FDA Proposed Rule Would “Preempt” Supreme Court Rulings in Pliva and Bartlett

Last week the FDA announced a proposed Rule that would put generic manufacturers on the same “products liability” footing as branded manufacturers.  By requiring generic manufacturers to update their labels to take into account new safety information, the FDA rule would effectively overrule the Supreme Court’s holdings in PLIVA v. Mensing and Mutual Pharmaceutical Co., Inc., v. Bartlett, which effectively barred most state law products liability suits against generic drug manufacturers on federal preemption grounds. [Read more...]

J&J to Pay $2.2 Billion To End Long-Standing Investigations By Feds

Charges of off-label marketing and kickback payments to physicians and long-term care pharmacy provider Omnicare are behind a $2.2 billion settlement agreement between Johnson & Johnson (“J&J”) and the U.S. Department of Justice (DOJ), in which the global health care giant finally resolves criminal and civil liability involving Risperdal and two other prescription drugs.  The eye-popping figure makes this the third largest health care fraud settlement in U.S. history. [Read more...]

Using A Company’s “Intrinsic” Value In Defending Securities Fraud Suits

A recent securities class action lawsuit filed in a Connecticut federal court charges that Achillion Pharmaceuticals, Inc., and its CEO and CFO misled investors by failing in an adequate and timely fashion to disclose clinical information and FDA actions related to sovaprevir, an Achillion drug under study for the treatment of hepatitis infections.  If the Connecticut-based pharmaceutical company’s ability to fend off the allegations of the Complaint turns on the relationship between the Company’s “disclosures” and drops in its stock price (as the plaintiff and his lawyers would like), the Company may have a problem.  However, as M&A lawyers are learning in the context of garden variety shareholder litigation and appraisal rights litigation, one available defense may lie in the Company’s ability to demonstrate the long-term “fair” or “intrinsic” value of its stock. [Read more...]

Lilly Scientists Prosecuted For Trade Secret Theft

Two former Eli Lilly scientists were arrested and charged by the U.S. Government for stealing and transmitting Lilly trade secrets to a Chinese company.  Guoqing Cao and Shuyu Li, both research scientists with doctoral degrees, have been charged with multiple counts of trade secrets theft and conspiracy in violation of 18 U.S.C. Sections 1832 and 371, according to an Indictment that was recently unsealed by the U.S. Attorney’s Office in Indianapolis.  The charges against the two naturalized U.S. citizens, who will remain in custody for leaking trade secrets to a Lilly competitor in China, provides an abject lesson for both pharmaceutical companies that fail to safeguard trade secrets and other proprietary information and employees who get caught by federal authorities. [Read more...]

Medtronic InFUSE Cases Signal That Off-Label Promotion Probably Not Illegal

A majority of plaintiffs seeking damages based on off-label promotion of Medtronic’s InFUSE Bone Graft system have been stopped in their tracks following several recent federal court decisions holding that such challenges were barred on preemption grounds.  Indeed, with the exception of two district court cases out of the Ninth Circuit, these preemption rulings not only underscore the limits of off-label promotion arguments in medical device cases, but also show that courts remain skeptical about whether off-label promotion is illegal under federal law. [Read more...]

Plaintiff’s Bar and FTC Launch Antitrust Offensive Against Patent Settlements

The Supreme Court’s decision in FTC v. Actavis last June has incentivized a host of direct and indirect payer antitrust class action suits aimed at branded and generic drug manufacturers that settled their Hatch-Waxman patent litigation disputes that included “reverse payments.”  While most of the targeted settlements involved true reverse payments — that is, payments from branded manufacturers to their generic competitors to keep generic versions of products off the market for a period of time — some are taking their cue from the FTC and are challenging patent litigation settlements on antitrust grounds even where no actual reverse payment was made.  From the FTC’s and  plaintiff’s bar perspective, it would appear that any settlement that doesn’t result in immediate generic entry is actionable on antitrust grounds.  But, like so many other positions taken by the Government, does such a viewpoint make common or good policy sense? [Read more...]

Novartis’ PLIVA-Bartlett Argument Rejected on the Eve of ZometaTrial

In a clever move, Novartis sought to use the Supreme Court’s decisions in PLIVA, Inc. v Mensing and Mutual Pharmaceutical Co., Inc. v Bartlett, to exclude evidence that it could have strengthened the labeling of its bone-cancer drug, Zometa, in a products liability suit slated to start on Monday in a Florida federal court.  The court rejected Novartis’ motion in limine, ruling that those Supreme Court decisions provided a preemption defense to generic manufacturers only. [Read more...]

Big Pharma On Its Heels as China Rounds Up “More Of The Usual Suspects” And Prepares To Slam GSK

Allegations of misconduct continue to plague Big Pharma companies in China.  Charges of bribery, corruption, off-label promotion, and inflated pricing now extend beyond GlaxoSmithKline (GSK) to Novartis, Eli Lilly, and Sanofi.  While these companies react to coming under Chinese scrutiny — with Johnson & Johnson (J&J) reportedly taking “proactive” steps to strengthen its China unit –  the Company that started it all (GSK) braces for major fines.  [Read more...]

Plaintiff’s Lawyers File RICO Class Action Suit Against Abbott Over Depakote Off-Label Promotion

A well-known plaintiff’s law firm with a stable of union pension fund clients has used the Racketeering Influenced and Corrupt Organizations Act (“RICO”), which was originally enacted in 1970 to combat organized crime, to file a class action lawsuit against Abbott Laboratories for the off-label promotions of Depakote.  Unless Abbott and similarly situated big pharma companies intend to fork over hundreds of millions (if not billions) of more dollars to plaintiff’s lawyers, they need to fight such suits tooth and nail. [Read more...]

Boston Scientific Battles Former Employees-Turned Whistleblowers Over “Trade Secrets”

In what will likely be another adverse legal decision for Boston Scientific Corporation’s Neuromodulation subsidiary (“BSNC”) in its ongoing battle with two former billing services employees-turned whistleblowers, the medical device manufacturer’s latest attempt to derail a qui tam suit involves charges that the whistleblowers stole BSNC trade secrets, thus violating the terms of their employment agreements.  Although there might one day be a case that truly tests the limits on how far an employee can go in taking her employer’s proprietary data to win the qui tam lottery, the current suit involving BSNC is probably not that case. [Read more...]