Articles Posted in Drugs & Biotech

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The Eighth Circuit affirmed the dismissal of relator's False Claims Act (FCA), 31 U.S.C. 3729 et seq., suit based on the public disclosure bar. Relator alleged that CSL Behring conspired with pharmacies to submit false claims to the United States for reimbursement for prescription drugs. The Eighth Circuit concluded that, viewed collectively, the public disclosures provided enough information about the participants in the scheme to directly identify the defendants and the subject drugs; the disclosures would have set the government squarely on the trail of the defendants' participation in the purported fraudulent reporting; and the essential elements of relator's claims -- the purported fraud -- were publicly disclosed prior to him filing suit. View "Lager v. CSL Behring" on Justia Law

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Plaintiff filed a shareholder derivative action on behalf of Medtronic, Inc., against current and former directors and officers of Medtronic, and against Medtronic as a nominal defendant. Plaintiff's complaint alleged various bad acts and false and misleading statements stemming from Medtronic's alleged improper promotion to physicians of the "off-label" use of its "Infuse" product. The district court dismissed the action based on a report by a special litigation committee (SLC). The court concluded that defendants' motion to terminate the litigation based on the SLC report could not be construed as a motion under Rule 12(b)(6) nor one arising under Rule 56; the court agreed with the district court and the Eleventh Circuit that the closest fit for a motion to terminate in the Federal Rules was Rule 23.1(c); the proper standard of review was for an abuse of the district court's discretion; the district court did not err in deferring to the SLC under Minnesota's business judgment rule (BJR) where the SLC possessed a disinterested independence, and the SLC's investigative methodologies and procedures were adequate, appropriate, and pursued in good faith; and the district court did not abuse its discretion by denying plaintiff's motion for discovery. Accordingly, the court affirmed the judgment. View "Kokocinski v. Collins, Jr." on Justia Law

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Plaintiffs acquired shares of K-V Pharmaceutical stock during the period in which the company launched and marketed Makena, its new prescription drug, designed to reduce the risk of pre-term labor for at-risk pregnant women. It had acquired rights to the drug from the FDA, under the Orphan Drug Act, 21 U.S.C. 360. In a putative class action, the plaintiffs alleged that K-V and three of its officers made materially false or misleading statements or omissions related to the product launch. The district court dismissed, holding the challenged statements were protected by the safe-harbor provision of the Private Securities Litigation Reform Act of 1995 (PSLRA), 15 U.S.C. 78u-4(b), and that the plaintiffs failed to adequately plead scienter under the PSLRA. The district court also denied the plaintiffs the opportunity to amend the complaint as it related to allegations from confidential witnesses. The Eighth Circuit affirmed. K-V’s statements fell within the PSLRA’s safe-harbor provision as forward-looking statements accompanied by meaningful cautionary language and are not actionable as a basis for a securities fraud action. View "Anderson v. K-V Pharma. Co." on Justia Law

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Madel sued the Department of Justice and Drug Enforcement Administration for a response to Freedom of Information Act, 5 U.S.C. 552, requests that sought information on oxycodone transactions in Georgia by five private companies. DEA withheld some documents as confidential commercial information. The district court granted summary judgment to DEA, finding it produced all non-exempt information. The court denied declaratory and injunctive relief and attorney fees. The Eighth Circuit reversed and remanded. Rejecting a claim that DEA did not justify withholding the five documents under FOIA Exemption 4, the court concluded that DEA showed that substantial competitive harm was likely. DEA did not make “barren assertions” that the documents were exempt, but linked each document to identifiable competitive harms. The court remanded for consideration of FOIA’s segregability requirement. DEA did not show “with reasonable specificity why documents withheld pursuant to a valid exemption cannot be further segregated.” Its Declaration does not address how disclosure of the data from, for example, 2007, leads to the proffered substantial competitive harms of a competitor “target[ing] specific markets” or “forecast[ing] potential business of new locations.” View "Madel v. Dep't of Justice" on Justia Law

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Townsend worked as an Arkansas pharmaceutical sales representative for Bayer, selling Mirena, a contraceptive device. Townsend visited physicians, including Dr. Shrum. Townsend learned Shrum was importing from Canada a version of Mirena that was not FDA-approved, at half the cost of the approved version. Shrum had submitted Medicaid claims at the same rate as the approved version and bragged about $50,000 in extra profit. Townsend sought guidance from his superiors. Bayer told Townsend not get involved. Townsend called the Medicaid Fraud Hotline, although he feared losing his job. Shrum was charged with Medicaid fraud. Meanwhile, Bayer changed its method of reimbursing sales expenses. Not understanding the change, Townsend’s wife spent funds intended for those expenses, causing Townsend’s account to be closed temporarily. Although Townsend's account had been reactivated, Bayer fired him, claiming his closed account prevented him doing his job. Townsend sued, citing anti-retaliation provisions of the False Claims Act, 31 U.S.C. 3730(h).). A jury awarded Townsend back pay, doubled to $642,746, and $568,000 in emotional distress damages. The court denied front pay and ordered Bayer to reinstate Townsend. The Eighth Circuit affirmed on all issues except the emotional distress damage award and remanded to allow Townsend the option of accepting a remittitur of $300,000, or a new trial on emotional distress damages. View "Townsend v. Bayer HealthCare Pharm. Inc." on Justia Law

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Plaintiff, after being diagnosed with tardive dyskinesia (TD), filed suit against Lilly, manufacturer of the antipsychotic drug, Zyprexa, alleging personal injury and product liability claims. The district court concluded that Lilly adequately warned plaintiff's treating and prescribing physicians of the risk of developing movement disorders like TD. On appeal, plaintiff argued, inter alia, that the district court erred in excluding his expert opinion testimony that 15% of Zyprexa users will develop TD after three years of use. The court concluded that the district court was well within its substantial discretion to conclude that plaintiff had not provided sufficient scientific support for the opinion and to exclude the opinion. The court also concluded that the district court properly applied the learned intermediary doctrine in dismissing the failure-to-warn claim. Finally, assuming Arkansas law recognized an overpromotion exception, the exception would not apply in this case because plaintiff presented no evidence that any representation by a salesperson affected a prescribing doctor's decision to continue plaintiff on Zyprexa and because there was no reliable evidence that Zyprexa had significantly more risk of movement disorders than the drug reps allegedly said it had. Accordingly, the court affirmed the district court's dismissal of plaintiff's complaint. View "Boehm v. Eli Lilly & Co." on Justia Law

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Plaintiff filed suit against Novartis alleging that Novartis negligently failed to provide adequate warnings for two drugs she took, Aredia and Zometa, after having two of her teeth extracted. Plaintiff developed osteonecrosis of the jaw (ONJ) after the extraction. Plaintiff was awarded $225,000 in compensatory damages and Novartis appealed. The court concluded that a jury could reasonably find that plaintiff's injury was the natural and probable consequence of Novartis's behavior and rejected Novartis's arguement that plaintiff did not establish that her injuries were proximately caused by inadequate warnings; the district court did not err in applying Missouri law where Missouri had the most significant relationship to the punitive damages claim; and Novartis correctly reasoned that the MedWatch checkmarks were inadmissible hearsay, out-of-court assertions offered for their truth but Novartis failed to demonstrate the prejudice required for a new trial. The court concluded, however, that the district court abused its discretion in awarding plaintiff full costs for depositions conducted as part of multi-district litigation. Accordingly, the court affirmed in Case No. 12-3121 and vacated in Case No. 12-3409. View "Winter v. Novartis Pharmaceuticals Corp." on Justia Law

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OMJP appealed from the district court's denial of its motion for relief from judgment under Federal Rule of Civil Procedure 60(b)(2) and (3). In Levaquin I, the court upheld a jury award in compensatory damages against OMJP for Achilles tendon injuries plaintiff suffered while taking OMJP's prescription antibiotic Levaquin. In this appeal, OMJP contended that the district court abused its discretion in denying OMJP relief under Rule (60)(b)(2) based on the delinquent and belated disclosure of an expert's calculation regarding the relative risk of Achilles tendon rupture to certain patients. The court concluded that the district court did not abuse its discretion in denying relief based on OMJP's claim of "newly discovered evidence" where the evidence was merely cumulative or impeaching and OMJP had not demonstrated that it was probable it would produce a different result. In regards to OMJP's misconduct claim under Rule 60(b)(3), the court concluded that the district court did not abuse its discretion in finding that the lack of the expert's calculation did not prevent OMJP from mounting a vigorous defense and that any misconduct did not warrant a new trial. Accordingly, the court affirmed the judgment of the district court. View "Schedin v. Ortho-McNeil-Janssen Pharmaceuticals" on Justia Law

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Plaintiff alleged that Bayer defrauded the United States government through its marketing and sale of the cholesterol-lowering drug Baycol. On appeal, plaintiff challenged the dismissal of the qui tam action she brought against Bayer Healthcare under the False Claims Act (FCA), 31 U.S.C. 3729-3733. Based upon the court's review of plaintiff's allegations regarding the Department of Defense (DoD) contracts, the court concluded that her complaint satisfied Rule 9(b)'s requirements and survived a motion to dismiss under Rule 12(b)(6). Accordingly, the court reversed the district court's judgment with regard to her allegations regarding the DoD contracts and remanded for further proceedings. However, the court affirmed the district court's judgment with respect to the allegations involving federal health insurance reimbursement claims under United States v. ex rel. Roop v. Hypoguard USA, Inc. View "Simpson v. Bayer Healthcare, et al." on Justia Law

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Plaintiffs filed three separate class action suits alleging that defendants violated Missouri law and conspired with unknown third parties to deceive customers into throwing away medications after their expiration dates, knowing that the medications were safe and effective beyond the expiration date. Defendants appealed the district court's remand order holding that defendants failed to establish the amount in controversy requirement under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(2). The court concluded that each defendant's affidavit detailing the total sales of their respective medications in Missouri met the amount in controversy requirement; even if it was highly improbable that plaintiffs would recover the amounts defendants have put into controversy, this did not meet the legally impossible standard; defendants were not required to provide a formula or methodology for calculating the potential damages more accurately, as the district court held; and defendants' affidavits were not inadmissible hearsay. Therefore, the court reversed the district court's finding that it lacked subject matter jurisdiction and remanded for further proceedings. View "Raskas, et al. v. Johnson & Johnson, et al." on Justia Law