Wednesday, January 31, 2007
Article in the Washington Post -- FDA Revamps Process for Safety of Drugs After Approval, by Shankar Vedantam:
The Food and Drug Administration said yesterday that it is making changes in the way it operates to prevent the kind of drug safety controversies that have dogged the agency in recent years.
Officials outlined plans to better monitor safety problems after drugs are approved and to make internal changes to increase the profile of agency scientists who raise red flags about drugs. The steps were announced in response to a report last year by the congressionally chartered Institute of Medicine (IOM) that called for an overhaul of the FDA's culture and structure following safety controversies over drugs such as the painkiller Vioxx.
Officials said the steps will restore the trust and confidence of Congress and the public. They also pledged a renewed commitment to good science as the best way to counter critics who say the agency is too cozy with drug companies.
"We will fight back against those perceptions and that cynicism," said Steven Galson, head of the agency's Center for Drug Evaluation and Research, the division that evaluates new drugs and that has been at the center of the maelstrom.
A member of the Institute of Medicine panel said the FDA had taken steps in the right direction but had fallen short.
Tuesday, January 30, 2007
Editorial in the Wall Street Journal -- Schumer's Tort Epiphany:
Write about politics long enough and you come to think you've seen everything. But even we didn't expect to see a leading Senate Democrat declare that tort law abuse is making America less economically competitive. Has Chuck Schumer told his colleagues about his epiphany?
Mr. Schumer was knocked off his horse last week on the way to a press conference with Governor Eliot Spitzer and New York City Mayor Mike Bloomberg to discuss the ways that regulation is driving financial business from U.S. shores. Governor Spitzer's presence was so ironic that even he -- not famous for his self-deprecation -- had to joke about it. But the really big news is that Mr. Schumer endorsed a study declaring that tort reform is the single biggest key to retaining U.S. leadership in global finance.
As political conversions go, this is like Dick Cheney endorsing a stronger Congress. Mr. Schumer is chairman of the Democratic Senatorial Campaign Committee, which puts him at the center of fundraising for Democratic candidates. And trial lawyers have been a leading and deep-pocketed constituency for Democrats, donating millions of dollars in each election cycle. Over the last decade, more than 90% of trial lawyer donations have gone to Democrats. In return, the Democratic Senate caucus has been a bulwark against tort reform.
In the Prempro trial of Mary Daniel v. Wyeth, the jury yesterday rendered a verdict for the plaintiffs for $1.5 million in compensatory damages and finding a basis to move to a punitive damages phase, but today the judge ruled as a matter of law that the evidence was insufficient to hold Wyeth liable for punitive damages. In an interesting twist, however, the judge apparently has decided to allow the jury to hear the evidence on punitives and to render a verdict -- under seal -- in case her ruling is reversed on appeal. Here's an excerpt from the Reuters report by Jon Hurdle:
A judge on Tuesday agreed with Wyeth that there was insufficient evidence for a jury to find that the drugmaker acted recklessly in marketing its Prempro hormone replacement therapy, but allowed the punitive damage phase of the trial to proceed pending an appeal of the ruling.
However, Philadelphia Court of Common Pleas Judge Myrna Field ordered that any punitive damage award will not be made public unless an appeals court overturns her ruling.
A jury on Monday found that Wyeth failed to properly warn about the cancer risks associated with Prempro and that the drug was responsible for plaintiff Mary Daniel's breast cancer. It awarded Daniel and her husband some $1.5 million in compensatory damages.
The jury also found that Wyeth's conduct was malicious or showed reckless indifference, a finding that under Pennsylvania law would send the jury back to determine additional punitive damages to be paid by the Madison, New Jersey-based company.
While Field ruled in Wyeth's favor, effectively setting aside that part of the jury's verdict -- a ruling that would limit Wyeth's liability to the $1.5 million -- she agreed to allow punitive damages deliberations to proceed under seal after Daniel's attorneys said they would appeal the ruling.
The judge accepted arguments by lawyers for the plaintiff that a decision by an appeals court to overturn her ruling would necessitate a new trial, and that to keep costs down the jury should be allowed to come up with a punitive damages figure that would be kept under wraps, but could be used by the appeals court if necessary.
As a matter of judicial process, it's comparable to the granting of a renewed motion for judgment as a matter of law (JNOV) after denying the initial motion and allowing the jury to deliberate. The goal is to avoid the inefficiency of a retrial in the event of appellate reversal of the legal ruling. But Judge Field's action presents two twists on the usual situation. First, the judge announced her ruling to the lawyers before proceeding to the punitive damages phase. Even if a judge knows that she intends to grant JNOV, it must be rare for the judge to announce that intention before the jury deliberates, much less before the lawyers present the final round of evidence. Second, the judge apparently ordered that the final phase and the jury's verdict be conducted under seal. Ordinarily, the trial and verdict would be accessible to the public even if the judge chooses to grant JNOV.
In a news account of yesterday's verdict for a plaintiff in the Prempro litigation, an analyst was quoted as saying that Wyeth's exposure is smaller than it would be if the FDA had recalled the product:
Linda Bannister, an analyst at Edward Jones, said Prempro is a minor cloud hanging over the company, with Wyeth's risk limited by the fact that the drug remained on sale. "It's not a situation like Vioxx or fen-phen," she said, referring to the 2004 withdrawal of Merck's arthritis drug Vioxx, and the 1997 recall of two Wyeth drugs used in the fen-phen diet cocktail. ... "If the U.S. Food and Drug Administration advises that a product be removed from the market, a company's (financial) risk is significant," Bannister said, because the product is deemed very defective or potentially harmful.
This raises the interesting question of the relationship between product recalls and liability. The comparison of Merck and Wyeth resonates on a day when Merck is reporting 4th quarter profits down 58% due in part to Vioxx litigation while Wyeth reports 4th quarter profits up 17% due in part to Prempro hormone replacement therapy (HRT) sales. Bannister's point is that if product recalls are triggered by strong scientific evidence of a link between the product and the alleged harm, then they can be expected to correlate with a greater likelihood of liability. Evidence of general causation, after all, bears on both the causation and liability elements of tort claims. She could have added (and perhaps she did; we have only the reporter's snippet of the quote) that a product recall itself is a triggering event for mass litigation, as a recall generates publicity that attracts the attention of lawyers and potential plaintiffs. Thus, it's fair to say that as a general matter, really massive liability tends to accompany products that have been removed from the market. Think asbestos, Dalkon Shield, and fen-phen.
But there's another side to recalls that cuts the other way. To whatever extent the product is causing harm or increasing risk, the longer the product stays on the market, the more potential liability it creates. When the product remains on the market, it's also harder for a defendant to anticipate the future stream of claims and to quantify the remaining risk. In this sense, Prempro resembles other litigation-generating products such as Zyprexa, Oxycontin and tobacco.
If a manufacturer knows that its product creates an unreasonable risk of harm, then most would agree that regardless of regulatory action, the company itself faces a moral, legal, and business imperative to remove the product from the market. But sometimes the evidence is debatable and the moral duty unclear, although the risk of litigation remains high. In those situations, the company faces the difficult decision of how to balance the upsides and downsides -- as to both business and litigation risks -- of keeping a product on the market.
Merck today reported a heavy decline in fourth quarter profits despite an increase in revenues, due in signficant part to litigation over its painkiller Vioxx and osteoporosis treatment Fosamax. Here's an excerpt from a report by Linda Johnson (AP) on BusinessWeek.com -- Merck 4Q Earnings Plummet 58 Percent:
Merck & Co. reported Tuesday that fourth-quarter profit plunged 58 percent despite higher revenues as the drugmaker took a slew of charges for restructuring costs, an acquisition and increased legal reserves, mainly for its withdrawn painkiller Vioxx.
On the litigation front, Merck reported that as of Dec. 31 it faced approximately 27,400 lawsuits, some involving multiple plaintiffs, alleging harm from Vioxx. The company pulled the one-time blockbuster arthritis pill from the market in September 2004 after research showed it increased risk of heart attacks and strokes.
Merck also said it faces about 265 potential Vioxx class-action lawsuits alleging personal injury or economic loss, and has entered about 14,180 agreements with other potential claimants suspending the time limit for them to sue.
The company said it added $75 million to its Vioxx legal defense fund in the quarter, after adding $598 million in the third quarter and $295 million in 2005.
It set aside another $48 million to start a legal defense reserve for lawsuits alleging that Fosamax destroys bone in the jaw; the company faces more than 100 such lawsuits.
The fallout from the disclosure of Zyprexa documents continues and just gets more interesting. Torts Prof has the story of Judge Jack Weinstein's "invitation" yesterday to New York Times reporter Alex Berenson, asking him to voluntarily appear on February 7 to explain how he obtained the sealed documents. According to Judge Weinstein's order, a copy of which may be found on Torts Prof, "This invitation is intended to permit Alex Berenson to confront testimony received at a hearing in this court on January 16-17, 2007 implicating him in a conspiracy to obtain and publish confidential documents sealed by this court." The order includes relevant excerpts from the hearing transcript referencing Alex Berenson, James Gottstein, and David Egilman, and instructs Lilly to "serve a copy of this invitation" on Berenson.
Monday, January 29, 2007
Today, a jury found Wyeth liable to plaintiff Mary Daniel and her husband in a Prempro trial in Pennsylvania state court. Here's an excerpt from the Reuters report:
A state jury in Philadelphia on Monday found Wyeth's hormone replacement therapy (HRT) Prempro was responsible for an Arkansas woman's breast cancer and ordered the U.S. drugmaker to pay $1.5 million in compensatory damages, a court official said.
The jury found that Wyeth was negligent in failing to provide adequate warnings about the breast cancer risk associated with Prempro.
The jury is expected to return, possibly as soon as Tuesday, to decide punitive damages after also finding that Wyeth's conduct was "malicious, wanton, willful or oppressive or showed reckless indifference to the interest of others" in its failure to provide proper warnings about its HRT drugs, taken by millions of women to treat symptoms of menopause.
An article by Anita Lee in yesterday's Sun Herald (Mississippi) -- Insurance Showdown: Here's the Inside Story of How Legal Titans Reached Settlement -- sheds light on the process by which settlement class actions are negotiated. In litigation over Hurricane Katrina insurance coverage, Sheila Birnbaum (who heads the Complex Mass Tort and Insurance Group at Skadden Arps) represents State Farm, and Richard Scruggs (Mississippi mass tort plaintiffs' lawyer who played a central role in the tobacco state attorney general settlement) represents numerous Gulf Coast policyholders. The reporter describes a phone call from Birnbaum to Scruggs in September 2006:
In a telephone interview, Birnbaum said she called Scruggs because he had put out feelers, passed on by local attorneys, that he wanted to talk.
Scruggs recalled in an interview last week: "She said, 'We need to talk. I'm representing State Farm. We'll meet you any time, anywhere and see if we can't find common ground.' That's the way things usually unfold like this on a large scale."
Eventually, they negotiated a settlement on a class action basis, in coordination with a deal between Attorney General Jim Hood and State Farm that ended the state's criminal investigation. They presented it to the federal court last Tuesday:
State Farm and the Scruggs team reached an accord for Scruggs' clients and crafted a class-action settlement for policyholders who have not hired a lawyer - about 8,000 by Hood's estimate. Those who choose to opt out of the settlement could do so.
Hood's negotiations with State Farm were aimed at keeping the company's questionable claims practices out of negotiations with policyholders who take part in the class-action settlement. He said he also pushed to get them the best deal possible, while State Farm pushed back.
Finally, they inked a deal. Hood ended his criminal investigation, but plans to forward evidence to Congress. He also dismissed a civil lawsuit against State Farm in Hinds County Chancery Court that sought full coverage for policyholders. He'll continue to press that suit against other major insurers.
Once Hood and State Farm reached an accord, that airplane finally took off for the Coast, where the proposed settlement between State Farm and the Scruggs group was delivered to the federal courthouse in Gulfport on Jan. 23.
On Friday, Judge L.T. Senter, Jr. rejected the proposed settlement without prejudice. The parties hope to revise the deal to address the court's concerns.
Sunday, January 28, 2007
Article in the Washington Post -- Bill Would Honor Sick Sept. 11 Workers, by the Associated Press:
The museum planned for ground zero should include a memorial to workers who died after becoming ill during recovery and cleanup of World Trade Center debris, two state lawmakers said Sunday.
The Bush administration, along with state and local governments, have been criticized for being slow to acknowledge that many people developed debilitating illnesses from exposure to toxic materials at ground zero.
The event came a day after the funeral of police officer Cesar Borja, 58, who died of lung disease believed to have resulted from ground zero recovery activity.
Friday, January 26, 2007
Article in the Chicago Tribune -- Brain injury tied to halt in smoking: Research on neural circuitry offers hope of powerful treatment to break nicotine's grip, by Michael Stroh:
In a finding that could lead to powerful new treatments for smokers unable to quit, scientists have discovered that people who experienced stroke damage to a prune-sized spot deep within the brain suddenly lost the urge to light up.
The research, published Friday in the journal Science, appears to underscore nicotine's far-reaching grip on a smoker's neural circuitry--and how much there remains to learn about it. Until now, addiction researchers have largely ignored the brain structure implicated in the study--a region called the insula.
"It's a really tremendous paper, one that points us in a whole new direction," says Steven Grant, who serves as chief of the clinical neuroscience branch of the government's National Institute on Drug Abuse. He was not involved in the study. "It says: This is a brain area the addiction field needs to focus a lot of attention on."
While intentionally inflicting damage on a smoker's brain is ethically out of the question, scientists said it may be possible to mimic the effect of insula injury with drugs or other therapies. Such treatments also may help people addicted to chemicals other than nicotine, researchers said.
The New York Times also has an article -- In Clue to Addiction, Brain Injury Halts Smoking, by Benedict Carey.
American Conference Institute is hosting the 4th National In-House Counsel Conference on Managing Complex Litigation on February 6-7 in New York. I'll be speaking on Ethical Constraints in Complex Litigation, focusing on joint defense groups, aggregate settlements, and conflicts of interest. Other speakers include special masters Kenneth Feinberg and Gregory Miller, Judges Mark Bernstein and Richard Kramer, and a mix of in-house lawyers and defense litigators including Anne Cohen, Steven Glickstein, David Herr, and John Hooper.
The Eastern District of Pennsylvania yesterday denied class certification in Blain v. Smithkline Beecham (E.D. Pa. Jan. 25, 2007). The plaintiffs sought certification of a Rule 23(b)(3) class action of all persons whose children under age 18 committed or attempted suicide while using the antidepressant drug Paxil. Judge Savage found that the class failed to meet typicality, adequacy, predominance, and superiority. Individual issues of causation, damages, and defenses would overwhelm the common issues, the court found, and differences in state tort law would make the class action unmanageable. Beck and Herrmann offer a defense-oriented analysis, including a handy list of federal cases that have rejected class actions for prescription medical product cases, as well as an argument against the American Pipe tolling rule for the statute of limitations (via Point of Law).
Thursday, January 25, 2007
Samuel Issacharoff has posted on SSRN his paper Settled Expectations in a World of Unsettled Law: Choice of Law after the Class Action Fairness Act, forthcoming in Columbia Law Review. The problem of variations in applicable state law, of course, has been a key obstacle to certification of nationwide or multistate class actions in mass tort cases such as Castano (tobacco), Rhone-Poulenc (blood products), Bridgestone-Firestone (tires), and Amchem (asbestos). Here's the abstract:
This Essay examines the pressure placed upon choice of law doctrine by the newly enacted Class Action Fairness Act (CAFA). The core argument is that current choice of law doctrine, which assumes fidelity to the forum state choice of law rules as its basic premise, corresponds poorly to the national scope of economic activity in cases brought into federal court under CAFA. The Essay argues that there needs to be some conformity between the national scale of contemporary economic activity and the state-by-state presumption of inherited conflict of laws doctrine in order to provide some sensible legal oversight of national market conduct. Because of the multiplicity of potential forums for litigation of national market activity, the inherited doctrines of Klaxon Co. v. Stentor Electric Manufacturing Co. and Erie Railroad Co. v. Tompkins do little to provide settled expectations about the substantive laws governing broad-scale economic conduct.
The Essay offers an approach that should guide choice of law rules in the context of national market cases based on the need to facilitate common legal oversight of undifferentiated national market activity. The claim here is that conduct that arises from mass-produced goods entering the stream of commerce with no preset purchaser or destination should be treated as just that: goods in the national market. In the absence of national choice of law rules, this Essay suggests that courts should, as a default rule, apply the laws of the home state of the defendant to all standardized claims, regardless of the situs of the final injury. The upshot of this approach is to suggest a path for future development of national market cases that have been brought into the federal courts as a result of CAFA.
Article in the Wall Street Journal -- New Jersey Appeals Court Revives Proposed Vioxx Class-Action Suit, by Peter Loftus:
A New Jersey appeals court has given new life to a proposed class-action lawsuit that seeks to force Merck & Co. to pay for medical-surveillance tests for people who took Vioxx but haven't yet been diagnosed with health problems.
Merck withdrew the Vioxx painkiller from the market in September 2004 after a study showed it elevated the risk of heart attacks and other cariovascular events.
A state court judge had dismissed the proposed class action in 2005. But in a ruling posted online Tuesday, the Superior Court of New Jersey's appellate division reversed the lower-court ruling and sent the case back to the trial judge for further proceedings.
Article in the Wall Street Journal -- Pennsylvania Plaintiff Drops Vioxx Lawsuit Against Merck, by Sara Leitch:
Merck & Co. said a Pennsylvania woman dropped a lawsuit she had filed against the company, alleging that its Vioxx drug caused her husband's heart attack and death.
The Whitehouse Station, N.J., pharmaceutical company said the suit, filed by Angela McCool, would have been the first Vioxx case to go to trial in Philadelphia. The trial was scheduled to begin in Philadelphia State Court five weeks from now.
In its trial scorecard, the Wall Street Journal notes: "Merck has won four federal cases over Vioxx and lost one. In state courts, the company has won four and lost three. Among state cases, there was one order for a retrial (New Jersey) after jurors sided with Merck and two mistrials (California)."
Wednesday, January 24, 2007
Thomas Cohen of the U.S. Bureau of Justice Statistics has posted a working paper on SSRN entitled Do Federal and State Courts Differ in How They Handle Civil Trial Litigation: A Portrait of Civil Trials in State and Federal District Courts. Here's the abstract:
Using data from Civil Justice Survey of State Courts and the Administrative Office of the U.S. Courts, this article compares general civil (e.g., tort, contract, and real property) jury trials concluded in a sample of state courts and all federal district courts from 1992-2001. The study's key findings are: (1) that the types of civil cases coming before state and federal juries differ substantially; (2) that overall plaintiff win rates are nearly the same in both state and federal courts; (3) that the damages awarded to plaintiffs in federal courts are substantially higher compared to their state counterparts; (4) that although the vast majority of jury trials take place in the state courts, the proportion of all damage awards accounted for by the federal courts is fairly significant; (5) that state courts took substantially longer to dispose of civil jury trials than federal courts; and (6) that trend data show similar patterns of declining trials and stable plaintiff win rates from 1992-2001 in both court systems.
In a reprise of their clashes from the first Humeston trial in 2005, New Jersey Judge Carol Higbee scolded Merck's lead trial counsel Diane Sullivan for unprofessional behavior during opening statements in the consolidated Humeston and Hermans Vioxx trial that began this week in Atlantic City. Here's an excerpt from yesterday's report by David Voreacos of Bloomberg -- Merck Lawyer Admonished for Arguments in Vioxx Trial:
Merck & Co.'s lead attorney at a New Jersey trial over its Vioxx painkiller acted unethically and unprofessionally in court yesterday during her opening statements, the judge said.
Attorney Diane Sullivan repeatedly violated pre-trial orders on what statements were allowed during the first phase of a trial over whether Vioxx caused the heart attacks of two men, Superior Court Judge Carol Higbee said today outside the jury's presence. Sullivan's violations included talking about Merck's cancer research and noting the home states of the men, Higbee said.
"It is unprofessional, it is unethical, and it is contemptuous of this court,'' Higbee said in New Jersey state court in Atlantic City. "She deliberately violated my orders on repeated occasions. I am not going to deal with this kind of unprofessionalism. I am not going to let it taint this trial.''
Among other things, Judge Higbee admonished Sullivan for showing the jury a slide of plaintiff's lawyer Mark Lanier that differed from the photo the judge had approved, and for impermissibly suggesting to the jury that Merck might sell Vioxx again.
Tuesday, January 23, 2007
Article in today's Trenton Times -- Attorneys lay out cases to open double Vioxx trial -- reporting on the opening statements of Mark Lanier and Diane Sullivan in the consolidated New Jersey Vioxx trial of plaintiffs Humeston and Hermans.
Editorial in today's New York Times -- Nicotine Manipulation Confirmed:
Any doubts that the tobacco industry has surreptitiously raised the nicotine content of cigarettes should be laid to rest by a study from researchers at the Harvard School of Public Health. They confirmed last year’s discovery of the nicotine increase by the Massachusetts Department of Public Health and went on to identify how the tobacco companies designed their cigarettes to accomplish this.
These manipulations were discovered because Massachusetts requires manufacturers to use a more realistic test to measure how much nicotine is deliverable to typical smokers and requires companies to report design features of their cigarettes. When Harvard researchers reanalyzed the data they found that the nicotine yield per cigarette rose by an average of 11 percent between 1998 and 2005, a conclusion contested by the industry.
Harvard researchers concluded that the companies managed this by using tobacco containing a higher concentration of nicotine and perhaps also by slowing the rate at which cigarettes burned — thus increasing the number of puffs per cigarette. The companies presumably hoped that additional nicotine would hook more new customers and keep old ones from breaking the habit.