The Supreme Court’s NOT Top 10: October 2013 Term Cases the Justices Wrongly Passed Over

supreme courtThe Supreme Court press and other court observers have spilled a lot of ink this past month discussing the cases the Supreme Court took and decided during October Term 2013. Relatively little was said about the cases the court chose not to decide—and it passed over some doozies. But as Rush drummer and lyricist Neil Peart put it so eloquently, “If you choose not to decide, you still have made a choice.”

Pro-Business? Journalists like to portray the Roberts Court as particularly business friendly (see, e.g., here , here, and here; but see here), but businesses asked the Court to take plenty of cases this past term that it instead declined. When the Court denies cert in cases of such importance to business at the same time that it has a historically light docket, it can hardly be said to be pro-business. Companies crave legal certainty, so even if the Court took these cases and decided them against business interests, many times simply settling contested questions would be better than leaving them up in the air.

Wanted: More Business Cases. The Court needs to hear more business cases than it currently is, for at least two reasons. First, the unprecedented proliferation of new regulations by this administration has given rise to many more conflicts of the kind that produce Supreme Court cases. Second, to the extent the Clinton-and-Obama-appointee-dominated lower courts are predisposed against business litigants (or, more charitably, deciding close questions consistently against them), businesses will appeal more cases to the Supreme Court when they believe a lower court has denied them justice. Of course the Supreme Court justices take neither of these criteria into consideration when assessing individual cases, but surely these factors matter when assessing whether the Court leans in favor of business in forming its docket. 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.

Welcome to “Sorrellonia”!: WLF Seminar Assesses Off-Label Drug Speech Ruling

PodiumPic1Off-Label Speech After U.S. v. Caronia: Implications for Drug & Device Regulation and the First Amendment, a Washington Legal Foundation Web Seminar program, is now available for on-demand viewing.

Our program featured analysis and commentary from Coleen Klasmeier of the Sidley Austin law firm and WLF’s Chief Counsel, Richard Samp. Coleen and Rich make reference to a Powerpoint slide deck, which due to a technical problem wasn’t available to viewers during the program.  The slide deck can be downloaded here.

For her presentation, Coleen coined the term “Sorrellonia” because the U.S. Court of Appeals for the Second Circuit two-judge majority in Caronia became the first court to fully apply the holding and rationale of the U.S. Supreme Court’s 2011 Sorrell v. IMS Health opinion.

Coleen’s and Rich’s presentations drew upon their combined years of experience in dealing with FDA’s application of its off-label speech restrictions and the Justice Department’s prosecution of cases where criminal violations of those rules allegedly occurred.

While they both saw great promise in the opinion for greater freedom in the exchange of critical medical information, they also offered firm notes of caution that the ruling not be interpreted as a green light for businesses’ promotion of off-label uses. Great peril still exists in this area they warned, a fact that is all the more apparent today with the announcement of another nearly $1 billion Justice Department settlement with a pharmaceutical company.

Judges Help Lawyers Circumvent SCOTUS Generic Drug Preemption Ruling

Guest Commentary

by Kelly Day Savage, Sedgwick LLP*

Many commentators (including this one) correctly predicted that savvy plaintiffs and sympathetic courts would create exceptions to the Supreme Court’s decision in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011)– that state-law tort claims against manufacturers of generic drugs based on insufficient product warnings are preempted by federal law–to permit plaintiffs to recover damages in otherwise barred actions.

In Whitener v. PLIVA, Inc., No. 10-1552, 2012 WL 3948797, at *4 (E.D. La. Sept. 10, 2012), the Federal District Court for the Eastern District of Louisiana created yet another legal loophole by permitting “a state-law tort claim based on alleged promotion of metoclopramide [the generic version of Reglan] for off-label purposes in violation of federal law” to escape preemption on defendants’ motion to dismiss. Continue reading

State Attorneys General Step to the Fore on Off-Label Drug “Promotion”

Cross-posted at WLF’s Contributor blog

With their law enforcement counterparts at the federal level raking in prodigious financial settlements, it’s no surprise that state attorneys general (“state AGs”) want a bigger piece of the action on off-label drug “promotion” regulation. The $181 million settlement reached August 29 between 36 attorneys general and a drug maker confirmed that state AGs must indeed be reckoned with on off-label issues. What will get medical product companies’ attention is not the financial settlement, though. The real eye-opener was the precision of the settlement’s conduct requirements, most notably one restraint on speech which goes beyond the dictates of federal law.

The settlement arose from “deceptive marketing” suits filed by state AGs throughout the country involving Ripersdal. Some of those suits resulted in verdicts imposing six- or seven-figure damages on the defendant, Janssen Pharmaceuticals. Janssen and its parent company, Johnson & Johnson (J&J), had appealed those verdicts, but the cost-benefit calculus of fighting vs. settling likely led the companies to resolve the claims on a global basis (much like the tobacco companies did with the state AGs).

In addition to the monetary settlement, Janssen and J&J agreed to conditions and limitations on how they share information about Ripersdal with medical professionals. As noted above and emphasized by former FDA associate chief counsel Arnie Fried in a Pharmalot interview, such behavior-changing dictates were what the AGs were really after here. Continue reading

Settlement with Oregon AG Reflects States’ Authority Over Prescription Drugs

Cross-posted by at WLF’s contributor page

Pharmaceutical companies’ promotions of their products continues to be an area of intense activity for several federal government agencies.  Such focused federal attention makes it easy for all interested parties, perhaps including drug makers themselves, to overlook the states’ involvement in the area of pharmaceutical promotion.  A settlement last month between the Oregon Department of Justice and Pfizer, which has received very little attention, is a stark reminder that many states are also keenly interested in pharmaceutical promotions.

The March 20, 2012 “Assurance of Voluntary Compliance” document arose out of Oregon’s involvement in a federal investigation of, and eventual settlement with, Pfizer regarding off-label “promotion” and other promotional activities.  The September 2009 $2.3 billion settlement stemmed from Pfizer’s promotion of a number of drugs, including painkiller Bextra and Zyvox, an antibiotic.

An Oregon DOJ press release relates that a two-year investigation indicated that Pfizer was relying on “unreliable and unsubstantiated claims” to promote Zyvox as being more effective than a competing product.  As the state investigation’s leader noted to a reporter, “Our investigation was aggressive, detailed, went places that the federal settlement didn’t and provided additional settlement to the state of Oregon.”   Continue reading

WLF Web Seminar Program Delved Into Strict Vicarious Liability for Managers

In case you missed it, a video of WLF’s October 26 Web Seminar program, Liability & Exclusion Without Intent: Managing to Survive Under the Responsible Corporate Officer Doctrine, is now available for your on-demand viewing.

The speakers, Mark Calloway and Brian Stimson of Alston & Bird, prepared a PowerPoint presentation to go along with their talk.  That presentation is available here.

Additional resources:

Constitutional Protection Amidst Severe Civil Punishments, WLF Legal Opinion Letter

“Responsible Corporate Officer”: Business Executives Face Strict Liability Under Novel Criminal Law Doctrine, WLF Legal Backgrounder

Facebook and FDA Put Drug Companies in Catch-22 Situation on Social Media

As of Monday, August 15, drug companies can no longer bar comments from their Facebook pages.  The conversation is now open, and Facebook users can freely comment on drugs, regardless of their knowledge and use of the drug in question.

Ostensibly, this seems fair.  Drug companies should play by the same rules as the rest of companies, right?  But if drug companies should abide by the same Facebook rules, they should be just as free from government regulation as are other companies whose pages feature third-party wall posts.  Unfortunately, this is not the case. Comments on the walls of drug companies can expose drug companies to serious liability with the FDA – liability that could cost hundreds of millions of dollars. Continue reading

Governor Rick Perry Puts “Off-label” Medical Therapy on Stage

A beneficiary of off-label medicine

Cross-posted by at WLF’s contributor page

Texas Governor Rick Perry is the latest beneficiary of so-called off-label medical therapy. Earlier this week, USA Today reported that Perry’s back surgery last month involved a stem cell therapy that is currently approved by the Food and Drug Administration (FDA) solely for bone marrow transplants.  The procedure went smoothly, however, and Perry’s health is now much improved thanks to his doctor’s knowledge of the therapy’s off-label application.

Unfortunately, off-label success stories like Perry’s are less common than they should be.  The reason is simple:  drug companies are prohibited from pro-actively sharing information about their products for uses beyond what the FDA has approved.  If a drug company discovers that its drug can be used to treat disease X, but it has only been FDA approved for disease Y, the company has to essentially remain mum about its solution to X.  Without this useful information, doctors are less likely to know about the drug’s beneficial alternative applications.  This ban on off-label communication is an offense to both American patients and American notions of free speech. Continue reading

SEC to Join HHS in Effort to Drop the Claw of Strict Liability on Business Managers

Oooo, the Claw

Cross-posted by at On the Docket and the WLF contributor page

The Washington Post reported this morning that the Securities and Exchange Commission had rejected a recommendation by the agency’s enforcement division to settle a case SEC had filed against former CSK Auto CEO Maynard Jenkins. This confirms that SEC has joined the federal government’s misguided drive to impose strict vicarious liability on business leaders for the unauthorized, unknown actions of others in their companies.

SEC Clawback. Several CSK officers had been engaged in accounting fraud, violations which an internal audit ordered by Jenkins had discovered. SEC’s case against the officials and the company acknowledged that Jenkins was himself a victim of the fraud, as the perpetrators had actively hidden the illegal activity from him. He was never accused of securities fraud or of even being negligent in his management of the company. Nevertheless, the SEC’s enforcers decided to pursue “reimbursement” of Jenkins’ bonuses under the so-called clawback provision of the Sarbanes-Oxley Act (SOX). Section 304 of the Act allows for this in situations where the company was harmed “as a result of misconduct” by the executive whose bonus return is being sought. Continue reading