The question every false claims defendant must face is whether to pursue litigation or simply concede and settle. While many shy away from litigation, opting for an expensive but certain resolution, for Johnson & Johnson and its subsidiary Janssen Pharmaceuticals, Inc., the decision to pursue their day in court has saved J&J over $330 million.
In our prior blog post of the same title on July 5, 2013, we predicted that the protection from product liability/failure to warn litigation for generic manufacturers as a result of the Supreme Court decision in Mutual Pharmaceutical Co., Inc. v. Bartlett, 133 S. Ct. 2466 (2013) might be short-lived. FDA, in a Federal Register notice dated November 13, 2013, has proposed to allow holders of Abbreviated New Drug Applications (“ANDA’s”) for generic drugs to file supplements for labeling changes that might cause its labeling – on at least a temporary basis – to differ from the labeling of its Reference Listed Drug. The proposed rule was published at 78 Fed. Reg. 67,985 and allowed for comments to be filed by January 13, 2014. By notice of Federal Register of December 27, 2013, 78 Fed. Reg. 78,796, FDA extended the comment date to March 13, 2014. What generic manufacturers need to know about this proposed rule is not only would it eliminate product liability protection, but it would increase their regulatory burdens.
The United States District Court for the Northern District of California ruled November 12, 2013, that a party seeking to obtain approval of a biosimilar could not avoid the process set forth in the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) by obtaining a declaratory judgment of patent invalidity before even submitting a biosimilars application. See Sandoz Inc. v. Amgen Inc., Civil No. 13-2894 MMC, _____ USLW _____ (N.D. Cal. 2013).
As computing power continues to become cheaper and more powerful, medical devices are increasingly capable of handling larger and larger sets of data. This provides the ability to log ever expanding amounts of information about medical device use and patient health. Whereas once the data that could be obtained from a therapeutic or diagnostic device would be limited to time and error codes, medical devices now have the potential to store personal patient health information. Interoperability between medical devices and electronic health record systems only increases the potential for medical devices to store personal information.
On August 5, 2013, the U.S. Food and Drug Administration published a final rule on the labeling of foods as “gluten free.” Gluten is a protein composite found in wheat, rye, barley, and their crossbred hybrids. Gluten gives elasticity to dough, helping it rise and keep its shape and often gives the final product a chewy texture. In order for a food to be labeled “Gluten Free” under the rule, the food may not contain 20 parts per million (ppm) or more gluten. The rule applies to the claims “free of gluten” and “without gluten” as well.
On July 25, 2013, the Food and Drug Administration (“FDA” or “the Agency”) published a Draft Guidance for Industry entitled “Pre-Launch Activities Importation Requests”, or “PLAIR”. The draft guidance describes FDA policy on requests for importation of unapproved finished dosage form drug products by an applicant preparing for market launch pursuant to a New Drug Application (“NDA”), an Abbreviated New Drug Application (“ANDA”) or a Biologics License Application (“BLA”). The draft guidance describes the procedure for making requests for importation prior to approval, as well as the factors FDA will look to in deciding whether to grant such requests.
On June 24, 2012, the U.S. Supreme Court handed down its decision in Mutual Pharmaceutical Co. Inc. v. Bartlett, 570 U.S. ____ (2013), finding that design-defect claims against generic drug companies are pre-empted where federal law prohibits an action required by state law. The Supreme Court had previously held in Pliva v. Mensing, 564 U.S. ____ (2011) that failure to warn claims against generic drug manufacturers are pre-empted by the Federal Food Drug and Cosmetic Act since generic drug makers must copy innovator drug labeling precisely in order to obtain approval of their products by the U.S. Food and Drug Administration (“FDA”). The Court in Mutual rejected the argument of lower courts that the generic manufacturer could comply with both federal and state law by choosing not to make and distribute the product at all.
On June 17, 2013, the United States Supreme Court announced a rule that blurs the lines between antitrust and patent law in the context of Hatch-Waxman litigation. In FTC v. Actavis, 570 U.S. 756 (2013), the Federal Trade Commission (“FTC”) prevailed when the Supreme Court held in a 5-to-3 decision  that reverse payment settlements in Hatch-Waxman cases are subject to antitrust scrutiny, resolving a circuit split and impassioned debate among antitrust lawyers. This is only the second antitrust case in 20 years where the enforcers have prevailed. The Court, however, rejected the FTC’s position that reverse-payment settlements were presumptively illegal, ruling that they are subject to scrutiny under the rule of reason.
On Thursday, June 13, 2013, the U.S. Food and Drug Administration (“FDA”) released a draft guidance on measures to help ensure the cybersecurity of medical devices. The draft guidance, titled “Content of Premarket Submissions for Management of Cybersecurity in Medical Devices,” proposes cybersecurity features that should be incorporated into wireless, Internet- and network-connected medical devices (“cybersecurity-vulnerable devices”), as well as information that will be requested in premarket submissions for cybersecurity-vulnerable devices. In addition to the draft guidance, FDA also issued an FDA Safety Communication to medical device manufacturers, hospitals, medical device user facilities, health care IT and procurements staff, and biomedical engineers on cybersecurity for medical devices and hospital networks.
I am often called upon to address the nature of how regulatory controls may apply to the organization of healthcare companies in their ability to create, deliver, and capture value (their ‘business models’). While no summation could adequately capture all of the complexity inherent in this question, it would seem appropriate to briefly comment on some of the general recent trends I have seen, and how they may be shaped by various regulatory authorities.