Dangerous Imports and Drugs » drug lawsuits

Dems move to overturn shield for device makers

Gordon Johnson — Thu, 05 Mar 2009 16:36:00 +0000

Date: 3/5/2009

By MATTHEW PERRONE
AP Business Writer

WASHINGTON (AP) — A day after the Supreme Court decided that federal rules do not protect drugmakers from state lawsuits, Democrats in Congress moved to overturn a decision that has shielded medical device companies from similar legal action.

On Wednesday the court turned away Wyeth’s claim that it could not be sued in state courts for its drug Phenegran, because it had already been approved by the federal Food and Drug Administration. The ruling upheld a $6.7 million award to a Vermont woman who lost her arm after she was improperly injected with the company’s nausea medication.

Seizing on the decision, Democrats on Thursday reintroduced a bill that would allow similar lawsuits against companies that make heart devices, catheters, hip replacements and other devices.

“Yesterday the Supreme Court rightfully upheld a patient’s right to legal recourse after sustaining an injury from a pharmaceutical product,” said Rep. Frank Pallone, D-N.J. “Today, we introduce legislation that gives patients that same right when injured by a medical device.”

The idea that corporations are shielded from state liability claims by federal rules is relatively new and was pushed aggressively under the Bush administration.

Last year, the Supreme Court agreed with the pre-emption policy in a case involving medical devices, ruling a patient injured by a catheter from Medtronic could not sue under state laws. That case turned on a provision of federal law prohibiting states from imposing their own requirements on the devices. There’s no similar provision for drugs.

Since then thousands of lawsuits against Medtronic and other device companies have been dismissed by lower courts, citing the Supreme Court’s decision.

But Pallone and other Democrats said Thursday that decision ignored decades of precedent, in which lawsuits brought by patients in state courts helped bolster safety regulation at the federal level. The bill to restore liability claims against device makers is co-sponsored by Rep. Henry Waxman, who chairs the Energy and Commerce Committee. He is expected to hold hearings on the issue in coming weeks.

The device industry’s chief lobbying group quickly slammed the effort, saying it will “produce a chilling effect on medical innovation, create more lawsuits and ultimately result in higher health care costs for all Americans.”

The Advanced Medical Technology Association, or AdvaMed, said the legislation would allow state courts to second-guess medical experts at the FDA and create a “patchwork of inconsistent and confusing guidance.”

Despite opposition from industry, the Medical Device Safety Act enjoys support from a broad range of interest groups, including consumer advocates, trial lawyers and AARP. With companion legislation introduced by U.S. Sen. Ted Kennedy, D-Mass., many analysts have already predicted the measure will become law.

Earlier in the day AdvaMed rolled out its first-ever advertising guidelines for companies like Medtronic Inc., Johnson & Johnson and Boston Scientific Corp. Among other things, the guidelines urge companies to state the risks of their implants clearly and concisely when advertising them to consumers.

The device industry has begun attracting new scrutiny from lawmakers as companies increasingly pitch their implants to consumers via TV and magazine advertisements.

Bayer sues Abbott, alleging patent infringement

Gordon Johnson — Tue, 30 Dec 2008 17:43:00 +0000

Date: 12/30/2008

By LINDA A. JOHNSON
AP Business Writer

TRENTON, N.J. (AP) — Pharmaceutical and chemical maker Bayer AG has filed a federal lawsuit alleging that drugmaker Abbott Laboratories’ best-selling drug, Humira, infringes on a decade-old Bayer patent.

The German company’s Bayer HealthCare LLC unit sued Abbott and two of its subsidiaries, claiming the popular biotech drug used to treat severe types of arthritis and other immune disorders infringes on the U.S. patent that Bayer was awarded in 1997.

Bayer’s lawsuit was filed six years after Humira was approved for U.S. sales — and in the plaintiff-friendly U.S. District Court for the Eastern District of Texas. The lawsuit seeks triple damages for past and future patent infringement, attorney fees and other relief, but does not seek to halt sales of Humira.

Humira, which is injected, is Abbott’s top revenue driver, with sales jumping 50 percent to $1.2 billion in the third quarter. In October, the company boosted its forecast for full-year sales to $4.4 billion.

Bayer does not have any products that compete with Humira, according to spokeswoman Marcy Funk.

North Chicago-based Abbott, which was sent a summons by the court on Tuesday, will “vigorously defend against this lawsuit,” spokesman Scott Stoffel said.

“Humira does not infringe Bayer’s patent and Abbott believes Bayer’s patent is invalid,” Stoffel said.

Humira is approved to treat several serious immune system disorders, including rheumatoid and other kinds of arthritis as well as Crohn’s disease. The drug carries the risk of serious, possibly fatal, infections, including tuberculosis.

The Bayer patent in question, No. 5,654,407, covers a genetically engineered antibody that binds to and blocks the action of a type of immune system cell called tumor necrosis factor, or TNF. TNF is one of the cytokines, the “messengers” of the immune system, and stimulates inflammation, a key problem in the conditions that Humira treats.

According to the lawsuit, filed on Dec. 24 in Tyler, Texas, Bayer chose to file in the Eastern District of Texas because Abbott and subsidiaries Abbott Bioresearch Center Inc. and Abbott Biotechnology Ltd. sell and advertise Humira there.

Bayer’s lead lawyer in the case, T. John Ward Jr., is the son of a federal judge in Marshall, Texas, who helped build the Eastern District into a patent lawsuit hotbed.

Humira competes with the drug Remicade, made by Johnson & Johnson’s Centocor unit. That company and New York University filed a patent infringement suit against Abbott in April 2007, also in the Eastern District of Texas. The case is ongoing, according to Stoffel.

Abbott has a number of patents that cover Humira, including a “composition of matter” patent that doesn’t expire until 2016, he said.

Bayer said its patent runs until August 2014.

Bayer’s top drugs include the erectile dysfunction treatment Levitra, the antibiotics Cipro and Avelox, contraceptives Mirena and Yasmin, and Glucobay for diabetes. The company also makes agricultural products, coatings and plastics.

___

AP Business Writer David Koenig in Dallas contributed to this report.

Report: FDA officials opposed drug suit policy

Gordon Johnson — Thu, 30 Oct 2008 00:59:00 +0000

Date: 10/29/2008

By KEVIN FREKING
Associated Press Writer

WASHINGTON (AP) _ Top scientists and career employees at the Food and Drug Administration opposed agency regulations that weaken consumers’ ability to sue drug makers, congressional investigators said Wednesday.

At issue is language in a drug-labeling rule from 2006 that effectively limits when people can sue in state court over injury claims involving medications. The FDA contends federal regulations prevail when there is a conflict with state law. This concept is called pre-emption.

Internal agency documents showed that career officials opposed this approach, according to a report released by Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee. In the past, the agency had viewed private suits as an additional layer of protection against unsafe drugs, the report said.

“Much of the argument for why we are proposing to invoke pre-emption seems to be based on a false assumption that the FDA-approved labeling is fully accurate and up-to-date in a real time basis,” the report quoted Dr. John Jenkins, who oversees FDA’s new drug reviews, as saying. “We know that such an assumption is false.”

Patients injured by drugs have won suits against drug manufacturers for failing to warn against certain dangers.

In a case to be argued before the Supreme Court on Monday, a Vermont woman sued Wyeth after she lost her right arm below the elbow following a high-volume injection of the drug Phenergan. The injection accidentally punctured an artery, prompting gangrene to set in. Levine argued that the company had a duty to warn consumers that such injections could have devastating consequences. The state courts agreed, awarding her nearly $7 million.

Wyeth appealed, saying it was protected from such suits. It argued a state court cannot overrule the FDA’s judgment on label warnings.

FDA scientists had weighed the risks and benefits of Phenergan, used to treat nausea and allergies, when it approved the prescribing literature, or label, as a guide for doctors. The FDA was aware of risks associated with injecting some forms of Phenergan, but the label did not specifically warn about the technique used with Levine.

The FDA said in its 2006 rule and in a 2008 rule that state suits could encourage drug makers to propose unnecessary labeling. Such labeling could result in scientifically unsubstantiated warnings and less use of beneficial treatments.

Waxman’s staff obtained documents rejecting that warning. Jane Axelrad, an associate director for policy at the agency, wrote: “We rarely find ourselves in situations where sponsors want to disclose more risk information than we think is necessary,” she said. “To the contrary, we usually find ourselves dealing with situations where sponsors want to minimize the risk information.”

FDA officials said the agency encourages robust debate on public policy, so some dissension can be expected.

“As in any organization, there is rarely unanimity of opinion,” said spokeswoman Rita Chappelle.

In the end, the agency determined that finalizing the rules were the appropriate action.

“It was appropriate because FDA is the public health agency charged by Congress with the responsibility to ensure that drugs and certain medical devices are safe and effective and that the labeling adequately informs users of the risks and benefits of the product,” Chappelle said. “In addition, the agency is uniquely qualified to make such important and complex judgments.”

Public Citizen, the consumer advocacy group, said the Bush administration had pushed pre-emption clauses in a wide array of regulations.

“This effort to prevent injured citizens from using the courts and holding negligent companies’ accountable must be stopped,” said Brian Wolfman, director of Public Citizen’s litigation group.

The report said the FDA has yet to provide a complete set of documents that would show communications between the White House and the agency, but some documents suggested the agency and the White House would not go forward with a rule on labeling until the pre-emption changes were included.

___

On the Net:

House Oversight and Government Reform Committee: http://oversight.house.gov

Lilly takes $1.4B charge related to investigation

Gordon Johnson — Tue, 21 Oct 2008 10:48:00 +0000

Date: 10/21/2008 10:31 AM

By TOM MURPHY
AP Business Writer

INDIANAPOLIS (AP) _ Eli Lilly and Co. will take a big bite out of its third-quarter earnings with a $1.4 billion charge related to a government investigation over marketing practices for the anti-psychotic Zyprexa.

The drug maker said Tuesday it would take a charge that equates to $1.29 per share because it was in advanced discussions with the U.S. Attorney’s Office for the Eastern District of Pennsylvania over U.S. marketing and promotional practices for the drug.

But a Lilly representative also cautioned that the company isn’t admitting it did anything wrong in selling the anti-psychotic, its top revenue producer.

“All we’re doing today is taking a charge to earnings, so there is no admission or settlement or anything beyond that,” spokeswoman Marni Lemons said. “We are in advanced discussions with the government, but we have not concluded those discussions, and they could take more time.”

Patty Hartman, a spokeswoman for the U.S. attorney’s office, declined to comment on Lilly’s announcement.

“We’re aware that Lilly has released the information to the public, and it’s premature for us to comment about any disclosure,” she said.

The U.S. attorney’s office launched its investigation in 2004, and Lilly received a grand jury subpoena for a range of documents late last year. Lemons said the investigation has been a distraction.

“Our primary motivation is to put this issue behind us and get back to focusing on providing medications for patients, caregivers and health care professionals,” she said.

The charge surpasses Lilly’s entire profit for last year’s third quarter, when the drug maker reported net income of $926.3 million, or 85 cents a share. Lilly shares rose 5 percent Monday to close at $34.10, but the stock price fell 50 cents to $33.60 in Tuesday morning trading.

Analysts generally will exclude this charge from their earnings calculations for Lilly, analyst Les Funtleyder of Miller Tabak and Co. said.

“I think Wall Street will understand it’s a one-time event, and maybe a positive at that, because we’ll get past it,” he said.

Zyprexa has been Lilly’s top-selling drug for years and brought in $4.7 billion in revenue last year. But it also has been the subject of reams of litigation.

Lilly has settled more than 31,000 product-liability claims against the drug since 2005, shelling out more than $1.1 billion in the process.

Earlier this month, Lilly announced a separate $62 million settlement with 32 states and Washington, D.C., over marketing practices.

Lilly paid $15 million to settle a lawsuit with the state of Alaska in March. The drug maker still faces litigation with 11 states, generally involving consumer protection issues or Medicaid reimbursement.

But Lemons said some of those cases may be affected by settlement talks with the U.S. attorney’s office.

A group of insurance companies, unions and others are suing Lilly for billions of dollars, saying the drug maker charged too much for Zyprexa and marketed the drug for off-label uses. A federal judge has recommended that Lilly settle that case and last month granted the plaintiffs class-action status.

Aside from that case, Lilly still faces lawsuits from about 1,600 plaintiffs, Lemons said.

Lilly is scheduled to report its third-quarter earnings Thursdsay.

$894 million deal ends pain of Pfizer's lawsuits

Gordon Johnson — Fri, 17 Oct 2008 13:48:00 +0000

Date: 10/17/2008 9:47 AM

By LINDA A. JOHNSON
AP Business Writer

TRENTON, N.J. (AP) _ Drug giant Pfizer Inc. has reached an $894 million deal to end most of the lawsuits over its two prescription pain relievers, the popular Celebrex and a similar drug, Bextra, no longer on the market.

The world’s biggest drugmaker said Friday it has agreements in principle to end more than 90 percent of personal injury lawsuits brought by people claiming the pills caused heart attacks, strokes or other harm.

The settlement includes roughly 7,000 personal injury cases, mainly plaintiffs who took since-withdrawn Bextra, said plaintiff attorney Perry Weitz. He represents nearly 2,000 claimants, about 10 percent of them relatives of people who died.

“It gives Pfizer closure and the claimants their money sooner, rather than later or never at all,” Weitz said.

Pfizer hopes to finalize claims covered by the settlement, which now includes up to 92 percent of plaintiffs, by year’s end. It also hopes to include many of the remaining claimants in the settlement and will fight any remaining personal injury suits with court motions or at trial, General Counsel Amy Schulman told The Associated Press.

“I don’t think either side has an interest in protracting this,” Schulman said in an interview.

Weitz said plaintiff lawyers will “have issues” with Pfizer “if their claimants aren’t paid before the end of the year.”

In early trading, Pfizer shares were down 47 cents, or 2.8 percent, at $16.50.

Schulman said the deal comes after two important court rulings — one by a New York state judge overseeing many of the state-level personal injury cases and the other by a federal judge in San Francisco coordinating pretrial steps in federal lawsuits over the drugs.

“We teed up some pretrial motions for a court ruling on whether there was significantly reliable evidence that would allow an expert to testify as to whether there was an increased risk of heart attack and stroke at the most common dose,” 200 milligrams, Schulman said. Both judges ruled that was not the case, she said.

The proposed deal also would end suits by insurers and patients seeking to recover what they spent on Bextra and Celebrex, as well as claims by 33 states and the District of Columbia that Pfizer improperly promoted Bextra.

Out of the total settlement, $745 million will go to settle personal injury cases, $60 million will cover settlements with attorneys general in the 33 states and the District of Columbia, and $89 million will cover consumer fraud class action cases over reimbursement for money spent on the two drugs. Two additional states, Louisiana and Mississippi, still have pending cases regarding Pfizer’s promotion of the drugs.

New York-based Pfizer withdrew Bextra from the market in 2005, a year after Merck & Co. withdrew its Vioxx, a similar drug.

The Vioxx withdrawal, which triggered an avalanche of lawsuits against Merck, also raised concerns about the safety of other medicines in the same class, called Cox-2 inhibitors. They were heavily touted by their makers as superior to traditional nonsteroidal anti-inflammatory drugs, or NSAIDs, such as ibuprofen, because they block an enzyme involved in promoting inflammation but — unlike NSAIDs — don’t block an enzyme that protects the stomach from bleeding and other side effects.

Other NSAIDs, such as ibuprofen and naproxen, have also been linked to increased heart risks.

Celebrex is the only Cox-2 inhibitor that the Food and Drug Administration has allowed to remain on the U.S. market.

Attorney Christopher Seeger, a member of the plaintiffs steering committee, said he’ll “have no problem recommending” the settlement to the roughly 400 clients he represents.

“We’re very satisfied with the deal,” Seeger said.

Schulman said the company’s negotiations with opposing lawyers had been under way for some time but picked up in the late summer.

“Litigation can be distracting, and putting these matters behind us helps our shareholders and, most importantly, patients and doctors,” Schulman said.

Weitz noted that it took four or five years to get through trials for less than 20 cases in the massive Vioxx litigation, because the court system can only handle a limited number of cases at a time.

Pfizer will take a pretax charge of $894 million to its third-quarter earnings, which it is scheduled to report on Tuesday.

Merck, based in Whitehouse Station, N.J., has begun paying a $4.85 billion settlement to end about 50,000 lawsuits brought by people claiming Vioxx cause heart attacks, ischemic strokes or death. It still faces other litigation over the former blockbuster arthritis treatment.