D. Ky. Oct. 27, 2009) (Ambien).  Excluding expert opinion based upon "a collection of case reports," which sound like AERs, as "wholly inadequate."
  60. Ranes v. Adams Laboratories, Inc., 778 N.W.2d 677 (Iowa Feb. 5, 2010) (PPA). Affirming exclusion of expert opinion based upon AERs and published case reports.  “[C]ase reports are merely accounts of medical events. They reflect only reported data, not scientific methodology.”  “[T]he methodology used by the expert becomes suspect when it is only supported by case reports of limited use to the medical field.”
  61. Smith v. Pfizer Inc., 2010 WL 1754443 (M.D. Tenn. April 30, 2010) (Neurontin). Excluding AERs from evidence.  AERs are not probative of causation as they have “inherent biases as they are second-or-third hand reports, are affected by medical or mass media attention, and are subject to other distortions.”
  62. Hendrix  v. Evenflo Co., Inc., 609 F.3d 1183 (11th Cir. June 22, 2010) (child restraint system).  Affirming exclusion of expert testimony.  “Case studies and clinical experience, used alone and not merely to bolster other evidence, are also insufficient to show general causation.”
  63. Kilpatrick v. Berg, Inc., 613 F.3d 1329 (11th Cir. Aug. 12, 2010) (pain pump).  Affirming that case study was an unreliable basis for expert testimony because it did not contain statistical analysis and did not draw medically valid conclusions.  The excluded expert “acknowledged that case reports . . . are ‘way down at the very bottom as far as medical strength of an article’ and cannot establish medical causation,” because of a “multitude of factors that could have caused” the alleged injuries.
  64. Toni’s Alpacas, Inc. v. Evans, No. 09–cv–02045–REB–CBS, 2010 WL 3730382 (D. Colo. Sept. 16, 2010) (fiber supplement).  Rejecting anecdotal reports as foundation for proof of causation, since they do not isolate and exclude alternative causes and lack controls.
  65. In re Zicam Cold Remedy Marketing, Sales Practices, & Products Liability Litigation., No. 09–md–2096–PHX–FJM, 2011 WL 798898 (D. Ariz. Feb. 24, 2011) (Zicam).  The FDA’s “AERs data and the agency’s reports are not admissible bases” for expert causation opinions.  Such reports “reflect complaints called in by product consumers without any medical controls or scientific assessment,” and are “uncontrolled anecdotal information [which] is not the foundation of a reliable causation methodology.”
  66. In re Denture Cream Products Liability Litigation 795 F. Supp.2d 1345 (S.D. Fla. June 13, 2011) (Fixodent).  Expert testimony on general causation was unreliable because there was “no evidence that Plaintiffs’ experts or the case reports they rely on [were] systematic in considering other plausible hypotheses and excluding background risk.”  AERs are “unreliable, as a general matter,” due to “inconsistencies in case definition,” which “limit[ed] the evidentiary value of the case reports to support an inference of causation.”
  67. In re Aredia & Zometa Products Liability Litigation, 483 F. Appx. 182 (6th Cir. June 5, 2012) (bisphosphonate drugs).  Affirming grant of summary judgment.  Expert testimony was properly excluded as unreliable because general causation expert admitted that he could not “establish causation [based on 2] case reports, but simply a ‘very close association.’”
  68. Rhodes v. Bayer Healthcare Pharmaceutical, Inc., No. 10–1695, 2013 WL 1289050 (W.D. La. Mar. 26, 2013) (Avelox).  Granting Daubert motion to exclude expert testimony because “reliance on adverse event reports is also unimpressive, as such reports do not demonstrate the requisite degree of reliability.”
  69. Klein v. TAP Pharmaceutical Products, Inc., 518 F. Appx. 583 (9th Cir. May 14, 2013) (Lupron).  Affirming exclusion of adverse event reports, as they “were hearsay reports of uncertain reliability, lacking information relevant to causation.”
  70. Trainer v. Sec’y of Health & Human Services, No. 10–865V, 2013 WL 4505803 (Fed. Cl. July 24, 2013) (hepatitis A vaccine).  Finding “no causal link” between” the product and the alleged harm where the claimant attempted to rely on case reports and anecdotal evidence because “there are too many unknown variables that make such raw information inherently unreliable.”
  71. Berman v. Stryker Corp., No. 11 C 1309, 2013 WL 5348324 (N.D. Ill. Sept. 24, 2013) (prosthetic knee).  Reliance on Manufacturer and User Facility Device Experience (“MAUDE”) medical device adverse event reports alone was inappropriate basis to infer causation are because “such reports can contain inaccurate and non-validated data,” and “[d]enominator data are missing which makes evaluation of the incidence or prevalence of reported events impossible.”
  72. DeGidio v. Centocor Ortho Biotech, Inc., 3 F. Supp.3d 674 (N.D. Ohio Mar. 11, 2014) (Remicade).  Excluding expert testimony under Daubert, where there was “no question that plaintiffs’' experts based their general-causation opinions solely on case reports” because “[c]ase reports make little attempt to screen out alternative causes for a patient's condition,”  and simply describe phenomena without comparison to background rates, either “in the general population or in a defined control group; do not isolate and exclude potentially alternative causes; and do not investigate or explain the mechanism of causation.
  73. Wirt v. Sec'y of Health & Human Services, No. 11–118V S, 2014 WL 1911421 (Fed. Cl. Apr. 18, 2014) (HPV vaccine).  Adverse event data alone, “without the opinion of a medical expert and/or medical records showing a causal connection between vaccination and injury, is not proof of a causal connection,” and is insufficient to establish that a product caused a particular disease.
  74. Chapman v. Procter & Gamble Distributors, LLC, 766 F.3d 1296 (11th Cir. Sept. 11, 2014) (Fixodent).   Affirming exclusion of causation testimony because reliance on “generalized case reports, hypotheses, and animal studies are insufficient proof of general causation,” because such information “could mislead the jury by causing it to consider testimony that was insufficient by recognized primary methodologies to prove using [denture cream] causes myelopathy.”
  75. In re Incretin Mimetics Products Liability Litigation, 2014 WL 4987877 (S.D. Cal. Oct. 6, 2014).  Denyinig generalized discovery of AER databases.  AERs lack medical controls and scientific assessment,  and are too unreliabile to justify the expense of production as relevant to causation.
  76. In re Denture Cream Products Liability Litigation, 2015 WL 392021 (S.D. Fla. Jan. 28, 2015) (Fixodent).  Case studies are not a reliable basis for an expert opinion on causation.
  77. In re Byetta Cases, No. JCCP 4574, slip op. (Cal. Super. Nov. 13, 2015).  ADEs are unvalidated and even plaintiff lawyers can submit them.  They are not particularly useful to establis causation.

Wednesday, May 26, 2010

Can’t Go Home, West Virginia

Those pesky state AGs, usually aided by the plaintiffs’ bar, are an increasingly important player in coordinated drug and device litigation. And there always seems to be something vaguely unfair about a state filing a parens patriae action in its backyard state court, and then waving the (state) flag about how the AG is simply protecting its poor, helpless citizens from evil companies.

Recently, the Eastern District of Pennsylvania saw through this ruse, and refused to remand a case brought by the West Virginia AG on behalf of premium cable subscribers in West Virginia. See State ex rel. McGraw v. Comcast Corp., __, F. Supp. 2d __, 2010 WL 1257639 (E.D. Pa. Mar. 31, 2010). West Virginia brought a parens patriae action in West Virginia state court under the West Virginia Antitrust Act and West Virginia Consumer Credit and Protection Act. Id. at *1. Comcast removed and got the case transferred to the ED Pa., where an MDL involving similar claims was already pending (just in case you’re wondering how an ED Pa. court got involved). Id. The basis of the removal? Comcast argued federal jurisdiction was appropriate under the Class Action Fairness Act (CAFA). Id. at *2. CAFA, of course, changed the diversity rules so that federal courts have jurisdiction over most class actions. Bravo for that.

The court agreed that West Virginia’s parens patriae claim was really just a class action in all but name, so the federal court had jurisdiction. The big question for the court: was the state of West Virginia the only real party in interest – in which case there is no federal jurisdiction – or were those premium subscribers also parties in interest? The AG argued that West Virginia was the real party in interest because it has a quasi-sovereign interest in the “health and well-being – both physical and economic – of its residents in general.” Id. at *3. Yeah, but West Virginia was bringing the lawsuit on behalf of premium subscribers – a “discrete group of citizens,” id. – kind of like when AGs bring parens patriae actions on behalf of those consumers who took a particular drug or used a particular device.

To answer the question of who was the real party in interest, the court went claim-by-claim and concluded:

1) The state is the real party in interest where it seeks injunctive relief or civil penalties, which simply go into state coffers, id. at *4;

2) The state is not the real party in interest when it seeks damages (or treble damages) on behalf of its resident-consumers, id. at *6.

And here, the complaint was “damning” because it spelled out loud and clear what the state was really trying to do – get money for the “aggrieved consumers” who had “incurred damages” and thus were entitled to “restitution and/or excess charge damages.” Id. at *7. As an aside, the court also noted that the state’s purported interest in protecting those poor, helpless consumers was belied by the fact that there were already a number of private class actions consolidated in an MDL, including one case filed on behalf of – you guessed it – premium cable subscribers in West Virginia. Id. Guess those consumers weren’t so helpless after all.

The West Virginia AG did not go down without a fight, arguing that:

(a) The state antitrust and consumer protection act statutes grant the state parens patriae standing to pursue such actions. Id. at *8. Great, but that does not mean the state is the only real party in interest. Id.

(b) The state statutes at issue aren’t procedural devices like Rule 23, so a parens patriae action brought pursuant to these statutes is not akin to a class action. Id. at *9. Great, but when it looks like a class action duck, and quacks like a class action duck, it’s close enough to satisfy CAFA’s liberal jurisdictional requirements, which are intended to cover not only class actions but “lawsuits that resemble a purported class action.” Id. (quoting some legislative history). Here, particularly where one of the statutes in effect required notice and an opportunity to “opt out,” and had res judicata implications as to any consumers who fell under the parens patriae umbrella, the state statutes were good enough for CAFA jurisdiction.

(c) Federal jurisdiction would violate West Virginia’s right to sovereign immunity under the Eleventh Amendment. Id. at *11. Great, but when the state is the plaintiff, the Eleventh Amendment is not implicated. Id. at *12.

(d) Federal jurisdiction would violate the state’s Tenth Amendment right to “prescribe regulations within its borders.” Id. Gold star to the AG for coming up with a creative theory. Take the gold star away for failing to find any case law to support the theory. Id.

All in all, a good result after a hard fight against removal. The court did invite further briefing on whether it should sever the injunctive relief and civil penalty claims and send them back to state court (since the state is a real party in interest with respect to those claims). Id. at *13. It will be interesting to see what the AG does next – voluntary dismissal, at least of those pendent claims? Voluntary dismissal of the whole shooting match, since the allegedly aggrieved consumers are already covered by the MDL class actions? Or push forward on multiple fronts, wasting taxpayer dollars in the process?

Tuesday, May 25, 2010

The New England Journal of Medicine strays far afield and gets lost

The New England Journal of Medicine bills itself as “the world’s most influential medical journal,” and it unquestionably publishes groundbreaking articles about medicine. But all too often in recent years the NEJM has strayed from what it knows -- medicine – into what it doesn’t – law and public policy, particularly tort policy. No longer content with editorials encouraging litigation against anyone but doctors, the NEJM now publishes public policy advocacy pieces dressed up as scientific studies, with the implicit suggestion that those studies should get the benefit of the NEJM’s good name in public policy debates.

The problem with straying so far from home is that you end up in places with unfamiliar customs and language. If you pretend to be an expert in unfamiliar territory, you say dumb things that show you don’t know what you are talking about. The NEJM did that when it published its recent “Special Report” on “Whistle-Blowers’ Experiences in Fraud Litigation against Pharmaceutical Companies.”

The purported “study” is really a summary of conversations with 26 people identified as whistleblowers in 17 federal qui tam cases against pharmaceutical manufactures that were settled between January 2001 and March 2009. Talk about a biased sample! No prosecutors, no pharmaceutical manufacturers, not even an unsuccessful whistleblower. These 26 qui tam relators each received a median net payment of $3 million after taxes from their suits. We imagine that might have colored just a bit what they had to say.

And the methodology – well, there doesn’t appear to be much. The study reads like a Hite Report for qui tam litigators. The authors’ method sounds like what any journalist would do to write a magazine article – you call up people and listen to their stories. The whistleblowers complained that it ain’t easy being a whistleblower: relationships are strained; retaliation happens. This sounds like lots of newspaper and magazine articles we have read over the years, or the plot of movies like “The Insider” and “The Informant!”

If this article had appeared in a regular magazine, one might read it and then move on to an in-depth interview with the latest reality television star. But the authors of this study published in the NEJM try to pass anecdotes off as science. They start with a section called “Study Methods,” which throws around a lot of jargon to make it sound scientific. The authors solemnly report that they “conducted individual, semistructured interviews with 26 (62%) of” 42 identified whistleblowers. We don’t know what a “semistructured interview” is but it sounds, at best, like a semiscientific method. The authors then report that “the interviews had a median duration of 40 minutes (interquartile range, 31 to 49 minutes . . . .” Using terms like “median” and “interquartile” sure makes this all sound precise and scientific, doesn’t it? It sounds to us like a fancy way of saying that the authors talked to people for about a half an hour to 45 minutes – but we aren’t scientists.

The study authors then say that they “analyzed the interview transcripts using the constant comparative method of qualitative analysis” and direct interested readers to “a detailed description of the study methods . . . in the Supplementary Appendix.” We’ll spare you the trouble of poring over that document. What it means is that somebody asked 26 people questions based loosely on a script (remember, they are only semistructured interviews) and counted up what they said. If the editors of the NEJM who published this article think that this is science, then we should not be surprised if they nominate Andrew Wakefield for the Nobel Prize in Medicine.

The Special Report then provides some familiar anecdotes of the difficulties of being a whistleblower. Again, this is the stuff we’ve read in numerous magazine articles, although a good magazine editor would omit some of their selected details: “a typical day could be meeting an FBI agent in a parkway rest stop. Sitting in his car with the windows rolled up. Neither heat nor air conditioning.” Special Report at 1836. Wow.

More problems come when the authors move from telling occasionally banal stories to trying to analyze the “data” to come up with “findings.” Despite their pretensions to scientific methods, there is no real statistical analysis of the data. They simply count up how many of the 26 people said various things. We could have done that.

The authors conclude that only six relators “specifically intended” to bring qui tam lawsuits, and the other 20 “fell into the qui tam process” after talking to lawyers on other issues or after being encourage to file suit by family or friends. Id. at 1834. The authors then make a “finding” that many relators became qui tam litigators “accidentally.” Id. at 1837. As lawyers, we know it’s pretty hard to file a lawsuit accidentally. And the study authors must have a curious view of intent to conclude that an action taken voluntarily and after carefully consideration is “accidental” because the actor was urged to take the action by family, friends, or lawyers. If so, then millions of people went to school, took jobs, and got married “accidentally.” Try that argument at home to excuse some dumb thing you did – “But it was accidental, dear, my friends urged me to do it” – and see how far that gets you.

Then there’s the authors’ credulity. They report: “Every relator we interviewed stated that the financial bounty offered under the federal statute had not motivated their participation in the qui tam lawsuit.” Id. at 1834. Right. Anyone with an ounce of common sense would not believe that the relators’ true motivations are so pure. This conclusion demonstrates the pitfalls of taking everything an already biased sample produces at face value. Garbage in, garbage out, as they say.

But the authors don’t even draw the logical conclusion from what their data is telling them. Assume (solely for the sake of argument) that these 26 successful qui tam plaintiffs are being honest. Then the qui tam system urgently needs revision. We’re wasting millions that could be benefiting us as taxpayers. Obviously, these relators didn’t need the millions of dollars they received to motivate them to bring qui tam lawsuits. All that money can go back to the taxpayers or, better yet, our clients, the pharmaceutical companies.

Speaking of money, the authors’ discussion of “financial bounty” is rather ironic because their financial disclosure form states that the lead author, Aaron S. Kesselheim, served as an expert witness against Merck in the Vioxx litigation and received money from a grant funded by the settlement of a fraud case regarding the promotion of Neurontin. We are sure that Dr. Kesselheim would state as convincingly as his 26 subjects that “the financial bounty offered [by his expert fees and grant] had not motivated [his] participation in this [article],” but others might think that he has an axe to grind against Big Pharma. We’ve warned before that plaintiffs’ experts and peer review don’t mix, and this is a good example.

If this article had simply stopped with recounting the subjective experiences of 26 successful qui tam relators, we might have dismissed the article as a harmless collection of anecdotes and statistically insignificant conclusions, a bad but largely inconsequential lapse in editorial judgment by the NEJM. But the Special Report then goes on to offer policy recommendations about changing the entire qui tam system based solely on what that biased sample has to say.

What a great idea – deciding important public policy questions based only on a few interviews of one of many interested groups. Maybe someone will follow this NEJM-approved “scientific” approach to public policymaking and make serious proposals to reform the nation’s regulation of doctors based solely on 30 to 45 minute interviews of 26 successful medical malpractice plaintiffs. Somehow we doubt that the NEJM would publish that article, even if its science was every bit as good as the “science” in the Special Report.

In addition to being based only on the views of a small sample of extremely interested parties, the policy recommendations also betray a serious lack of knowledge of the qui tam system. It is fundamental to public policy analysis that you have to understand a system before making recommendations to change the system, but the Special Report authors apparently don’t understand the qui tam system. Nor, apparently, do the NEJM editors or peer reviewers, or else they wouldn’t have published this piece. The Special Report states: “[T]he FCA does not distinguish between relators outside and inside the defendant company, whereas we found that insiders tended to contribute much more to the Justice Department investigation and suffered more for their involvement. Such factors should be taken into account in determining compensation.” Special Report at 1838. But you can’t judge what the FCA takes into account solely by interviewing relators; you have to analyze the laws, Department of Justice guidelines, and case law. Although we spend most of our time on product liability cases, we know enough about the qui tam system to understand that the existing qui tam system clearly and unequivocally takes these factors into account.

Specifically, a key factor in determining compensation is the relator’s contribution to the investigation, and if insiders contribute more to an investigation, that factor will be considered in awarding compensation. The FCA specifically provides that “the extent to which the [relator] substantially contributed to the prosecution of the action” is a factor in awarding compensation. 18 U.S.C. § 3730(d)(1). And the Department of Justice’s Relator’s Share Guidelines, which the DOJ has used since 1996 to determine compensation, state that compensation should be higher if the relator “provided extensive, first-hand details of the fraud to the Government” and “provided substantial assistance during investigation and/or pretrial phases of the case.” Far from ignoring whether insider relators “suffered more for their involvement,” the Relator’s Share Guidelines state that compensation should be higher if “the filing of the complaint had a substantial adverse impact on the relator.” And courts also have considered whether relators suffered from their involvement in awarding compensation. See, e.g., United States ex rel. Anderson v. Quorum Health Group, Inc., 171 F. Supp. 2d 1323, 1337-38 (M.D. Fla. 2001); United States ex rel. Burr v. Blue Cross & Blue Shield of Fla., Inc., 882 F. Supp. 166, 169 (M.D. Fla. 1995) (“A relator may be entitled to the statutory maximum percentage in situations where the relator has suffered personal or professional hardship.”). Somehow, this whole subject strikes us as beyond the NEJM editorial board’s sphere of professional competence.

It gets worse. Based on interviews with participants in cases that settled from 2001 to 2009 (and whose relevant experiences with retaliation must stretch back into the 1990s), the Special Report further recommends “broadening the scope, or strengthening the penalties, of the antiretaliation provisions,” particularly for insiders and those make internal complaints. Id. at 1839. These recommendations ignore existing antiretaliation provisions and how Congress broadened the scope, and strengthened the penalties, of the antiretaliation provisions during the time period studied by the authors.

Again, here are some of the specific facts ignored by the study authors. In 2002, Sarbanes-Oxley augmented existing antiretaliation protections by adding 18 U.S.C. § 1513(e), which punishes criminally “interference with the lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any Federal offense.” Sarbanes-Oxley also added extensive private civil remedies for whistleblowers in publicly traded companies, which allow a whistleblower to file a complaint with and receive full relief from the Secretary of Labor and to file a complaint in federal court. 18 U.S.C. § 1514A. Contrary to the Special Report’s suggestion that there are inadequate protections for whistleblowers who make internal reports, section 1514A specifically protects from retaliation employees who report misconduct within the company.

It would seem to be pretty elementary science that if you are going to draw any conclusions about something you are studying, you need to consider and account for changes to the system during the study period. Public policy analysis would tell you the same thing. Although we might expect that the NEJM wouldn’t care much about public policy principles, you would think that the NEJM would insist that its articles show some fidelity to scientific principles. But no; the NEJM article ignores this fundamental change to the antiretaliation protection smack in the heart of the time studied and never considers whether retaliation problems lessened after antiretaliation provisions were strengthened. This is like studying the liver disease of a patient population without accounting for half of them becoming alcoholics in the middle of the study period – or like surveying patients about medical records privacy experiences during the past 30 years while ignoring HIPAA. No one would or should take the recommendations of either study seriously.

The Special Report concludes by acknowledging some limitations. “Response to some queries, such as motivations and the role played by the prospect of financial gain, may reflect a socially desirable response bias.” Special Report at 1839. Duh. In other words, the responses may not be true. The authors further acknowledge that their “findings represent the subjective experiences that whistle-blowers were willing to report in interviews.” Id. In other words, their responses don’t give us the whole truth, either. After admitting that (1) their subjects could have lied in what they said, (2) their subjects could just as easily be concealing things, and (3) only those biased 26 subjects – and therefore not any other stakeholder in the qui tam process – were consulted, the authors nonetheless conclude: “Notwithstanding these limitations, our findings suggest that changes to the FCA and qui tam process that mitigate relators’ hardships may help promote responsible whistle-blowing and enhance the effectiveness of this integral component of efforts to combat health care fraud.” Special Report at 1839. No, no, no, no. Any good doctor, social scientist, or public policy expert will tell you that if a study has such severe limitations, you can’t make credible “findings” about the phenomenon being observed, nor should you recommend a course of action. It certainly makes no sense to suggest changing an entire system based only on the subjective views of a biased sample and without understanding either the system or the views of all the other interested stakeholders.

And that’s the problem with this venture by the NEJM into an unfamiliar public policy arena. The NEJM has published an article cloaked in the trappings and jargon of scientific research, and most readers would conclude that an article in the NEJM is based on science. The Special Report isn’t science or even intelligent design; it is simply a collection of anecdotal interviews and deserves no more weight than that – and probably less, given the blatant selection bias. Our real problem is that the NEJM is misusing the credibility it has quite legitimately obtained as “the world’s most influential medical journal” by putting its good name on public policy pieces that are neither scientific nor remotely about medicine. The NEJM should stick to what it does best – medicine – or risk tarnishing its reputation as a respected medical journal.

Latest Supreme Court Preemption Moves

Yesterday, the Supreme Court granted cert. in Williamson v.. Mazda, No. 1314, a preemption case involving the 1966 Federal Motor Vehicle Safety Act.  This was the case where Elena Kagan, as SG signed a blistering anti-preemption amicus brief at the petition stage, asking that the Court grant the writ, limited to the first question ("Whether the [Act] or [FMVSS] 208 preempts a state common-law tort claim that an automobile manufactured in 1993 was defectively designed because it lacked a Type 2 (lap/shoulder) seatbelt in one of its seating positions?").  That's precisely what the Court did.  Williamson will decide the continuing reach of Geier v. American Honda Motor Co., 529 U.S. 861 (2000), a 5-4 case concerning preemption of "no-airbag" claims, and more generally implied preemption, in the wake of the Levine case.

The Court also invited the SG to "express the view of the United States" in the Mensing case (Supreme Court Nos. 09-993, 09-1039.  That means that the Court has at least some interest in the preemption issues presented by generic drug manufacturers.  Our preemption scorecard briefly summarizes the prior result in Mensing:
Mensing v. Wyeth, Inc., 588 F.3d 603 (8th Cir. Nov. 27, 2009), finding no preemption of warning claims in case involving generic metoclopramide.  Regardless of CBE requirements the common law could impose a duty upon generic drug manufacturers to alert the FDA and to seek a stronger warning for both generic and brand name labeling or to have the agency issue a "Dear Doctor" letter, in light of evolving knowledge.  Nothing in Hatch-Waxman evinces a congressional intent to preempt state law.

Monday, May 24, 2010

Wakefield Struck Off the Medical Register

The infamous Andrew Wakefield, author of the fraudulent Lancet article purporting to link vaccination with autism, has had his medical license revoked in the UK, according to the BBC.  Good riddance.  Now, if only American medical boards could show some similar spine.

Novel Rulings on Expert Testimony

"It was the best of times, it was the worst of times." We know it's hackneyed to pull out the Tale of Two Cities quote, but it does seem to describe what's happened over the last few weeks when it comes to expert testimony. A couple of weeks ago in the Trasylol litigation the court did a heroic job in excluding testimony from plaintiff repeat expert Parisian. A week or so later we got the abominable opinion in the Gadolinium MDL, where the court cut back on defense expert testimony right and left (and wrong and wronger) while pretty much permitting plaintiff experts to run roughshod over the entire 700 series of the Fed. R. Evid. (We know lawyers who were on the winning side in one case and the losing side in the other. They now have to puzzle through how to argue for appealability in one but not the other.)

More recently we saw some expert admissibility rulings in a Neurontin suicide case, Smith v. Pfizer, Inc., 2010 U.S. Dist. LEXIS 47698 (M.D. Tenn. May 14, 2010). The rulings addressed objections to expert statements on the eve of trial. These objections were lodged after the time for Daubert challenges or motions in limine, so the court was free to punt on several issues ... which it did. But it also issued a number of rulings worth reviewing. (By the way, it appears that the case settled a couple of days after the court's rulings. Coincidence?)

Here are some of the more interesting rulings:

- The expert's own clinical experience
We love having our experts talk about their own clinical experience because they are so familiar with it, it humanizes the experts in the eyes of the jury, and, let's face it, it's a lot harder for the other side to cross-examine on it. The Smith court was generally receptive to testimony about clinical experience, but excluded one defense expert's statement that he had never seen anything in any of his patients suggesting that Neurontin caused depression or suicidal thoughts. The court concluded that such testimony was more prejudicial than probative. Smith, 2010 U.S. Dist LEXIS 47698, *11. Really? If it's true, it's true. How is that prejudicial? It's like the criminal defense lawyer objection we used to hear: "Objection, your Honor; prejudicial - tends to show guilt." Here, such testimony tends to show lack of causation and should have been admissible.

- Foreign regulatory rulings
Here it was the defendant that wanted one of its experts to testify that Neurontin had been approved in some European countries for treatment of general neuropathic pain. The court excluded such testimony because it was tangential and would be prejudicial "without testimony regarding the standards employed by those European regulatory agencies." Smith, 2010 U.S. Dist. LEXIS 47698, *8. We have dealt with this issue before, and thus have no comment on the rightness or wrongness of the ruling in the Smith case, but we note that in most cases it is the plaintiffs who seek to introduce foreign regulatory events (e.g., another country insisted on a stronger warning, or refused to approve the drug at all) so the court's ruling excluding foreign regulatory actions will end up being a useful precedent for many of our cases.

- Narration of company documents
Both sides employed experts who bolstered their opinions by describing company documents. Plaintiffs seemed more ambitious in this area, and were playing the usual gambit of using their experts as document delivery devices. They pick out a couple of documents that sound bad and then say something like, "Jeepers, that's Bad! And I'm an expert on Bad." The Smith court generally decided that narration of company documents was permissible to the extent needed to supply "context." Smith, 2010 U.S. Dist. LEXIS 47698, *31. What was "context" and what was hooey presumably would have been sorted out at trial. Many of the rulings in this category related to plaintiff's expert Cheryl Blume, who was typically overbroad, aggressive, and purporting to be omniscient in her proposed statements. The court excluded her "improper state-of-mind testimony" about how certain documents reflected the company's true intent. Based on our experience, that would excise a big chunk of her testimony. The court also forbade Blume from engaging in some astonishing bits of over-the-top advocacy such as "So, don't believe the defendants if they claim that they ever warned for 'suicide' during Mr. Smith's life." Id., *37. Now that's prejudicial testimony. Of course, the problem with experts such as Blume is that they'll find ways to load their testimony with these types of goodies no matter what the court rules. What made the Trasylol ruling so brilliant was the court's recognition of this fact regarding Parisian. But such a ruling takes experience, insight, and guts.

- Litigation-created chart
Plaintiff's attorneys put together a couple of charts and then put those charts in Blume's proposed testimony. One problem: Blume played no part in creating those charts and "admitted that she had not verified the work and is incapable of verifying the work." Accordingly, the court excluded Blume's testimony on those charts. Id., *34-36.

- 61 homers
One of plaintiff's experts was Ronald Maris, a psychiatry professor. (On our own, we learned that he has a website called We are not making that up.) Dr. Maris proposed to inform the jury that, for liability, "[a]ll that is required is that Neurontin was one of the causes of Richard Smith's suicide, not the only cause. It was a necessary, but not sufficient condition for his suicide." Id., *22. That's right: plaintiff's expert basically wished to instruct the jury on legal causation, which is a no-no . Thanks very much for the offer, says the court, but "[i]t is the job of the court, not an expert witness, to instruct the jury regarding the applicable law." Id. If courts applied this simple, irrefutable concept more diligently, so much of what plaintiff experts endeavor to say regarding adequacy of warnings or appropriateness of marketing would simply vanish. Oh, and the court would not let Dr. Maris say that he was "distantly related to the baseball player" - with or without an asterisk. Id., *20.

The rulings in the Smith case are a mixed bag. Some of that is a function of the last-minute nature of the objections and rulings. But there's more good than bad in this mixed bag. And, in fact, expert rulings in general in drug and device litigation are a mixed bag. There's not a whole lot of consistency out there on expert testimony. As courts acquire more experience with expert issues in drug and device cases, and perhaps more importantly, with the plaintiff experts who play the same old games, maybe the rulings will start to coalesce around some core of common sense.

To quote the last line of another novel, "Isn't it pretty to think so?"

Friday, May 21, 2010

People Who Live In Glass Houses....

There's already been lots posted about the FDA's "Transparency Initiative" elsewhere, so we won't go into any depth at this point - we're litigators, not regulatory types.  We'd just like our viewers to note that many of the FDA's 21 proposals could have significant litigation effects.

For example, number 1 could result in a searchable database of anecdotal adverse event reports that would allow plaintiffs' experts to generate "summary reports" - seemingly bearing the FDA's imprimatur - with the push of a few buttons (with no mention of segregating out litigation generated AERs).  There's supposed to be some sort of "disclaimer," but we question if it will be as strong as what the FDA said back in 1996:  "Accumulated ADE cases may not be used to calculate incidences or estimates of drug risk."

Nos. 8 & 10 would provide public information of all pending investigational and marketing applications, including "intended uses."  This includes ANDAs.  Everyone's competitors would then know what's in the pipeline and would be able to throw spanners in the works.  If you think the pioneer/generic wars are bad now, imagine how they'll be when everyone knows exactly what applications are pending for what.

With every FDA regulatory letter (No. 21), inspection report (No. 6), and adverse application decision (Nos. 13-15) becoming instantly public, imagine the new litigation solicitation opportunities available to the other side (expanding to anything that goes wrong during clinical trials, for one thing).

The FDA also wants to create broad "public health" and "correct misleading information" exceptions to the confidentiality of summary safety and effectiveness data in pending applications (No. 16).  So if the FDA thinks regulated person has said something "misleading," it will now be in a position to impose the punishment of releasing that person's confidential data.  Great chilling effect, that.  FDA even wants to talk about releasing "non-summary" data - that's right, raw research data - from pending applications (No. 17).

Fortunately, there's a 60-day comment period before any of this can move ahead.  Anybody who has comments - and we can't imagine any FDA regulated manufacturer, importer, or participant in clinical trials who isn't threatened in some way by this - be sure to get them in by July 20, 2010.

Thursday, May 20, 2010

ALI, Unjust Enrichment And Prescription Drugs

With Herrmann in-house and retired (from blogging, at least), only one of us is currently a member of the American Law Institute (“ALI”).  That said, Bexis headed down to DC yesterday to attend the ALI’s annual meeting.

With the Aggregate Litigation Project now done, we’re finding the Institute’s meetings less white-knuckle than they used to be – but that’s not to say that they’re boring.  Rather, there’s always something interesting going on when the ALI gets together.

Which means there’s something worthwhile to blog about.

This time it was the wrapping up of another ALI project – one that’s been going on for over a decade (since 1997)  – the Restatement (Third) of Restitution and Unjust Enrichment. The last part of this project was brought to a final vote yesterday.  It passed.  True, the ALI grinds slowly, but its final product is finer than anything you’ll find just about anywhere.

One of the things that means is that a lot of the … umm, that’s quite a mouthful so we’ll just call it the “R3RUE” for short … was finished well before Bexis ever joined the ALI.  Talk about being late to the party.  But not knowing what went on has never stopped Bexis from putting his two cents in before, and it didn’t this time.

That last chunk of the R3RUE that was up for discussion included “defenses to restitution” – leading off with the most basic:  §62 entitled “Recipient Not Unjustly Enriched.” This defense was described in the draft:

The defense stated in §62 may appear redundant. If a well-pleaded complaint alleges unjust enrichment, it must be a proper answer (and not an affirmative defense) to plead “no unjust enrichment.” . . .[T]he practical application of the present rule is to a more limited class of cases. These arise when the claimant alleges facts supporting a prima facie claim in unjust enrichment . . . but the recipient is able to show that the resulting enrichment is not unjust, in view of the larger transactional context in which the benefit has been conferred.
R3RUE §62, comment a, Tentative Draft No. 7 (March 10, 2010).

That got us (well, Bexis) interested when he read it on the train down to DC early yesterday morning.  There’s a set of recent cases in prescription drug product liability litigation that seem to fit into the pattern described in this part of the R3RUE.

What’s more, none of the illustrations – most of which had to do with payments of one sort or another made under some mistake of law or fact – involved anything similar to these much newer prescription drug cases.

Here’s what was up.

Over the last few years (sufficiently recently that the original 2004 edition of Bexis’ book didn’t even include a section on unjust enrichment) plaintiffs in various prescription drug and medical device litigations have started tossing in “unjust enrichment” claims.  This type of claim has been more frequent in economic loss class action litigation, but it's hardly unique to it.  Most of these unjust enrichment claims get dismissed, and one of the recurrent reasons for dismissal seems like it would fit under R3RUE §62.

Specifically, courts have held that – even assuming a drug was “illegally” marketed for an off-label use or “improperly” marketed without adequate warnings – there can’t be unjust enrichment where the drug, when taken by a particular plaintiff, in fact proved effective and didn’t cause any sort of personal injury.  That scenario appeared to fit into the “larger transactional context” rubric of §62

That’s because, as the Eighth Circuit recently explained, plaintiffs in this situation actually got what they paid for – regardless of any marketing-related allegations that might otherwise have allowed a plaintiff to plead the elements of a unjust enrichment cause of action:

[A]n unjust-enrichment plaintiff must show receipt of a benefit and unjust retention of the benefit at the expense of another.  There is no question that [the defendant] received a benefit when [plaintiff] purchased [the drug]. The issue is whether retention of that benefit was unjust.  We find that it was not.  The record illustrates not only that [plaintiff’s] cholesterol level fell after he took [the drug], but, as our analysis in the previous section demonstrates, that there is no competent medical evidence showing that [plaintiff] suffered any harm as a result of taking [the drug].  Thus, he received the benefit of his bargain. In light of this, we affirm the district court's grant of summary judgment on [plaintiff’s] unjust-enrichment claim.
Baycol Products Litigation, 596 F.3d 884, 892 (8th Cir. 2010) (applying California law) (citations omitted) (emphasis added).

The same result was reached in Prohias v. Pfizer, Inc., 490 F. Supp.2d 1228 (S.D. Fla. 2007).  Again, the drug that the plaintiffs took proved effective and did not cause them any harm.  Bye-bye unjust enrichment claims.  As to these individual plaintiffs – they received the benefit of their bargains:

[Plaintiffs] fail to state a claim for unjust enrichment.  Both men purchased a cholesterol reducing drug, and both men obtained cholesterol reduction as a result.  Therefore, in a general sense, they obtained the benefit of their bargain.  Unjust enrichment cannot exist where payment has been made for the benefit conferred.  Still, [plaintiffs] claim that they would not have purchased [the drug] but for the misleading advertisements.  But their argument is too little too late-they have already received the benefit from taking [the drug], even if they now claim that they do not want that bargain.
Id. at 1236 (emphasis added).  As to the third-party payor plaintiff:

[Plaintiff] paid for a cholesterol-reducing drug for its beneficiaries, and its beneficiaries . . . received the benefit of reduced cholesterol.  Under these circumstances, it is not inequitable for [defendant] to retain the price of [the drug] paid by the [plaintiff].
Id. (applying Massachusetts, Pennsylvania, and Florida law).

In a similar New Jersey case, the court observed (in the context of a different claim) that the plaintiffs “fail to assert that the Subject Drugs were ineffective, unsafe, or somehow worth less than what Plaintiffs paid for the drugs.  Instead, Plaintiffs have merely alleged that the Subject Drugs were not FDA approved for certain conditions.”  In re Schering-Plough Corp. Intron/Temodar Consumer Class Action, 2009 WL 2043604, at *13 (D.N.J. July 10, 2009).  Those same failures of proof also doomed plaintiff’s unjust enrichment claim. “Plaintiffs have neither pled a cognizable injury nor a direct relation between Plaintiffs’ injury and [defendant’s] alleged misconduct.”  Id. at *34.

A New York state court said the same thing.  In Baron v. Pfizer, Inc., 840 N.Y.S.2d 445 (N.Y. App. Div. 2007), the court found no cognizable injury where the plaintiff claimed to have taken a drug for an off-label use and demanded “a refund of the purchase price . . . on the ground that she would not have purchased the drug absent defendant’s deceptive practices.”  Id. at 448.  Plaintiff failed to allege “that use of the product adversely affected [her] health” and the court “note[d] that plaintiff failed even to allege . . . that [the drug] was ineffective to treat her neck pain.”  Id.  That didn’t make out (among other things) a claim for unjust enrichment:

We similarly conclude that plaintiff's unjust enrichment claim was properly dismissed. . . .  Inasmuch as plaintiff makes only conclusory allegations that defendant's deceptive acts played a role in her use of [the drug], without alleging that her physician’s decision to prescribe the drug was influenced by defendant or that the drug was ineffective to treat her, she has failed to allege that defendant is in possession of money belonging to plaintiff and her claim was properly dismissed.
Id. at 448-49.   Cf. In re Zyprexa Products Liability Litigation, 671 F. Supp.2d 397, 456-58 (E.D.N.Y. 2009) (unjust enrichment could not be established without evidence that off-label use of drug was not medically necessary); In re Viagra Products Liability Litigation, 658 F. Supp.2d 950, 969 (D. Minn. 2009) (given “derth of evidence” that drug was harmful, there was no evidence of anything “unjust”).

Anyway, Bexis was thinking of these cases (the off-label promotion ones, at least) when shortly before lunch, he stepped to the microphone and brought to the ALI reporter’s attention that this a new line of cases might be worth considering as a current illustration of the application of the principle stated in R3RUE §62.

The response was that, because off-label use involved “illegal” behavior, perhaps these cases were more an application of the “Illegality” section stated in R3RUE §32.

Well, that certainly put Bexis in his place.  Section 32 wasn’t in the materials for the 2010 meeting, and it may have been adopted before Bexis was even elected to the ALI.  Could this line of cases fit in there?  Dunno.

Fast forward a day or so.  It turns out that R3RUE §32 is on Westlaw.  Sure enough, it’s dated 2004 – the year before Bexis became an ALI member.  Anyway, §32 deals with contracts that are themselves illegal, like gambling or racially restrictive covenants:

A person who renders performance under an agreement that is illegal or otherwise unenforceable for reasons of public policy may obtain restitution from the recipient in accordance with the following rules:

(1) Restitution will be allowed, whether or not necessary to prevent unjust enrichment, if restitution is required by the policy of the underlying prohibition.

(2) Restitution will also be allowed, as necessary to prevent unjust enrichment, if the allowance of restitution will not defeat or frustrate the policy of the underlying prohibition.  There is no unjust enrichment if the claimant receives the counterperformance specified by the parties’ unenforceable agreement.
R3RUE §32, Tentative Draft No. 3 (emphasis added).

Initally it didn't look like a particularly good fit.  Section 32 mostly seems to address the situation where object of the contract being performed is itself illegal (a contract to commit a crime, an illegal contingent fee, a gambling loan, a bribe).  These aren’t illegal drugs we’re talking about.

That off-label use is legal was settled in Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001).  Even assuming illegal promotion of the drug, the use of it is legal.  Doctors can prescribe off-label, and patients can use them, perfectly legally.  A purchase of a drug prescribed for an off-label use (assuming the sale occurred because of illegal marketing) is itself no more illegal than – say, an employment agreement where the parties originally met through the auspices of a “Help Wanted – Male” want ad that’s a form of illegal sex discrimination.

But we're nothing if not persistent.  Turns out, that there's some stuff in R3RUE §32 that works.  In particular, there’s comment e, concerning “regulatory violations”:

Where the illegality of the underlying transaction consists in a failure to satisfy regulatory requirements, the fact of noncompliance – with rare exceptions – will not be evidence of the moral turpitude or inequitable conduct that forecloses a claim in restitution by the rule of subsection (3).  Restitution is accordingly available in regulatory cases, by the rule of this Restatement, unless the court concludes that the allowance of restitution would defeat the policy of the regulation in question.
That certainly fits the off-label situation – but it’s backwards.  The restitution plaintiffs in the Baycol/Prohias, etc. line of cases aren’t the drug companies accused of some sort of improper marketing.  Rather, they're the defentants.

So we turn to the language in R3RUE §32(2) that we highlighted above – “There is no unjust enrichment if the claimant receives the counterperformance specified by the parties’ unenforceable agreement.”  That’s not exactly the same thing, but it’s getting closer.  In the cases discussed above, the ones Bexis mentioned at ALI, at least this part of §32(2) has the transaction running in the right direction.

So we keep looking….

Here it is!  Comment f:  “Illegality as a Sword.”  That’s what these plaintiffs are doing.  They’ve gotten – or in the case of a third-party payer, paid for – a drug allegedly because of improper marketing.  After the drug has been consumed, they’re trying to void the contract retroactively to either get the drug for free or at a cut rate.

What does the R3RUE have to say about that?  Here’s what.

In litigation between the parties to an illegal [which off-label use really isn’t] transaction, the illegality may be asserted defensively . . . or offensively, by the performing party, who repudiates the transaction and seeks to recover the performance or its value. . . .  So long as the defendant’s obligation of performance remains executory, restitution is ordinarily available . . . .  [W]here the defendant’s obligation has already been performed, it is the allowance of the claim in restitution (rather than its refusal) that will result in forfeiture, penalizing the defendant rather than the claimant.  In this setting, moreover, the claimant will rarely be able to demonstrate that the alternative to restitution is the unjust enrichment of the defendant.

If the prohibited transaction has been completed on both sides, restitution will nevertheless be available in cases governed by subsection (1), because the remedy in such cases is independent of unjust enrichment. . . .  Where by contrast the claim to reverse a completed exchange depends on a showing of unjust enrichment - a requirement of any claim brought under subsection (2) – restitution will typically be denied. See Illustration 22.


* * * *

22. Tenant sues former Landlord seeking restitution of rent paid for the occupancy of Blackacre under an expired lease, on the ground that Landlord failed to register Blackacre as rental property as required by ordinance.  There is no claim that Landlord failed to perform his obligations under the lease.  The regulatory illegality might or might not have afforded Tenant a defense to Tenant’s obligation to pay rent, but these facts present a different question.  Tenant has no claim to restitution of rent previously paid because Landlord has not been unjustly enriched.
(Emphasis added).

So the Baycol/Prohias line of cases could indeed fit into Restatement §32, comment f.  Indeed, for cases that, like Baycol, only involve allegations of marketing with inadequate – not illegal – labels should be barred a fortiori (that’s legal Latin for “even more”).

Putting these recent unjust enrichment decisions into the context of the Restatement first requires the assumption (which we think is simply wrong) that the “illegality” of off-label promotion somehow infects all subsequent purchases of the drug.  Given that off-label use is itself legal, we don’t think even that is warranted.  But assuming that arguendo, the plaintiffs – whether the actual users or their third party payers – are thus suing over a “completed exchange” as discussed in comment f.  That means that, in return for the payments that the plaintiffs are trying to recover, the defendant already provided its prescription drug, which has already been delivered and (presumably) consumed.  In that situation, comment f points out, “the claimant will rarely be able to demonstrate that the alternative to restitution is the unjust enrichment of the defendant.”

Moreover, as pointed out in cases such as Talley v. Danek Medical, Inc., 179 F.3d 154 (4th Cir. 1999), off-label use is merely a matter of licensing:

The administrative requirement that a given [product] be approved by the FDA before being marketed – as opposed to a specific substantive requirement that [it] be safe and effective – is only a tool to facilitate administration of the underlying regulatory scheme. Because it lacks any independent substantive content, it does not impose a standard of care.
Id. at 161.  Thus the “regulatory violations” rationale of comment e comes into play.

Off-label marketing does not affect the intrinsic safety of the product.  All the cases we’ve cited above involve plaintiffs who have not been injured by the drug in any way, and for whom the off-label drugs were, in fact, effective.  Given those facts, the new R3RUE puts this sort of claim squarely under §32(2), comment e, and Illustration 22 about the improperly "registered" Blackacre.  Where the plaintiffs aren’t hurt, and the drug is effective, the “illegal” marketing can’t be properly invoked as a sword.  Rather, it’s just as the courts have stated: The plaintiffs got what they bargained for.

The bottom line – we don’t have any problem with the R3RUE.  We’ve figured out that it’s quite possible to fit this new line of cases into it.  We’re just afraid that, with the amount of time that it took to craft the final product, the Third Restatement might become obsolete before it’s even published.

The reporter (Prof. Andrew Kull) complained several times yesterday that about so many of his illustrations were really old and based on out-of-date cases and fact patterns.  Well, in this one instance, that doesn’t have to be true.  There’s a brand new line of cases – generated by a litigation trend that postdates the origin of the R3RUE project – that provides an appropriate illustration.  Maybe it belongs under §62 or maybe it belongs under §32, but we think it belongs.