Justia U.S. 6th Circuit Court of Appeals Opinion SummariesArticles Posted in Drugs & Biotech
In re National Prescription Opiate Litigation
The counties filed suit in the Northern District of Ohio against manufacturers and distributors of prescription opioids. More than 2,700 other opioid cases have been transferred there by the Judicial Panel on Multidistrict Litigation (MDL). The first Case Management Order put the Counties’ cases on “Track One,” with a March 2019 trial date, setting a deadline in April 2018 for the Counties to amend their complaints. The Counties then asserted claims against 12 Pharmacies as “distributors” of pharmaceuticals to their own retail pharmacies, expressly declining to bring "dispenser" claims. Distributors ship pharmaceuticals wholesale; dispensers fill prescriptions. The Track One parties engaged in massive discovery.Rather than ruling on summary judgment motions, the district court granted the Counties’ motion to sever all but one Pharmacy (Walgreens) from Track One. Trial had been rescheduled for October 2019. The 11 Pharmacies settled with the Counties, agreeing to pay $260 million. The district court canceled the trial, then allowed the Counties to amend their complaints to add “dispenser” claims and ordered discovery to proceed anew. The court refused to rule on dismissal motions and ordered the Pharmacies to produce data on every prescription that they had filled for any opioid medication, anywhere in the U.S., dating back to 2006. The Sixth Circuit ordered that the amendments to the complaints be stricken, noting that the Federal Rules of Civil Procedure apply in MDL under 28 U.S.C. 1407 and had been disregarded in several instances. View "In re National Prescription Opiate Litigation" on Justia Law
In re National Prescription Opiate Litigation
About 1,300 public entities sued manufacturers, distributors, and retailers of prescription opiate drugs to recover the costs of health problems caused by the opioid crisis. Plaintiffs subpoenaed the U.S. Drug Enforcement Agency’s ARCOS database, a “comprehensive drug reporting system which monitors the flow of DEA controlled substances from their point of manufacture through commercial distribution channels to point of sale or distribution at the dispensing/retail level.” The district court noted that the ARCOS data “are not pure investigatory records compiled for law enforcement purposes, [but] simply business records of defendants; . . . the database does not include any additional DEA analysis or work-product” and concluded that Plaintiffs’ request was reasonable. The court permitted pleadings and other documents to be filed under seal or with redactions, refused a request to disclose the ARCOS data to the media, and entered a protective order.The Sixth Circuit vacated. The district court never made a finding that Defendants or the DEA made “a particular and specific demonstration of fact” justifying the Protective Order. The court expressed concern that the district court may have wanted the threat of public disclosure to motivate settlement discussions. On remand, the court may consider why pieces of ARCOS data related to specific ongoing investigations should not be disclosed but cannot enter a blanket, wholesale ban on disclosure pursuant to state public records requests. No modified protective order may specify that the ARCOS data be destroyed or returned to the DEA at the conclusion of litigation. The court must reconsider each pleading filed under seal or with redactions and make specific determinations as to the necessity of nondisclosure. View "In re National Prescription Opiate Litigation" on Justia Law
Dougherty v. Esperion Therapeutics, Inc.
Esperion has never generated any revenue, relying solely upon investor funding. Esperion’s sole focus is the development of ETC-1002, a first-in-class oral medication for lowering LDL “bad cholesterol,” a significant risk factor in cardiovascular disease. Esperion hopes to market ETC-1002 as an alternative treatment for statin-intolerant patients and as an add-on for patients are unable to reach their recommended levels using statins alone. In 2015, Esperion had completed several clinical studies and reported that ETC-1002 was well-tolerated and demonstrated significant average LDL-cholesterol reductions. After a meeting with FDA officials regarding Phase 3 of the approval process, Esperion published a press release, stating that “[b]ased upon feedback from the FDA, approval of ETC-1002 in [specific] patient populations will not require the completion of a cardiovascular outcomes trial,” with cautionary language, suggesting that “Esperion may need to change the design of its Phase 3 program once final minutes from the FDA meeting are received.” Market reaction was mostly positive. Following its receipt of the final FDA minutes, Esperion published another press release, indicating that the “FDA has encouraged the Company to initiate a cardiovascular outcomes trial promptly.” Esperion’s stock dropped 48% the next day. Plaintiffs, the purchasers of Esperion common stock between the two press releases, brought a class action under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5. The Sixth Circuit reversed the district court holding that Plaintiffs failed to adequately plead a strong inference that Esperion’s CEO willfully or recklessly made misleading statements. Plaintiffs adequately alleged scienter. View "Dougherty v. Esperion Therapeutics, Inc." on Justia Law
McDaniel v. Upsher-Smith Laboratories, Inc.
Upsher-Smith manufactures a generic form of amiodarone hydrochloride, which is FDA-approved as a drug of last resort for patients suffering from ventricular fibrillation and ventricular tachycardia, life-threatening heartbeat irregularities. As a generic manufacturer, Upsher-Smith is required to ensure that it includes the same labeling approved for its brand-name counterpart. 21 U.S.C. 355(j)(2)(A)(v), including making “Medication Guides” available for distribution to each patient with each prescription, 21 C.F.R. 208.24(b). Medication Guides explain the approved uses of a drug and its side effects “in nontechnical, understandable language.” The Guide for amiodarone warns that the drug “should only be used in adults with life-threatening heartbeat problems.” Lung damage is listed as a “serious side effect” that may continue after ceasing treatment. McDaniel sued Upsher-Smith, alleging that her husband died because he took amiodarone to treat his non-life threatening atrial fibrillation. Johnny apparently did not receive the Medication Guide when he filled his prescriptions in May and June 2015; Upsher-Smith neglected to ensure its availability. He was unaware that only adults with life-threatening heartbeat problems who had unsuccessfully sought alternative treatments should take the drug. The Sixth Circuit affirmed the dismissal of the failure-to-warn claims with prejudice, holding that they were impliedly preempted under the Federal Food, Drug, and Cosmetic Act. McDaniel failed to cite any Tennessee duty paralleling the federal duty to provide a Medication Guide, so the claims would not exist without the Act. View "McDaniel v. Upsher-Smith Laboratories, Inc." on Justia Law
Ibanez v. Bristol-Myers Squibb Co.
Abilify is approved to treat schizophrenia, Bipolar Disorder, major depressive disorder and irritability associated with autism. There are no disapproved treatments for elderly patients, but the FDA has included a warning since 2007 that Abilify is associated with increased mortality in elderly patients with dementia-related psychosis. Relators, former BMS employees, alleged in a qui tam suit that BMS and Otsuka engaged in a scheme to encourage providers to prescribe Abilify for unapproved (off-label) uses and improperly induced providers to prescribe Abilify in violation of the Anti-Kickback Statute. Nearly identical allegations were leveled against the companies years earlier. In 2007-2008, the companies each entered into an Agreement as part of a settlement of qui tam actions concerning improper promotion of Abilify. Relators allege that, despite those agreements, the companies continued to promote Abilify off-label and offer kickbacks, causing claims for reimbursement for the drug to be submitted to the government, in violation of the False Claims Act (FCA), 31 U.S.C. 3729. The district court dismissed in part. The Sixth Circuit affirmed; the complaint did not satisfy Rule 9(b)’s requirement that relators adequately allege the entire chain to fairly show defendants caused false claims to be filed. As sales representatives, relators did not have personal knowledge of provider’s billing practices.The alleged plan was to increase Abilify prescriptions through improper promotion, which does not amount to conspiracy to violate the FCA. View "Ibanez v. Bristol-Myers Squibb Co." on Justia Law
Stryker Corp. v. National Union Fire Insurance Co.
In the 1990s, Stryker purchased a Pfizer subsidiary that made orthopedic products, including the “Uni-knee” artificial joint. It was later discovered that those devices were sterilized using gamma rays, which caused polyethylene to degrade. If implanted past their five-year shelf-life, the knees could fail. Expired Uni-Knees were implanted in patients. Stryker, facing individual product-liability claims and potentially liable to Pfizer, sought defense and indemnification under a $15 million XL “commercial umbrella” policy, and a TIG “excess liability” policy that kicked in after the umbrella policy was fully “exhausted.” XL denied coverage, arguing that the Uni-Knee claims were “known or suspected” before the inception of the policy. Stryker filed lawsuits against the insurers, then unilaterally settled its individual product-liability claims for $7.6 million. Stryker was adjudicated liable to Pfizer for $17.7 million. About 10 years later, the Sixth Circuit held that XL was obliged to provide coverage. XL paid out the Pfizer judgment first, exhausting coverage limits. TIG declined to pay the remaining $7.6 million, arguing that Stryker failed to obtain “written consent” at the time the settlements were made. Stryker claimed that the policy was latently ambiguous because XL satisfied the Pfizer judgment first, Stryker was forced to present its settlements to TIG years after they were made. The district court granted Stryker summary judgment. The Sixth Circuit reversed, finding the contract unambiguous in requiring consent. View "Stryker Corp. v. National Union Fire Insurance Co." on Justia Law
Yates v. Ortho-McNeil-Janssen Pharma., Inc.
In 2004, Yates, 17 years old, was sexually active and was suffering from severe menstrual cramps. Smith, a licensed physician assistant, counseled Yates about various contraceptives, and the risks and benefits accompanying each. Yates admits that she was counseled concerning the risk of a stroke and clotting associated with ORTHO EVRA®. She decided to try Depo-Provera, which requires injections at three-month intervals. In 2005 she discontinued Depo-Provera due to weight gain and switched to the ORTHO EVRA® patch. Smith again discussed side effects. Yates admitted that she would have used ORTHO EVRA® even if she had read package warnings. Yates suffered a stroke while she was wearing her first weekly patch. A board-certified neurologist and neurophysiologist opined that Yates’s “use of the Ortho-Evra patch was the contributing cause of her stroke.” Smith’s suit was transferred for consolidated pretrial proceedings in connection with In re: Ortho Evra Products Liability Litigation. The district court dismissed her claims. The Sixth Circuit affirmed. The ORTHO EVRA® warnings in effect when Yates was prescribed the patch adequately warned her prescribing medical provider of the risk of stroke; there was no duty to directly warn Yates. The court rejected design defect, manufacturing defect, and negligence claims. View "Yates v. Ortho-McNeil-Janssen Pharma., Inc." on Justia Law
Calloway v. Caraco Pharma. Lab., Ltd.
In 2000 and 2002 the FDA issued warnings to Caraco, a Michigan pharmaceutical manufacturer, stating that failure to correct violations promptly could result in enforcement action without further notice. After follow-ups in 2005, the FDA sought a definitive timeline for corrective actions. The FDA issued notices of objectionable conditions in 2006, 2007, and 2008. A consultant audited Caraco’s facilities and stated that it was “likely that FDA will initiate some form of seizure action.” Caraco executives thought the consultant “alarmist.” Later, the FDA issued a formal warning, determining that Caraco products were adulterated and that its manufacturing, processing, and holding policies did not conform to regulations and noting its poor compliance history. The letter stated that failure to promptly correct the violations could result in legal action without further notice, including seizure. A new consultant warned of likely enforcement action. Caraco followed some of its suggestions. In 2009, Caraco issued a nationwide drug recall, constituting “a situation in which there is a reasonable probability that the use of, or exposure to, a violative product will cause serious adverse health consequences or death.” The FDA filed a complaint, served Caraco, and seized products. Days later, Caraco began a mass layoff, indicating that it did not “reasonably foresee" the FDA action. A certified class of former Caraco employees alleged that Caraco violated the Worker Adjustment and Retraining Notification (WARN) Act, 29 U.S.C. 2101, by failing to provide 60 days notice. The Sixth Circuit affirmed that the FDA action was not an unforeseeable business circumstance that would excuse WARN Act compliance. View "Calloway v. Caraco Pharma. Lab., Ltd." on Justia Law
Wahl v. Gen. Elec. Co.
GE manufactures Omniscan, an FDA-approved gadolinium-based contrast agent that has been associated in some patients with development of nephrogenic systemic fibrosis (NSF), a rare and deadly condition that leads to the hardening (fibrosis) of the kidneys. Omniscan was administered to Wahl for two MRIs she received in Nashville in 2006. About one year later, she displayed the first symptoms of NSF. She was officially diagnosed with NSF in 2010. The Judicial Panel on Multidistrict Litigation consolidated all pre-trial litigation of Omniscan-related cases in the U.S. District Court for the Northern District of Ohio. In 2011, Wahl filed a complaint in that court. With the agreement of Wahl and GE, the MDL judge transferred the case, in 2013, to the Middle District of Tennessee, the “proper venue.” GE then moved for summary judgment, arguing that all Omniscan doses produced from 2004 to 2006 were marked with expiration dates two years after manufacture, so the Omniscan administered to Wahl must have expired no later than 2008; the Tennessee Products Liability Act’s statute of repose requires suits to be instituted within one year of the expiration date appearing on a product’s packaging. The Sixth Circuit affirmed summary judgment, favoring GE, applying Tennessee choice-of-law rules. View "Wahl v. Gen. Elec. Co." on Justia Law
Decker v. GE Healthcare Inc.
In 2005, in connection with a magnetic resonance imaging procedure (MRI), Decker received a dose of Omniscan, a gadoliniumbased contrast agent manufactured by GEHC. After taking Omniscan, Decker developed Nephrogenic Systemic Fibrosis (NSF). In 2012, the Deckers sued GEHC, as part of a multidistrict litigation (MDL). Before the Deckers’ case, hundreds of similar cases in the MDL involving GEHC had been settled. The Decker case was the first case in the MDL to go to trial. The jury returned a verdict in favor of the Deckers on a failure-to-warn claim, awarding $5 million in damages. The Sixth Circuit affirmed, rejecting claims that the district court judge should have recused himself from the trial and a motion for a new trial; made several erroneous evidentiary rulings, which were applicable to all MDL cases; erroneously denied GEHC’s motion for a new trial because insufficient evidence supported the jury’s verdict regarding the causation element of the Deckers’ failure-to-warn claim; and erroneously failed to issue two proposed jury instructions. View "Decker v. GE Healthcare Inc." on Justia Law