HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Friday, March 25, 2011

Guest Blogger Jennifer S. Bard: Securities Law Case Helps Increase FDA Authority to Monitor Post-Market Adverse Events

Bard The Supreme Court’s unanimous decision in Matrixx Initiatives Inc. v. Siracusano, No. 09-1156 that the makers of Zicam had to inform investors of information that its product caused permanent damage to some users’ sense of smell even though that information was not “statistically significant” is likely to prove very helpful to the FDA, and in turn consumers, in the Agency’s on-going efforts to pry information from drug companies about post-market adverse events.

Although an important Securities Regulation decision with wide implications for many different industries, Matrixx also serves as a way of increasing consumer access to information that up until now pharmaceutical companies usually kept to themselves.  Writing for the majority Justice Sotomayor noted that although there was no FDA reporting requirement at the time Matrixx was receiving the information but that “[In] 2006, Congress enacted legislation to require manufacturers of over-the-counter drugs to report any “serious adverse event” to the FDA within 15 business days. See 21 U. S. C. §§379aa(b), (c).”    Justice Sotomayor further wrote that, “[a] lack of statistically significant data does not mean that medical experts have no reliable basis for inferring a causal link between a drug and adverse events. As Matrixx itself concedes, medical experts rely on other evidence to establish an inference of causation. “

Based on the Court’s analysis in Matrix that serious “adverse events” need not be statistically significant, it is likely that this decision will prove a useful precedent for the FDA to argue that failure to disclose credible reports of serious adverse events are unlawful.

Although required to disclose “serious” information of adverse harm to the FDA, companies may well have been withholding information from the FDA as well as from shareholders on the grounds that it was not “statistically significant.”  So although not a “health law” case, the effect of this decision should be to increase the information available to the FDA and to consumers themselves.  

To put the decision in context, it is likely that the Court’s decision was influenced by the very public criticisms of Big Pharma by Iowa’s Senator Chuck Grassley  and others for withholding information about adverse events.  The most notable recent examples of this are the withholding of increased cardiac deaths from the drugs Avandia and Vioxx.  Although Avandia has been pulled from the market in Europe, it is still for sale in the U.S. with increased warnings and restrictions.    

I will soon be posting an article on SSRN considering ways to protect insiders who know of potential harms to come forward and this decision is likely to increase the flow of information by preventing companies from distinguishing between “statistically significant” and “non-statistically significant” reports of serious harm.

 -  Guest Blogger Jennifer S. Bard

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