January 16, 2009
GAO Criticizes FDA
The New York Times reports that the Government Accountability Office recently criticized the Food and Drug Administration's device approval process. Here's an excerpt:
Created in 1976, the F.D.A.’s process for approving devices divides the products into three classes and three levels of scrutiny. Tongue depressors, reading glasses, forceps and similar products are called Class I devices and are largely exempt from agency reviews. Mercury thermometers are Class II devices, and most get quick reviews. Class III devices include pacemakers and replacement heart valves.
Congress initially allowed many of the Class III products to receive perfunctory reviews if they were determined to be nearly identical to devices already on the market in 1976 when the rules were changed. But the original legislation and a companion law enacted in 1990 instructed the agency to write rules that would set firm deadlines for when all Class III devices would have to undergo rigorous testing before being approved.
The agency laid out a plan in 1995 to write those rules but never followed through, the accountability office found. The result is that most Class III devices are still approved with minimal testing.
Agency officials told the accountability office investigators that writing the new rules was still important.
“When asked for their time frame for doing so, however, the officials did not provide one,” the report stated.
Dr. Susan Alpert, the chief regulatory officer of Medtronic, the leading maker of heart devices, said that many of the Class III devices that currently receive less scrutiny before approval would, once the agency completed its overhaul, be reclassified as less risky Class II devices.
“So the impression that F.D.A. is approving new technologies with little review is erroneous,” Dr. Alpert said.
Still, she said, “there is no question” that F.D.A. needs to fix its reclassification process.
January 15, 2009
Today's $1.4 billion Zyprexa deal
As expected, the Justice Department and Eli Lilly today announced that Lilly will pay $1.4 billion in a criminal plea deal and civil settlement. The deal includes $615 million as a criminal penalty and $800 million to settle civil claims by the United States and over 30 states. Speculation about the negotiations goes back nearly a year.
Here are some details from today's report on Bloomberg:
Eli Lilly & Co. will plead guilty to a criminal charge of promoting its antipsychotic drug Zyprexa for unapproved uses, pay $1.42 billion in fines and submit to U.S. monitoring against future lawbreaking. ...
Lilly resolved federal and state probes into how it marketed the drug and will plead guilty in U.S. District Court in Philadelphia in the next few weeks, the Indianapolis-based drugmaker said in a statement. Lilly said it promoted Zyprexa in elderly people to treat dementia, a use not approved by the Food and Drug Administration, between September 1999 and March 2001, a criminal violation of the Food, Drug and Cosmetic Act. ...
As part of the settlement, Lilly agrees to operate under a federal monitor’s review for five years.
Twelve states' claims remain unresolved.
Two things strike me about the deal. First, it is huge, and it had to be. From the perspective of the Department of Justice, the U.S. Attorney's Office, and the state attorneys general, anything less than a billion would have seemed an ineffective deterrent given the revenues that Zyprexa generated. In an era of multi-billion dollar revenues for blockbuster drugs, we are bound to see more 10-figure resolutions.
Second, today's deal drives home how multi-faceted mass tort litigation has become. I used to think of "mass tort litigation" as, well, litigation involving massive numbers of tort claims. The Zyprexa litigation is mass tort litigation, but "the Zyprexa litigation" includes wrongful death claims, personal injury claims, consumer fraud claims, securities claims, third-party payor claims, federal and state government civil claims, and federal criminal charges.
When Eli Lilly settled the bulk of the tort claims, it wasn't nearly done with the Zyprexa litigation. Lilly settled tens of thousands of individual claims through mass aggregate settlements -- 8000 plaintiffs for about $700 million in 2006 and 18,000 plaintiffs for about $500 million in 2007. Judge Jack Weinstein in the MDL treated the litigation and settlement as a "quasi-class action." At the time, one might have thought that those gargantuan settlements resolved the bulk of the Zyprexa dispute. With today's deal, we are reminded that the personal injury and wrongful death claims were only one piece of the Zyprexa litigation.
Over a billion dollars in tort settlements. Tens of millions more for state consumer protection claims. Over a billion dollars today for the government criminal and civil claims. A billion here, a billion there, and pretty soon we're talking about real money.
January 14, 2009
Zyprexa -- Possible Settlement of Criminal and Civil Claims
Eli Lilly Co. is expected to pay $1.4 billion to settle the government's criminal and civil claims against the company in connection with its marketing of Zyprexa, according to this article in the New York Times, which notes the record-breaking size of the deal:
Eli Lilly, the drug company, is expected to agree as soon as Thursday to pay $1.4 billion to settle criminal and civil charges that it illegally marketed its blockbuster antipsychotic drug Zyprexa for unauthorized use in patients particularly vulnerable to its risky side effects. The amount of the settlement is a record sum for so-called corporate whistle-blower cases, which are federal lawsuits prompted by tips from company employees or former employees.
Zyprexa is approved for schizophrenia and bipolar disorder. Lilly is charged with pushing doctors to prescribe the drug for unruly children and nursing home patients, despite the increased risks attendant to use of the drug by the young and the elderly. The Times article points out that a $1.4 billion fine, while substantial, may represent as little as one year's worth of off-label-use Zyprexa revenues, as Zyprexa has generated over $39 billion in revenues since 1996.
According to the article, more information may come out Thursday:
The government’s case will remain sealed until at least Thursday, when a judge is expected to approve the settlement. People involved in the negotiations say that prosecutors pressed for a resolution in the waning days of the Bush administration to avoid having to get another set of approvals from new bosses at the Justice Department in Washington.
While the settlement is intended to resolve all pending government claims, it is unclear whether all states, which are parties to the case through the federal-state Medicaid program, have agreed to terms.
January 11, 2009
Black Robes, White Coats
Though focused on criminal settings, the recently published book Black Robes, White Coats, by Professor Rebecca C. Harris (Washington & Lee, Dep't of Politics), looks interesting. Here's a summary:
Scientific evidence is commonplace in today’s criminal trials. From hair and handwriting analysis to ink and DNA fingerprints, scientists have brought their world to bear on the justice system.
Combining political analysis, scientific reasoning, and an in-depth study of specific state supreme court cases, Black Robes, White Coats is an interdisciplinary examination of the tradition of “gatekeeping,” the practice of deciding the admissibility of novel scientific evidence. Rebecca Harris systematically examines judicial policymaking in three areas —forensic DNA, polygraphs, and psychological syndrome evidence—to answer the question: Why is scientific evidence treated differently among various jurisdictions? These decisions have important implications for evaluating our judicial system and its ability to accurately develop scientific policy.
While the interaction of these professions occurs because the white coats often develop and ascertain knowledge deemed very useful to the black robes, Harris concludes that the black robes are well positioned to render appropriate rulings and determine the acceptability of harnessing a particular science for legal purposes.