Friday, May 16, 2014

Judging Multidistrict Litigation

I posted a new article to SSRN this morning that's been a labor of love for well over a year now.  I'm excited about this new piece for a few reasons.  

First, it debuts an original data set of all lead lawyers appointed in 72 product liability and sales practices MDLs that were pending as of May 14, 2013.  As such, it's the only paper (that I know of) that includes empirical evidence on plaintiffs-side repeat players appointed to leadership positions.  (Yes, it includes a list of some of the most entrenched repeat lawyers and law firms as an appendix.)  (If this is of interest, have a look at Margaret Williams, Emery Lee, and Catherine Borden's recently published paper in the Journal of Tort Law titled Repeat Players in Federal Multidistrict Litigation, which looks at all plaintiffs' attorneys in MDLs using social network analysis.) 

I also explain why appointing a leadership group comprised of predominately repeat players can cause inadequate representation problems.  For example, repeat players playing the long game have rational, economic incentives to curry favor with one another, protect their reputations, and develop reciprocal relationships to form funding coalitions and receive client referrals.  As such, extra-legal, interpersonal, and business concerns may govern their interactions and trump their agency obligations to uniquely situated clients who could threaten to bust a multi-million dollar deal.  Non-conforming lawyers may be ostracized and informally sanctioned, which promotes cooperation, but deters dissent and vigorous representation.  Over time, expressing contrary opinions could brand the dissenting lawyer a defector, which could decrease lucrative leadership opportunities.  (Other reasons abound, which I explain on pages 25-27 of the paper.) 

Second, it provides some much needed guidance for transferee judges.  Although the Manual for Complex Litigation remains the go-to guide for transferee judges, it hasn't been updated in 10 years.  So much has changed since the fourth edition was published in 2004.  Accordingly, in "Judging Multidistrict Litigation," I suggest best practices for appointing and compensating lead lawyers.  Judges can compensate lead lawyers on a coherent and more predictable basis by distilling current theories down to their common denominator: quantum meruit.  Quantum-meruit awards would align fees with other attorney-fee decisions and compensate leaders based on the value they actually add.  

Third, as anyone familiar with the area knows, settlement review in nonclass litigation is controversial at best.  After judges expressly deny class certification they then harken back to Rule 23 and their "inherent equitable authority" to comment on settlements.  So, employing a quantum-meruit theory for awarding lead lawyers' attorneys' fees would give judges a legitimate private-law basis for scrutinizing settlements.  Because courts must evaluate the case's success to determine how much compensation is merited, it could likewise help stymie a trend toward self-dealing where repeat players insert fee provisions into master settlements and require plaintiffs and their attorneys to "consent" to fee increases to obtain settlement awards.

The article is forthcoming in N.Y.U. Law Review in April of 2015, so I still have a bit of time to tinker with it and welcome comments in the interim (eburch at uga.edu).  In the meantime, here's the formal SSRN abstract.

High-stakes multidistrict litigations saddle the transferee judges who manage them with an odd juxtaposition of power and impotence. On one hand, judges appoint and compensate lead lawyers (who effectively replace parties’ chosen counsel) and promote settlement with scant appellate scrutiny or legislative oversight. But on the other, without the arsenal class certification once afforded, judges are relatively powerless to police the private settlements they encourage. Of course, this power shortage is of little concern since parties consent to settle. 

Or do they? Contrary to conventional wisdom, this Article introduces new empirical data revealing that judges appoint an overwhelming number of repeat players to leadership positions, which may complicate genuine consent through inadequate representation. Repeat players’ financial, reputational, and reciprocity concerns can govern their interactions with one another and opposing counsel, often trumping fidelity to their clients. Systemic pathologies can result: dictatorial attorney hierarchies that fail to adequately represent the spectrum of claimants’ diverse interests, repeat players trading in influence to increase their fees, collusive private deals that lack a viable monitor, and malleable procedural norms that undermine predictability.

Current judicial practices feed these pathologies. First, when judges appoint lead lawyers early in the litigation based on cooperative tendencies, experience, and financial resources, they often select repeat players. But most conflicts do not arise until discovery and repeat players have few self-interested reasons to dissent or derail the lucrative settlements they negotiate. Second, because steering committees are a relatively new phenomenon and transferee judges have no formal powers beyond those in the Federal Rules, judges have pieced together various doctrines to justify compensating lead lawyers. The erratic fee awards that result lack coherent limits. So, judges then permit lead lawyers to circumvent their rulings and the doctrinal inconsistencies by contracting with the defendant to embed fee provisions in global settlements—a well recognized form of self-dealing. Yet, when those settlements ignite concern, judges lack the formal tools to review them. 

These pathologies need not persist. Appointing cognitively diverse attorneys who represent heterogeneous clients, permitting third-party financing, encouraging objections and dissent from non-lead counsel, and selecting permanent leadership after conflicts develop can expand the pool of qualified applicants and promote adequate representation. Compensating these lead lawyers on a quantum-meruit basis could then smooth doctrinal inconsistencies, align these fee awards with other attorneys’ fees, and impose dependable outer limits. Finally, because quantum meruit demands that judges assess the benefit lead lawyers’ conferred on the plaintiffs and the results they achieved, it equips judges with a private-law basis for assessing nonclass settlements and harnesses their review to a very powerful carrot: attorneys’ fees.

May 16, 2014 in Aggregate Litigation Procedures, Class Actions, Ethics, Informal Aggregation, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Settlement, Vioxx, Zyprexa | Permalink | Comments (0) | TrackBack (0)

Sunday, September 19, 2010

Zyprexia Class Action Nixed by 2d Circuit

The Second Circuit has reversed Judge Weinstein's certification of a RICO class action brought by third party payors against Eli Lilly for excessive pricing of the drug Zyprexia.  Essentially the class action was felled on the issue of causation requiring individualized proof rather than generalized proof of causation (i.e. that the defendant's misrepresentations caused plaintiffs to pay a higher price for the drug than they otherwise would have) according to the circuit court.

You can find the opinion here.  You can find the defense side take from the folks over at Drug and Device Law Blog here.

ADL (h/t Torts Prof Blog).

September 19, 2010 in Class Actions, Zyprexa | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 23, 2010

Litigating Together: Social, Moral, and Legal Obligations

I have posted a draft of the last in a trilogy of articles on nonclass aggregation and thought I would provide a brief retrospective for the interested reader.  The first article in the trilogy is Procedural Justice in Nonclass Aggregation, which explains in-depth the problems and risks presented by nonclass aggregation.  It observes that systemic legitimacy and compliance with judicial decisions hinges on ensuring procedural justice, but that our current system for handling large-scale litigation fails to provide a number of key procedural-justice components including the preference for adversarial litigation, participation opportunities, impartiality, and error correction.  These institutional shortcomings are due in large part to the trade-offs inherent in large-scale litigation.  Those trade-offs include that "litigation is no longer adversarial despite litigants’ preferences, but effective individual litigation is too costly to pursue; aggregate settlements provide few participation opportunities and no avenues for appeal or error correction despite potential conflicts, but, without aggregate settlements, cost and delay could be staggering and the relief may come too late; mediators or special masters might afford claimants additional participation opportunities, but process is then less adversarial and may suffer from legitimacy problems."  Id. at 46. 

The second article in the trilogy is Litigating Groups. In Litigating Groups, I laid the theoretical groundwork for an alternative to our current approach by borrowing insights from other disciplines—social psychology, moral and political philosophy, and behavioral law and economics—and bringing those notions of commitment, community, and groups to bear on nonclass aggregation.  By relying on the other-regarding preferences that tend to form from group membership, I argued that groups of plaintiffs may have or could be encouraged to develop organic or indigenous origins such that they form moral obligations to one another that are reinforced by social and personal norms. (I have also summarized these contentions in a short response to Judge Weinstein - A New Way Forward: A Response to Judge Weinstein.)

The current (and latest) article is the third and final piece in the trilogy.  It's titled Litigating Together, Social, Moral, and Legal Obligations.  This Article translates the theoretical foundation laid in Litigating Groups into concrete, feasible procedures for litigating together.  Although Litigating Groups maintained that plaintiffs who form groups will likely develop other-regarding preferences toward their fellow group members, it did not fully formulate procedures for promoting cooperation and group formation; decide when, whether, or how to impose sanctions when norms and moral obligations fail; contemplate incentives to join the group; or determine when exiting the group is appropriate.  Accordingly, this Article takes up those hard questions as well as the challenge of determining whether and how substantive and procedural law should enforce moral obligations once a certain level of moral interconnectedness exists.  Here's the SSRN abstract:

In a post-Class Action Fairness Act world, the modern mass-tort class action is disappearing. Indeed, multi-district litigation and private aggregation through contracts with plaintiffs’ law firms are the new mass-tort frontier. But something’s amiss with this “nonclass aggregation.” These new procedures involve a fundamentally different dynamic than class actions: plaintiffs have names, faces, and something deeply personal at stake. Their claims are independently economically viable, which gives them autonomy expectations about being able to control the course of their litigation. Yet, they participate in a familiar, collective effort to establish the defendant’s liability. They litigate from both a personal and a collective standpoint.

Current scholarship overlooks this inter-personal dimension. It focuses instead on either touting the virtues of individual autonomy or streamlining mass litigation to maximize social welfare. Both approaches fail to solve the unique problems caused by these personal dimensions: temptations for plaintiffs to hold out and thus derail settlements demanding near unanimity, outliers who remain disengaged from the group but free-ride off of its efforts, and subgroups within the litigation whose members compete for resources and litigation dominance to the group’s detriment. Accordingly, this Article has two principal objectives: one diagnostic, one prescriptive. The diagnosis is this: current procedures for handling nonclass aggregation miss the mark. Process isn’t just an exercise in autonomy or a handy crutch for enforcing substantive laws. Procedures can serve as a means for bringing plaintiffs together, plugging their individual stories into a collective narrative, making sense of that narrative as a community, reasoning together about the right thing to do, and pursuing that end collectively. Thus, the prescription is litigating together.

Along the way, I've developed a few aspects of this overall project in greater detail for various symposia:

 In Aggregation, Community, and the Line Between, I provided a more detailed account of the moral and political theory animating this "litigating together" approach.  This article contends that encouraging plaintiffs to form groups and reach decisions through deliberation relies on a mix of individual consent and moral obligation. Allowing plaintiffs to exercise their free will when deciding whether to associate with others preserves the liberal tenet of self-determination and escapes the anti-democratic criticism leveled at class actions. Yet, a purely liberal approach fails to capture the obligatory aspect of reciprocal promises to cooperate and the communal obligations that attach. Although plaintiffs voluntarily enter into the group, once they are group members and have tied together their collective litigation fates, they should not be permitted to exit when doing so violates their commitments. Of course, the community itself determines the content of its members’ rights and obligations to one another. Thus, the article concludes by explaining the rationale for group autonomy in terms of pluralism and communitarianism. 

In Group Consensus, Individual Consent (which is still very much "in progress," as they say), I explore how this project relates to sections 3.17 and 3.18 of the American Law Institute’s Principles of the Law of Aggregate Litigation and use those principles as a lens for exploring thematic questions about the value of pluralism, group cohesion, governance, procedural justice, and legitimacy in nonclass aggregation.  Both this project and Litigating Together: Social, Moral, and Legal Obligations are still very much in progress, so, as always, I welcome your comments. 

I'm extremely grateful for all of the helpful comments and criticisms of so many scholars in the field along the way.  I'm also looking forward to tackling new and different projects that have been waiting in the wings for some time now.

ECB

March 23, 2010 in Aggregate Litigation Procedures, Class Actions, Informal Aggregation, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Resources - Publications, Settlement, Vioxx, Zyprexa | Permalink | Comments (0) | TrackBack (0)

Monday, December 7, 2009

The Individual Proof Rule

On December 1, 2009 Judge Weinstein issued a ruling granting partial summary judgment to the pharma company Eli Lilly in the lawsuit by the state of Mississippi concerning Zyprexia.  The opinion can be found here.  The folks over at Drug and Device Law blog discuss the opinion in which they colorfully state "Pigs Get Fat, Mississippi Got Slaughtered." 

The opinion is long, but it beautifully lays out the issues of aggregate proof in modern litigation.  Judge Weinstein's discussion of the caselaw concerning the Individual Proof Rule is masterful.  (slip op 64 - 96).  Although Weinstein notes the certification of a Third Party Payor's class action based on aggregate proof (253 FRD 69 (EDNY 2008)), its survival is in doubt because of "the majority of the Courts of Appeals' hostility to the use of aggregate proof...." (slip op at 96).

The Drug and Device Law folks also rightly point to Weinstein's characterization of three "types" of class actions (slip. op at 65):

1. Rule 23 Class Actions - this is what we mean when we say class action, a civil action that can be certified, to which Rule 23 protections apply and which binds all absent class members that do not opt out.

2. Quasi Class Actions - a new category that really ought to be called aggregate litigation. Not a certified class action but a collection of similar cases through an MDL that are resolved together. 

3. Structural Class Actions - where an individual plaintiff brings claims based on the underlying claims of large numbers.  In this case, the state of Mississippi was bringing claims for reimbursements it provided to thousands of individual patients for their medical costs incurred as a result of their use of Zyprexia.  Weinstein explains "In effect, Mississippi's individual claim is structured on the foundation of many thousands of conceptually separate claims, coordinated and aggregated by the State for purposes of recovering a portion of its overall Zyprexa-related costs..."

Quasi class actions, in my view, is really another way of saying aggregate litigation.  There's nothing really new about it and there's nothing binding about it as a formal matter. Informally (and that's the quasi part) it can probably feel pretty binding to the plaintiffs.  The lengths to which the lawyers in Vioxx went to try to bind plaintiffs and the broohaha that resulted in the legal ethics world illustrates both the non-binding and the feeling of being bound.  If the ALI proposals on Aggregate Litigation became the law, that would be a different story.  

The structural class actions concept brings to mind punitive damages, especially if you think punitive damages are a form of deterrence, intended to address spillover effects of defendant's conduct that is not accounted for in the compensation part of the lawsuit.  See Catherine Sharkey, Punitive Damages as Societal Damages 113 Yale L. J. (2003) (unfortunately you can't download it off SSRN, the link is only to an abstract).  This is the part of punitive damages that the Supreme Court was trying to carve out in Phillip Morris v. Williams, but I think conceptually that is impossible to do.  On that note, interested readers may want to take a look at Richard Nagareda, Embedded Aggregation in Civil Litigation, forthcoming in the Cornell Law Review and available on SSRN.

ADL

December 7, 2009 in Aggregate Litigation Procedures, Class Actions, Procedure, Zyprexa | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 27, 2009

South Carolina Settles Zyprexa Off-Label Marketing Case for $45 Million

Hat tip to the TortProf blog on this one.  You can see their post here.

ADL

October 27, 2009 in Zyprexa | Permalink | Comments (0) | TrackBack (0)

Friday, August 14, 2009

Thomas Main on The Procedural Foundation of Substantive Law

SSRNProfessor Thomas Main (Univ. of Pacific) has posted to SSRN his article, The Procedural Foundation of Substantive Law, 87 Wash. Univ. L. Rev. (forthcoming 2009).  Here's the abstract:


The substance-procedure dichotomy is a popular target of scholarly criticism because procedural law is inherently substantive. This article argues that substantive law is also inherently procedural. I suggest that the construction of substantive law entails assumptions about the procedures that will apply when that substantive law is ultimately enforced. Those procedures are embedded in the substantive law and, if not applied, will lead to over- or under-enforcement of the substantive mandate. Yet the substance-procedure dichotomy encourages us to treat procedural systems as essentially fungible—leading to a problem of mismatches between substantive law and unanticipated procedures. I locate this argument about the procedural foundation of substantive law within a broader discussion of the origin and status of the substance-procedure dichotomy.


BGS

August 14, 2009 in Mass Tort Scholarship, Procedure, Zyprexa | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 6, 2009

Weinstein: Some Pessimism About Aggregate Litigation

Judge Weinstein has published a short essay on the administration of complex litigations in a new on-line publication of the Cardozo Law Review called De Novo.  The essay, entitled "Preliminary Reflections on the Administration of Complex Litigations" describes a few litigations in which the Judge acted as architecht of a large-scale settlement (what has been described as a quasi-administrative agency).

Judge Weinstein closes on a pessimistic note, arguing that the appellate courts have been so inhospitable to class actions and aggregations that it will now fall to regulators to prevent mass claims rather than the courts to adjudicate them.  He writes: "There is a general hostility, I believe, particularly at the appellate level, to class actions and other devices for efficient administration of mass litigation."  And he ends by writing "In the end, I must reluctantly conclude that the law—and certainly I—have failed to rise sufficiently to meet the challenges of modern litigation.  We have not served the people as well as we should have."

The model for adjudication of mass torts was initially individual litigation, which gave way in the 1980's and 1990's to an administrative model.  (For a great article making this argument see Richard Negareda, From Tort to Adminsitration in the Michigan Law Review - which for some reason the author has not put on SSRN, but when he does I shall link to it).   Today the adminsitrative model still has some traction, but it seems that things are shifting.  Zyprexia and Vioxx are far different than Agent Orange was.  We're seeing a different type of judicial involvement which is geared more towards information gathering than actual adjudication, more private control over settlements, the total failure of the class action device to offer closer and the mechanism for an administrative regime.  So what is next for mass torts?  Can the current developments still be described as an "administrative" regime or is this something closer to an insurance model?

ADL

May 6, 2009 in Aggregate Litigation Procedures, Class Actions, Mass Tort Scholarship, Settlement, Vioxx, Zyprexa | Permalink | Comments (0) | TrackBack (0)

Friday, April 3, 2009

5th Circuit Permits "Learned Intermediary" Defense in Zyprexa

Alison Frankel, of the American Lawyer, reports that the Fifth Circuit has given the green light to the "learned intermediary defense" in the Zyprexa product liability suits.  The defense is based on the doctor (the learned intermediary) warning the patient of prescription drug side effects.  Here's a link to the Fifth Circuit opinion and an excerpt of the article:

The facts in the Zyprexa case are heartbreaking. The victim, Philip Ebel, suffered from crushing headaches, for which he tried no fewer than 47 different treatments. His doctor in Texas, in consultation with a neurologist from a headache clinic in Michigan, finally prescribed Zyprexa -- an anti-psychotic prescribed off-label for headaches. Ebel took Zyprexa for four months before killing himself in 2002.

His doctor testified at a deposition that he was aware of Zyprexa's side effects, including an increased risk of suicide, and that he told Ebel about them. The 5th Circuit, in agreement with the lower court, ruled that because Ebel and his doctor were aware of the risks, Lilly's alleged failure to warn could not be "a producing cause" of Ebel's death.

Ebel's lawyer, Andy Vickery of Houston's Vickery, Waldner & Mallia, told the Litigation Daily that the 5th Circuit is behind the times when it comes to the learned intermediary defense. He said that courts in West Virginia, Oregon and New Mexico have all recently rejected it. "It's a travesty of justice when we cede the case to prescribing physicians who inevitably have an agenda of their own," said Vickery, who is also the plaintiffs lawyer in the Paxil case recently decided by the 5th Circuit. "Their rulings are a complete anachronism, a complete miscarriage of justice."

ECB

April 3, 2009 in Zyprexa | Permalink | Comments (0) | TrackBack (0)

Thursday, 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. 

HME

January 15, 2009 in FDA, Settlement, Zyprexa | Permalink | Comments (0) | TrackBack (0)

Wednesday, 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.

HME

January 14, 2009 in FDA, Settlement, Zyprexa | Permalink | Comments (1) | TrackBack (0)

Sunday, December 28, 2008

One Take on the Worst Decisions of 2008

Wednesday, October 8, 2008

Lilly Settles Zyprexa Marketing Claims with States for $62 Million

Article in the New York Times -- 33 States to Get $62 Million in Zyprexa Case Settlement, by Alex Berenson.  Here's an excerpt:

Eli Lilly has agreed to pay $62 million to 33 states to settle claims that it improperly marketed Zyprexa, its top-selling drug, to patients who did not have schizophrenia or bipolar disorder, its only approved uses.

The settlement, to be announced Tuesday, ends an 18-month investigation led by the offices of the attorneys general of Illinois and Oregon, which contended that Lilly had violated consumer protection laws by urging doctors to prescribe Zyprexa to patients who did not need it.

It is the largest settlement paid by a drug company in a state consumer protection case, topping the $58 million that Merck paid to settle similar allegations about Vioxx, lawyers for the states said.

The agreement may also be a sign that a much larger deal is near in a separate but related civil and criminal investigation led by federal prosecutors in Philadelphia. In that case, Lilly is expected to pay more than $1 billion in fines and restitution to states and the federal government and may also plead guilty to a misdemeanor criminal charge related to off-label marketing of Zyprexa.

BGS

October 8, 2008 in Zyprexa | Permalink | Comments (1) | TrackBack (0)

Monday, September 8, 2008

Judge Weinstein Unseals Zyprexa Documents

Noting that "Lilly's legitimate interest in confidentiality does not outweigh the public interest in disclosure," Judge Jack B. Weinstein unsealed formerly confidential documents on links between Zyprexa, obesity, and high blood sugar.  Both the New York Law Journal and the New York Times have articles on the topic.  As I've written in the past, transparency in matters affecting the public is crucial to judicial institutional legitimacy and public education.  Consequently, this is a big step in that direction.  Here's an excerpt from the New York Times piece by Mary Williams Walsh:

The publication of sealed information led Judge Weinstein to issue a sharply worded ruling last year, stating that Mr. Berenson had engaged in a conspiracy with a doctor and a lawyer and that they had used others “as their agents in crime.”

The judge said the sealed documents belonged to Lilly and ordered the doctor, David S. Egilman, and the lawyer, James B. Gottstein, to return them. Dr. Egilman had been serving as an expert consultant for the plaintiffs at the time, and Mr. Gottstein was working on Zyprexa litigation in Alaska.

Since then, insurance companies, unions, medical researchers and other publications have filed formal requests for copies of the documents. Many of the papers were entered into open court proceedings in Alaska, and copies of some have been posted on the Internet.

In his ruling on Friday, Judge Weinstein repeated that the information had been “obtained illegally” by The Times but also cited “this country’s general policy of accessibility of court records.”

The 295 page opinion is available here and the case is In re Zyprexa Products Liability Litigation, 04-MD-1596.

ECB

September 8, 2008 in Zyprexa | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 26, 2008

Lilly Settles with the State of Alaska over Zyprexa Claims

Rather than proceed with trial, Eli Lilly has entered into a $15 million settlement with the State of Alaska in the State’s Medicaid lawsuit over Zyprexa. The State’s suit involved claims that it had to pay for treatment of Zyprexa-related health problems such as diabetes and weight gain. The Wall Street Journal reports some remarks by the Alaska judge:

Anchorage Superior Court Judge Mark Rindner said on the bench, without jurors present, that without lawsuits like the one the state of Alaska brought, claims that drugs cause health problems "might well go unaddressed."

Judge Rindner was reacting to an assertion by Lilly lawyer George Lehner that drug regulation is up to the federal Food and Drug Administration, not any state. He argued that Alaska's Unfair Trade Practices and Consumer Protection Act shouldn't apply to drugs.

But Judge Rindner said evidence presented by the state had established that the FDA "isn't capable of policing this matter."

The Wall Street Journal’s Health Blog adds:

The settlement means the end of an Anchorage jury trial that people were watching as a bellwether, to get a read on how Lilly might fare in negotiations with other states and with the feds, which have leveled similar allegations.

The outcome looks pretty good for the company. Before the jury trial started, the WSJ reported that Lilly floated a settlement offer of about $2 million, while Alaska was looking for something closer to $200 million.

ECB

March 26, 2008 in Zyprexa | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 12, 2008

Zyprexa Hearings Broadcasted

A short order by Judge Weinstein in the Zyprexa MDL on March 11, 2008, permitted cameras and recording equipment during the upcoming March 20 hearing. Here’s a brief excerpt of Judge Weinstein’s order:

Video broadcasts assist in opening the courts to the public. Since tens of thousands of individuals, organizations and governmental entities all over the United States are parties to, or affected by, the instant litigation, approval of the application is in the public interest. No reason has been suggested to depart from the policy that, in general, the public should be permitted and encouraged to observe the operation of its courts in the most convenient manner possible, so long as there is no interference with the due process, the dignity of litigants, jurors and witnesses, or with other appropriate aspects of the administration of justice.

3/11/2008 N.Y.L.J. 32, (col. 3) (MDL Case No. 04-MD-1596).
As I’ve noted in previous articles (see here and here), transparency in matters affecting the public (such as large scale pharmaceutical cases) is vital for deterrence, public education, marketplace and social accountability, and judicial legitimacy. This transparency traditionally comes through published written opinions, but it’s certainly interesting to observe the rise of these new developments. It’s not clear from the text of the order which hearing will be broadcasted. There are a few significant hearings scheduled in March. Notably, there’s a hearing on motions to dismiss and motions for summary judgment in the securities lawsuits, shareholder derivative lawsuit, and a class certification motion on the third-party payors lawsuit scheduled for March 27 and March 28 (info available at 2008 WL 619172 (E.D.N.Y.)).

ECB

March 12, 2008 in Zyprexa | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 5, 2008

FDA Says Long-Acting Form of Zyprexa Effective, But Sedating

Article in the Wall Street Journal -- Lilly Gets Support for Version Of Schizophrenia Treatment, by Jennifer Corbett Dooren.  Here's an excerpt:

A Food and Drug Administration official said that a long-acting, injectable form of Eli Lilly & Co.'s top-selling drug Zyprexa was effective at treating schizophrenia, but caused "profound sedation" in certain patients.

A memo written by Thomas P. Laughren, the FDA's psychiatry products division director, and posted on the agency's Web site, said clinical studies of the drug showed 24 out of 1,915 patients exposed to the long-acting form of Zyprexa suffered from profound sedation after receiving the injection. The FDA said the sedation typically lasted about one to three hours.

The long-acting form of Zyprexa faces a review by an FDA panel of outside medical experts tomorrow. The panel will be asked if that form of Zyprexa has been shown to be "acceptably safe" and effective for the treatment of schizophrenia. The panel's decision will amount to a recommendation about whether the FDA should approve the product. The FDA usually follows its panel's advice but isn't required to.

BGS

February 5, 2008 in FDA, Zyprexa | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 30, 2008

Reports of Lilly Reaching Settlement with Federal Prosecutors

With all of the attention Merck’s been receiving lately, it’s nice (in an abstract sense) to see some headlines about Zyprexa. The New York Times reported today that Eli Lilly is discussing the possibility of settling civil and criminal investigations by federal prosecutors, with Lilly paying more than $1 billion to federal and state governments. Here’s a bit of the New York Times piece, Lilly in Settlement Talks with U.S.:

Zyprexa has serious side effects and is approved only to treat people with schizophrenia and severe bipolar disorder. But documents from Lilly show that between 2000 and 2003, Lilly encouraged doctors to prescribe Zyprexa to people with age-related dementia, as well as people with mild bipolar disorder who had previously been diagnosed only as depressed.

Although doctors can prescribe drugs for any use once they are on the market, it is illegal for drug makers to promote their medicines any uses not formally approved by the Food and Drug Administration.

Lilly may also plead guilty to a misdemeanor criminal charge as part of the agreement, the people involved with the investigation said. But the company would be allowed to keep selling Zyprexa to Medicare and Medicaid, the government programs that are the biggest customers for the drug. Zyprexa is Lilly’s most profitable product and among the world’s best-selling medicines, with 2007 sales of $4.8 billion, about half in the United States.

Lilly would neither confirm nor deny the settlement talks.

"We have been and are continuing to cooperate in state and federal investigations related to Zyprexa, including providing a broad range of documents and information," Lilly said in a statement Wednesday afternoon. "As part of that cooperation we regularly have discussions with the government. However, we have no intention of sharing those discussions with the news media and it would be speculative and irresponsible for anyone to do so."

Lilly also said that it had always followed state and federal laws when promoting Zyprexa.

The Lilly fine would be distributed among federal and state governments, which spend about $1.5 billion on Zyprexa each year through Medicare and Medicaid.

The fine would be in addition to $1.2 billion that Lilly has already paid to settle 30,000 lawsuits from people who claim that Zyprexa caused them to suffer diabetes or other diseases. Zyprexa can cause severe weight gain in many patients and has been linked to diabetes by the American Diabetes Association.

Stay tuned.

ECB

January 30, 2008 in Zyprexa | Permalink | Comments (2) | TrackBack (1)

Sunday, October 7, 2007

Blog Roundup

Wednesday, April 25, 2007

Blog Roundup

Drug and Device Law Blog has an interesting post on causation in failure-to-warn cases, and another post elaborating after reader comment.

TortsProf Blog flags another story on Zyprexa from Alex Berenson of the New York Times.

Products Liability Prof Blog posts a link to a story on a meager punitive verdict in a Ford rollover case, delivered after Ford noted its layoffs and losses.

Civil Procedure Prof Blog has a post on the 2007 U.S. Chamber of Commerce rankings of states for tort law climate.

Point of Law has a post celebrating a California opinion questioning the oursourcing of government lawsuits to plaintiffs lawyers.

BGS

April 25, 2007 in Zyprexa | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 6, 2007

Congressional Panel Examines Off-Label Use of Drugs and Medical Devices

Article in the Wall Street Journal -- Congressional Panel to Study Off-Label Use of Stents, Drugs, by Keith J. Winstein.  Here's an excerpt:

A congressional committee is looking into the "off label" use of drugs and heart stents, examining the widespread practice in which doctors prescribe medical products to patients outside the boundaries approved by the Food and Drug Administration.

Boston Scientific Corp. and Johnson & Johnson's Cordis unit, the only makers of drug-coated stents sold in the U.S., were asked to submit marketing materials and clinical data to the House Committee on Oversight and Government Reform on Wednesday. About 60% of drug-coated stents, which prop open clogged arteries, are used off-label. For example, manufacturers haven't rigorously tested their stents in patients who have had heart attacks, but stents are commonly given to such patients. Doctors are allowed to prescribe stents to off-label patients, but manufacturers can't encourage off-label use.

The committee's chairman, California Democrat Henry Waxman, also asked for marketing materials from three drug companies that have come under scrutiny over whether they promoted their products for unapproved uses: Eli Lilly & Co., whose antipsychotic drug Zyprexa had $4.36 billion in sales last year and was the company's best seller; AstraZeneca PLC, which makes another depression drug, Seroquel; and Cephalon Inc., whose marketing of painkillers has been under investigation by the Connecticut attorney general.

BGS

March 6, 2007 in FDA, Medical Devices - Misc., Pharmaceuticals - Misc., Zyprexa | Permalink | Comments (0) | TrackBack (0)