WLF Briefing Discusses FDA’s “Plaintiffs’ Bar Over Patients” Generic Drug Labeling Proposal

FDA’s Generic Drug Labeling Proposal: Unauthorized and Counterproductive Disturbance of the Hatch-Waxman Balance

Our Panelists

  • Ralph G. Neas, The Generic Pharmaceutical Association
  • Alex Brill, American Enterprise Institute
  • Richard A. Samp, Washington Legal Foundation

Accompanying Materials

 

Consumer Product “Plain Packaging” Boomerangs in Australia

boomerangIn publications, formal comments, and here at The Legal Pulse, Washington Legal Foundation has consistently questioned the wisdom and legality of requiring “plain packaging” for disfavored consumer products. We wrote in a December 2011 post that plain packaging laws like the one Australia formally adopted in 2012 will “boomerang  . . . by creating a vigorous black market in cigarettes and forcing tobacco prices down as new and cheaper cigarettes enter the marketplace.”

Recent sales data and studies on the tobacco market in Australia show how that nation’s plain packaging law has, in fact, boomeranged as we predicted it would.

First, a late-2013 study by KPMG revealed that counterfeit tobacco sales in Australia had risen since the passage of the plain packaging law to almost 14% of the Australian market. Illicit sales not only deprive Australia of hundreds of millions in lost tax revenue, they also increase law enforcement costs in reaction to greater criminal black market activity. Australian press accounts demonstrate how the illicit sales are funding larger criminal enterprises, such as gangs. In addition, counterfeit sales have harmed Australia’s small retailers, as a study by an Australian market research firm has demonstrated.

Second, much to the shock of plain-packaging devotees, tobacco sales are increasing Down Under. Reports last month indicate that deliveries to tobacco retailers rose in 2013 for the first time in five years. This news should not be a surprise to anyone who understands basic economics and consumer behavior. Tobacco producers who are no longer able to differentiate their cigarettes from rivals through package branding and imaging, are forced to lower their prices to maintain or expand market share. Lower prices, of course, routinely lead to increased sales. Such a reaction is especially true when generic, lower-cost cigarette companies enter the market, as they have in Australia. WLF explained this effect in its 2010 comments to the Australian Parliament, emphasizing the success generic tobacco brands have had in the U.S.

Other nations such as Britain looking to sweep away trademark and speech rights with plain packaging laws should pay heed to these developments in Australia. Regulators who proceed in the face of such demonstrated economic hazards will be doing so more for ideological, rather than public health, reasons.

Also available at WLF’s Forbes.com contributor page

Update: FDA Drags Feet on Approval of Internationally-Accepted Vaccine While Drexel Student Dies of Meningitis B

Drexel University

Drexel University

The Centers for Disease Control and Prevention (CDC) have concluded that a Drexel University student who died in early March was infected with the same strain of meningitis, “serogroup B,” that some Princeton University students contracted in late 2013. The two schools are separated by about an hour in the greater Philadelphia area.

We discussed the outbreak at Princeton, as well as another one at the University of California Santa Barbara, and the need for those schools to “import” a meningitis B vaccine from overseas, in a December 19 post, The Meningitis B Outbreak: Heavy Doses of Government Can Be Costly. The vaccine had to be imported under an emergency exception because the Food and Drug Administration (FDA) has still not approved its use in the United States.

The situation at Drexel could parallel the developments at Princeton as opposed to those at UCSB. The Drexel student was reportedly in contact with Princeton students who had visited her at Drexel just a week before her death. In response, Princeton, which obtained and administered Novartis’s Bexsero vaccine after a lengthy federal government-required process, will be offering another round of vaccinations next week. News reports do not indicate whether the Princeton students in contact with the deceased Drexel student had received the inoculations that were made available on their campus, but only 80% of Princeton students have received both recommended doses of vaccine. One hopes that any students who bypassed the inoculations last time around have learned their lesson and will take full advantage of the next round of inoculations being offered.

Meanwhile, students at Drexel and their families will have to be satisfied with CDC’s conclusion that because there are no other meningitis B cases identified at the university, “members of the Drexel community are not considered to be at increased risk.”  Continue reading

CVS Action Brings Call for a Food Fight

CVS aisle, CVS/Pharmacy, Bethesda, MD

CVS aisle, CVS/Pharmacy, Bethesda, MD
Photo by Glenn G. Lammi

Well, that didn’t take long.

Just hours after CVS announced last Wednesday that it would halt sales of tobacco, public health activists and their media allies seized the opportunity to advance a notion championed by such anti-”Big Food” luminaries as The New York Times’ Mark Bittman and the Dean of Duke University’s Sanford School of Public Health, Kelly Brownell: food is the next tobacco.

For instance, the Texas Medical Association sent out the following tweet:

The commentary referenced in the tweet stated baldly, “Wander the aisles of CVS and see how their nutritional offerings fit within the framework of an organization pitching health.”

Next, this from Slate business and economics correspondent Matthew Yglesias:

But the cigarettes issue seems to me to mostly raise the question of how far CVS can really go down this road. After all, I was in CVS just yesterday to buy myself some Diet Coke. The Diet Coke sits next to the sugary sodas. And they’re across the aisle from the potato chips. Up front where you cash out there are lots of M&M’s and Snickers bars.

A Saturday op-ed in The Boston Globe called on CVS to put soda, energy drinks, and other “sugary beverages” behind the counter. In support of its absurd viewpoint, the piece quoted health researcher Deborah Cohen from the (normally cerebral) think tank RAND Corporation, who proclaimed, “The food industry is just shoving food in to us.” Nice imagery.

Speaking of imagery, the food=tobacco messaging wouldn’t be complete without a political cartoon.  One by nationally syndicated cartoonist Jimmy Margulies appeared Saturday on the Washington Post op-ed page.

Food companies obviously chafe at the comparison of these two highly dissimilar product categories, as should any person who doesn’t have an axe to grind. But now that opportunities for paternalistic power and money through tobacco control are waning, anti-Big Food activists and their erstwhile allies in the plaintiffs’ bar see food as a logical and vulnerable next target. And they have at the ready an effective strategic activism plan, battle-tested from the “tobacco wars.” Continue reading

Pharmaceutical Association’s Blog Features WLF Guest Post on U.S. v. Caronia, One Year Later Program

The blog of the Pharmaceutical Research and Manufacturers of America (PhRMA), The Catalyst, published a guest post from Washington Legal Foundation on Friday, January 31, Greater Clarity Needed Regarding What Scientific Information Biopharmaceutical Companies Can Communicate to Healthcare Providers.

The post, which features a foreword by PhRMA General Counsel Mit Spears, recounts the content of a January 16 WLF Media Briefing, U.S. v. Caronia, One Year Later: The First Amendment And Federal Oversight Of Off-Label Drug And Device.

The briefing can be viewed in its entirety by clicking on the title above.

WLF Media Briefing Program Focuses on Government’s Regulation of Information on “Off-Label” Drug Uses

Coleen Klasmeier, a partner with Sidley Austin LLP, Geoffrey M. Levitt, Senior Vice President and Associate General Counsel of Pfizer, Inc., and Jonathan L. Diesenhaus, a partner with Hogan Lovells US LLP discussed the impact of the Second Circuit’s December, 2013 Caronia decision on federal health product regulation and identify the latest developments and trends to follow in 2014 for public and private law enforcement targeted at off-label speech.

Court Ruling Recalls Injudicious Average Wholesale Price Litigation Crusade

Cross-posted by Forbes.com at WLF’s contributor site

A little over a decade ago, federal regulators and state attorneys general initiated a litigation campaign to alter how government health care programs reimbursed doctors for prescription drugs. Like most “regulation by litigation” efforts, this campaign seized upon laws of broad application such as the False Claims Act (FCA) and encouraged private lawsuits of questionable merit. Government enforcers have long since moved on to other crusades, but as a federal court decision last month reflects, some private suits still drag on, burdening American businesses with needless legal expenses.

AWP. In the early 2000s, the federal government reimbursed health care providers based in part on a drug’s average wholesale price, or “AWP.” Some likened AWP to the sticker price, or MSRP, of a new car: an inflated number which almost no one actually paid. Everyone involved in health care was aware of the illusory nature of AWP, and federal and state regulators urged legislative change, but Congress resisted reform. So unelected officials and their brethren in the plaintiffs’ bar sought to impose change. As this 2002 WLF Working Paper explains, they devised legal theories which branded AWP as an overcharging scheme, and accused drug makers, price publishers, and other entities such as pharmacy benefit managers (PBMs) of perpetrating a fraud. State attorneys general filed billion-dollar fraud actions and plaintiffs’ lawyers teamed up with “whistleblowers” to file qui tam suits under the FCA.

The ensuing litigation crusade provided moderate returns at best to the plaintiffs’ lawyers and state AGs who jumped on board. For instance, in 2009, the Alabama Supreme Court dashed the state’s (and its contingent-fee lawyers’) dreams of a huge payday, dismissing two AWP cases, finding no fraud existed. Continue reading

Sixth Circuit Affirms Preemption Defense in Suit against Branded and Generic Drug Companies

Cruz-Alvarez_FFeatured Expert Column

by Frank Cruz-Alvarez, Partner, Shook, Hardy & Bacon, L.L.P., Miami office, and Travis Robert-Ritter, an associate in the firm’s Miami office.

On December 6, 2013, the U.S. Court of Appeals for the Sixth Circuit in Strayhorn v. Wyeth Pharm., Inc., No. 12-6195, — F.3d —-, 2013 WL 6224337 (6th Cir. Dec. 2, 2013) significantly limited drug manufacturers’ exposure to liability from harm caused by generic prescription drugs. Applying recent U.S. Supreme Court precedent, the Sixth Circuit held that the federal scheme governing generic prescription drugs preempts state-law failure-to-warn claims against generic drug manufacturers for injuries caused by their products. Id. at *6-17. The court also concluded that under state law, brand-name drug manufacturers may not be held liable for harm caused by other companies’ generic versions of their drugs. Id. at *20-26. In sum, the Sixth Circuit reasoned that federal and state law combined to eliminate failure-to-warn claims for injuries caused by generic prescription drugs.

The appeal arose out of the consolidation of seven cases filed against the manufacturers of the drug Reglan and its generic equivalent, metoclopramide. Id. at *1. The plaintiffs alleged that they ingested generic metoclopramide, causing them to develop a serious neurological disorder known as tardive dyskinesia. Id. The district court dismissed plaintiffs’ claims against both the generic and brand-name manufacturers. Id. An appeal ensued.

Turning first to plaintiffs’ claims against the generic drug manufacturers, the Sixth Circuit concluded it was bound to dismiss the claims based on the Supreme Court’s reasoning in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011) and Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466 (2013). See Strayhorn, 2013 WL 6224337 at *5-17. In PLIVA, Inc. v. Mensing, the Supreme Court held that state-law failure-to-warn claims raised against certain generic drug manufacturers were preempted by federal law. 131 S. Ct. at 2577-2578. A group of plaintiffs had argued that the generic drug manufacturers should be held liable under state law because the warnings on their drugs were inadequate. Id. at 2572-2574. The Supreme Court soundly rejected the argument, explaining that the federal statutory scheme governing generic drugs limits manufacturers to using the same label and warnings approved for the generic drug’s brand-name equivalent. Id. at 2574-2578. Because this federal limitation made it impossible for the manufacturers to meet their obligations under both federal and state law, plaintiffs’ failure-to-warn claims were preempted. Id. Continue reading

The Meningitis B Outbreak: Heavy Doses of Government Can Be Costly

Princeton University campus

Princeton University campus

Cross-posted at WLF’s Forbes.com contributor page

President Obama often makes reference to how trying times can provide “teachable moments.” The recent outbreak of bacterial meningitis on college campuses is such a moment, but don’t expect the President to notice. The fact that school officials had to seek federal government permission to import a vaccine not yet legally available in the U.S., reveals anew the human cost of overbearing government regulation.

Seven cases of infection with the “B” strain of bacterial meningitis have occurred at Princeton University, and four have been confirmed at the University of California at Santa Barbara (UCSB). Statistically, 10% of those infected with meningitis B die, and 20% of those who recover suffer from severe side effects such as deafness and limb loss. Vaccines for every strain of meningitis have been approved for use in the United States except meningitis B; however a vaccine called Bexsero has been approved for use in Europe, Australia, and Canada.

At Princeton. Last October, with terrified students and their parents demanding action, school and state health officials had to ask federal health officials if Bexsero could be imported and administered at Princeton. Cue the creaky wheels of bureaucracy. The Centers for Disease Control and Prevention (CDC) asked the Food and Drug Administration (FDA) to issue an investigational new drug application, which is required to import Bexsero. The vaccine finally arrived at Princeton in early December, and immunization began there last week. Continue reading

FDA’s Disrespect for the First Amendment (and Federal Courts) Dips to a New Low

cnbcCross-posted at WLF’s Forbes.com contributor page

The Food and Drug Administration (FDA) has long had “commitment issues” in its relationship with the First Amendment.  It possesses statutory authority to prevent the sale and distribution of drugs whose intended use and labeling are not FDA-approved, but in doing so it routinely treads on manufacturers’ speech.  Federal courts have held repeatedly that the First Amendment severely restricts FDA’s regulation of truthful speech about approved drugs.  The agency has responded with assurances that it will comply fully with those court decisions.  Recent actions make clear, however, that FDA shows little or no respect for those rulings and apparently believes it is not bound by the First Amendment.

The latest example of FDA’s defiance took the form of a Warning Letter issued by FDA’s Office of Prescription Drug Promotion (OPDP) on November 8, 2013 to Aegerion Pharmaceuticals.  OPDP’s letter objected to an appearance by Aegerion’s CEO on a CNBC talk show directed to the financial community.  During the course of his interview, the CEO suggested that Juxtapid, a drug manufactured by Aegerion, was safe and effective for several off-label uses that are closely related to its approved uses.  For example, the CEO could reasonably have been understood to say that the drug, when taken by itself, was effective in reducing a patient’s “bad” cholesterol levels, even though FDA has approved Juxtapid as a treatment for reducing “bad” cholesterol only as an “adjunct” to a “low-fat diet and other lipid lowering treatments.”  The Warning Letter did not contend that the CEO’s statement regarding efficacy was false, but it nonetheless charged that the statement was illegal because it rendered Juxtapid “misbranded.”  The letter demanded that Aegerion “immediately cease misbranding Juxtapid” and to issue “corrective messages” to rectify the situation.

So how did OPDP reach the remarkable conclusion that truthful statements made on a television talk show aimed at the financial community can render an otherwise lawful drug “misbranded?”  OPDP noted that a “misbranded” drug is defined to include a drug that lacks adequate directions for all intended uses.  It is safe to assume that a drug’s approved labeling does not include adequate directions for uses that have not been approved by FDA.  So if a manufacturer distributes a drug with the objectively verifiable intent that it be sold for an off-label use, the drug can be deemed “misbranded.”  So far so good.  Continue reading