GLOBAL PHARMA PRIMER

LEGAL BATTLES IN PHARMACEUTICAL INDUSTRY

…RESOURCE GUIDE

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Landmark Cases Marketing & Advertising Federal Settlements FCPA: GSK Chinese bribery scandal, 2013 Meningitis Outbreak, 2012 Personal Injury – Notable Settlements

Plaintiffs: Subjects in a trial of a new vaccine against melanoma. They alleged that the investigators failed to provide full informed consent, committed research malpractice (non-compliance with protocol) and research fraud by deliberately misrepresenting the risks and benefits of the study.

ROBERTSON v. McGEE, 2002

Defendants: Investigators, study sponsor, individual members of the Institutional Review Board and the institutional bioethicist.

Several of the defendants have settled out of court. The plaintiffs have failed to establish subject matter jurisdiction in federal court and the case was dismissed.

• The lawsuit claims the defendants' actions violated human-rights provisions of two international treaties, the Nuremberg Code and the Declaration of Helsinki. The complaint also alleges federal civil rights violations and violations of federal regulations governing clinical trials.

Case: Robertson v McGee

• In addition to these federal claims, the complaint alleges state causes of action for negligence, intentional and negligent infliction of emotional distress, fraud and misrepresentation, assault and battery, lack of informed consent, and strict products liability.

THE CASE INTRODUCED INTRIGUING QUESTION OF IRB LIABILITY University of Pittsburgh Law Review: Suitability of IRB liability

Dura Pharmaceuticals, Inc. v. Broudo

544 U.S. 336 (2005)

was a securities fraud case decided by the Supreme Court of

the United States on April 26, 2005.

The Court held that an inflated purchase price will not by itself constitute or proximately cause

the relevant economic loss needed to allege and prove "loss

causation."

DURA PHARMACEUTICALS v. BROUDO, 2005

SORRELL v. IMS HEALTH, Inc., 2011

Holding: Vermont's Prescription Confidentiality Law, which absent the prescriber's consent prohibits the sale of prescriber-identifying information, as well as the disclosure or use of that information for marketing purposes, is subject to heightened judicial scrutiny because it imposes content- and speaker-based burdens on protected expression. Vermont's justifications for the prohibition cannot withstand such heightened scrutiny. SCOTUS Blog

• U.S. District Court in the District of Vermont upheld Act 80.

• The U.S. Court of Appeals for the Second Circuit struck the law down.

• Judge Debra Ann Livingston insisted that medical privacy was a substantial state interest in this case and argued that the law was constitutional under First Amendment case law.

• The Supreme Court agreed to review the Second Circuit's opinion in January 2011.

• On June 23, 2011 the Court issued a 6-3 opinion striking down Vermont's law, suggesting that a more privacy-protective statute might have withstood Constitutional scrutiny.

HALLIBURTON v. ERICA P. JOHN FUND, 2013

Holding: Investors can recover damages in a private securities fraud action only if they prove that they relied on the defendant's misrepresentation in deciding to buy or sell a company's stock. In Basic Inc. v. Levinson, the Supreme Court held that investors could satisfy this reliance requirement by invoking a presumption that the price of stock traded in an efficient market reflects all public, material information-including material misstatements. Halliburton has failed to provide the “special justification” necessary to overrule that presumption. However, even if plaintiffs do not need to directly prove that the misrepresentation affected the stock price to invoke the Basic presumption, defendants can defeat the presumption at the class certification stage through evidence that the misrepresentation did not in fact affect the stock price.

Docket No. Op. Below Argument Opinion Vote Author Term

13-317 5th Cir. Mar 5, 2014 Jun 23, 2014 9-0 Roberts OT 2013

SCOTUS Blog

WYETH v. LEVINE, 2008

• In 2000, Diana Levine was treated with Phenergan (Wyeth) to relieve her a migraine. • The drug was incorrectly administered, causing gangrene that led to upper limb amputation • Levine sued Wyeth on claims of negligence and products liability, arguing that Phenergan’s label

was inadequate in warning consumers about its possible risks. • Wyeth argued that federal law preempted Levine’s state law claims, as state law directly

conflicted with the requirements of the FDCA. • Both lower courts ruled in favor of Levine. • Supreme Court, in order to further define the federal preemption doctrine, clarified whether a

drug manufacturer can be liable under state law after complying with the labeling requirements of the FDA.

• Stakeholders on both sides argue that the outcome of this case will have a direct impact on the kind of information included on drug labels.

PLIVA v. MENSING, 2011 Holding: Federal drug regulations applicable to generic drug manufacturers directly conflict with, and thus preempt, state-law tort claims alleging a failure to provide adequate warning labels.

• Gladys Mensing and Julie Demahy were prescribed Reglan but received its generic equivalent.

• After long-term use Mensing and Demahy developed severe neurologic disorders.

• The women separately sued Pliva and Actavis, making state law failure-to-warn claims.

• Pliva and Actavis argue that the federal Food, Drug, and Cosmetic Act, along with Food and Drug

• Administration regulations preempt Mensing and Demahy’s state law claims because it was impossible for Pliva and Actavis to comply with both federal and state law.

• The companies argue that they could not provide additional warnings beyond what the brand manufacturer provided on its label because they are required to follow the originator’s label.

MUTUAL v. BARTLETT, 2013

Holding: State-law design-defect claims that turn on the adequacy of a drug’s warnings are pre-empted by federal law under PLIVA v. Mensing. Judgment: Reversed, 5-4, in an opinion by Justice Alito on June 24, 2013. Justice Breyer filed a dissenting opinion in which Justice Kagan joined. Justice Sotomayor filed a dissenting opinion in which Justice Ginsburg joined.

Four Justices dissented. Justice Breyer and Justice Kagan suggested an alternative, that is for a company to shoulder the burden of "paying a sizable damages" award as a remedy in instances where a rare side effect causes harm to a patient. This opinion is informed, in part, by an amicus brief submitted by two former FDA Commissioners, who inform the Court that "the FDA has long believed that state tort litigation can 'supplement the agency's regulatory and enforcement activities.'“ Patent Docs

Karen Bartlett suffered SJS/TEN after taking generic version of NSAID Clinoril (sulindac).

U.S. v. CARONIA, 2013

American Law Journal comments on pharmaceutical off-label marketing and the impact of U.S. v Caronia. Alfred Caronia, sales representative for Orphan Medical, was convicted of off-label promotion. Court of Appeals overturned the decision, citing his free speech rights.

U.S. ex rel. GE v. TAKEDA, 2014

Dr. Helen Ge, (Relator), who worked as a contract physician for Takeda Pharmaceutical Co, brought action on behalf of the U.S. government for treble damages and civil penalties arising from Defendants Takeda Pharmaceutical Company Limited’s and Takeda Pharmaceuticals North America, Inc’s conduct in violation of the Federal Civil False Claims Act. She claimed that Takeda failed to report adverse events for the drugs Actos, Uloric, Kapidex/Dexilant, and Prevacid to the FDA as required by law. Despite Dr. Ge's serious allegations, neither the federal government nor any of the two dozen states affected would join her lawsuit. In November 2012, Dr. Ge's lawsuit was dismissed by Judge F. Dennis Saylor IV of the U.S. District Court for the Court of Massachusetts. Attorneys for Takeda moved for dismissal stating that Dr. Ge was apparently not clear about what Takeda had done wrong and that Dr. Ge's allegations were specific enough. In his decision, Judge Saylor stated that Dr. Ge should have gone directly to the FDA with her concerns. The petition was denied by the Supreme Court in October 2014.

GVK BIOSCIENCES SCANDAL, 2015

A committee of the European Medicines Agency (EMA) has recommended suspending the sale of roughly four dozen generics for conditions such as diabetes, depression, and hypertension because their approvals were based on flawed clinical studies conducted by Indian CRO GVK Biosciences. Medscape

Source: EMA

The EMA investigation of drugs studied at GVK Biosciences encompassed more than 1000 individual generics in various forms and strengths as individually approved in 29 EU nations. Of this group, 300 generics had enough supporting clinical data from other sources to warrant staying on the market.

GENERICS Bioequivalence studies

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Landmark Cases

Marketing & Advertising Federal Settlements FCPA: GSK Chinese bribery scandal, 2013 Meningitis Outbreak, 2012 Personal Injury – Notable Settlements

MARKETING & ADVERTISING

Sunovion Pharmaceuticals APTIOM (eslicarbazepine acetate) Sciecure Pharma DORAL (quazepam) Pacira Pharmaceuticals EXPAREL (bupivacaine liposome inj.) Cipher Pharmaceuticals LIPOFEN (fenofibrate) Optum Insight Life Sciences (Concordia Pharmaceuticals) KAPVAY (clonidine hydrochloride) Gilead Sciences VIREAD (tenofovir disoproxil fumarate) Citius Pharmaceuticals SUPRENZA (phentermine hydrochloride) Alvogen DISULFIRAM Institut Biochimique TIROSINT (levothyroxine sodium) Mission Pharmaceutical Company TINDAMAX (tinidazole)

• Notable impact of U.S. v. Caronia on FDA enforcement of the FDCA rules on marketing and advertising

• Focus on written materials rather than off-label speech • Focus on social media and internet communications

FDA UNTITLED & WARNING LETTERS

FDA LETTERS 2014

The print advertisement is misleading because it overstates the efficacy of Aptiom. In the context of this branded print advertisement for Aptiom, this claim and presentations misleadingly overstate the efficacy of Aptiom by suggesting that the drug has been shown to have treatment benefits on patients’ feelings of confinement associated with seizures.

Untitled Letter, Promotional Material

FDA LETTERS 2014

The sales aid is misleading because it omits important risk information associated with Doral, contains unsubstantiated superiority claims, and omits material facts.

Untitled Letter, Promotional Material

FDA LETTERS 2014

The claims suggest that Exparel is safe and effective for use in cholecystectomy and colectomy. However, the dosage and administration section of the PI provides recommended dosing for bunionectomy and hemorrhoidectomy only.

Warning Letter, Promotional Material

FDA LETTERS 2014

Promotional materials are misleading if they represent or suggest that a drug is safer or more effective than another drug, when this has not been demonstrated by substantial evidence or substantial clinical experience. The totality of these claims and presentations misleadingly implies that Lipofen offers a clinical advantage over other available fenofibrate products, as a result of its formulation and delivery system, when this has not been demonstrated by substantial evidence.

Untitled Letter , Promotional Material

FDA LETTERS 2014

The script is false or misleading because it omits important risk information associated with the use of Kapvay and omits material facts.

Untitled Letter, Promotional Material

FDA LETTERS 2014

The sponsored link provides evidence that Viread is intended for a new use for which it lacks approval, and for which its labeling does not provide adequate directions for use, which renders Viread misbranded within the meaning of FD&C. The sponsored link for Viread fails to present the required established name. Untitled Letter, Promotional Material

FDA LETTERS 2014

This webpage is false or misleading because it omits risk information, includes unsubstantiated efficacy claims for Suprenza, and omits material facts.

Untitled Letter, Promotional Material.

Schedule IV Controlled substance

FDA LETTERS 2014 The sales aid is misleading because it fails to communicate material information from Disulfiram’s full FDA-approved indication for the management alcoholism. According to the Indications and Usage section of the PI, “Disulfiram is not a cure for alcoholism. When used alone, without proper motivation and supportive therapy, it is unlikely that it will have any substantive effect on the drinking pattern of the chronic alcoholic.”

Untitled Letter, Promotional Material

FDA LETTERS 2014

The Facebook webpage is misleading because it makes representations about the efficacy of Tirosint, but fails to communicate any of the risks associated with its use. By omitting the most serious and frequently occurring risks associated with Tirosint, the Facebook webpage misleadingly suggests that Tirosint is safer than has been demonstrated.

Untitled Letter, Promotional Material

FDA LETTERS 2014

Promotional materials are misleading if they fail to reveal facts that are material in light of representations made by the materials or with respect to consequences that may result from the use of the drug as recommended or suggested by the materials. By omitting serious and common risks associated with the drug, the sales sheet misleadingly suggests that Tindamax is safer than has been demonstrated. The sales sheet discusses the use of Tindamax for the treatment of bacterial vaginitis, but fails to present the drug’s full approved indication.

Untitled Letter, Promotional Material

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Landmark Cases Marketing & Advertising

Federal Settlements FCPA: GSK Chinese bribery scandal, 2013 Meningitis Outbreak, 2012 Personal Injury – Notable Settlements

INSIDE THE PHARMACEUTICAL INDUSTRY - Deceptive Marketing Schemes INSIDER EXCLUSIVE | Published on May 23, 2012

FEDERAL SETTLEMENTS

2009 2010 2011 2012 2013 2014 2015

$193 M $762 M $95 M $1.5 B $520 M $1.42 B

$2.2 B $109 M $3 B $950 M $2.3 B $39 M

Whistleblower triggered investigation Felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra: Criminal resolution: $1.3 Billion

Violations of the False Claims Act for illegal promotion of Bextra, Geodon, Zyvox, and Lyrica, and kickbacks to healthcare providers: Civil settlement: Federal: $669 million State: $331 million.

Whistleblower triggered investigation Violations of the False Claims Act: Off-label marketing - CME programs - Ghostwritten articles - Promotional speakers - targeted doctors who

do not typically treat schizophrenia or bipolar disorder

Kickbacks to physicians

Civil settlement: Federal: $669 million State: $331 million. CIA: Exclusion from Federal health care programs.

AstraZeneca Pharmaceuticals sued the South Carolina Attorney General Alan Wilson alleging the state violated the company's due process rights under the state and U.S. constitutions by hiring financially interested attorneys to oversee the case and that his suit over the Seroquel is an orchestrated plan to collect unconstitutional contingency fees for his office and three private law firms. Law360

Amendment V No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Amendment XIV - Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Misbranding of Vioxx® by promoting the drug for treating rheumatoid arthritis, before that use was approved by the FDA.

Misdemeanor for off-label marketing of Vioxx

Criminal fine: $322 million

False Claims Act: False statements about the drug’s cardiovascular safety

Civil settlement: $628 million

Federal: $426 million

States: $202 million

Over 58,000 claims registered.

Abbott Laboratories Inc. has pleaded guilty and agreed to pay $1.5 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of Depakote for unapproved uses. The resolution includes a criminal fine and forfeiture totaling $700 million and civil settlements with the federal government and the states totaling $800 million.

Criminal plea: introducing misbranded drugs, Paxil and

Wellbutrin, into interstate commerce and failing to report

safety data about the drug Avandia to the FDA.

Sanofi-Aventis U.S. Inc. and Sanofi-Aventis U.S. LLC, subsidiaries of French drug manufacturer Sanofi have agreed to pay $109 million to resolve allegations that Sanofi US violated the False Claims Act by giving physicians free units of Hyalgan, a knee injection, in violation of the Anti-Kickback Statute, to induce

them to purchase and prescribe the product.

Boehringer Ingelheim Pharmaceuticals Inc. (US) has agreed to pay $95 million to resolve allegations relating to the improper promotion of the stroke-prevention drug Aggrenox, the chronic obstructive pulmonary disease (COPD) drugs Atrovent and Combivent, and the hypertension drug Micardis.

Criminal and Civil liability Risperdal, Invega & Natrecor Criminal settlement: Janssen Pharmaceuticals, a J&J subsidiary, introduced Risperdal into interstate commerce for an unapproved use, rendering the product misbranded. • Off-label promotion • Kickbacks to physicians and

pharmacists & Omnicare • Targeting vulnerable groups Civil settlement: • Targeting Vulnerable

Patients with Risperdal and Invega for Off-Label Uses.

• Withholding study data • Off-label promotion of

Natrecor by J&J subsidiary Scios.

ALEX GORSKY CEO of Johnson & Johnson

assumed office 2012

U.S. Attorney General Eric Holder Johnson & Johnson Press Conference

November 4, 2013

J&J (SCIOS Inc.) - NATRECOR OUTPATIENT CLINICS SCHEME

In August 2001, the FDA approved Natrecor to treat patients with acutely decompensated congestive heart failure who have shortness of breath at rest or with minimal activity.

Shortly after Natrecor was approved, Scios launched an aggressive campaign to market the drug for scheduled, serial outpatient infusions for patients with less severe heart failure. These infusions generally involved visits to an outpatient clinic or doctor’s office for four- to six-hour infusions one or two times per week for several weeks or months.

In October 2011, Scios pleaded guilty to a criminal FDCA violation. Civil settlement resolved false and fraudulent claims submitted to federal health care programs.

Endo managed to escape a corporate criminal charge by entering into a deferred prosecution agreement (DPA) with the government.

Endo agreed to pay a criminal fine and to impose enhanced compliance measures.

The government used asset forfeiture techniques to buttress the criminal penalty.

The parties agreed to settle an in rem action the government had brought against a $10 million wire transfer intended for Endo Pharmaceuticals.

Source: FDA Law Blog

GLOBAL PHARMA PRIMER

Landmark Cases Marketing & Advertising Federal Settlements

FCPA: GSK Chinese bribery scandal, 2013 Meningitis Outbreak, 2012 Personal Injury – Notable Settlements

FCPA: GSK SCANDAL, 2013

GLOBAL PHARMA PRIMER

Landmark Cases Marketing & Advertising Federal Settlements FCPA: GSK Chinese bribery scandal, 2013

Meningitis Outbreak, 2012 Personal Injury – Notable Settlements

Persons with Fungal Infections Linked to Steroid Injections, by State. CDC

In all, 14 people were charged in connection with the 2012 fungal meningitis outbreak linked to the shuttered New England Compounding Center (NECC). Contaminated drugs — produced with expired ingredients under unsterile conditions — have been tied to the deaths of 64 people and to illnesses in about 700 patients in 20 states. The company’s co-owner and head pharmacist, Barry Cadden, and its supervisory pharmacist, Glenn Chin, were charged with 25 acts of second-degree murder in seven states, plus additional crimes.

NECC MENINGITIS OUTBREAK

MENINGITIS OUTBREAK, 2012

GLOBAL PHARMA PRIMER

Landmark Cases Marketing & Advertising Federal Settlements FCPA: GSK Chinese bribery scandal, 2013 Meningitis Outbreak, 2012

Personal Injury – Notable Settlements

CLASS ACTION LAWSUITS TOP 10 CLASS ACTION SUITS EVER Breast Implant Litigation Status: Settled 1994 Amount: $3.4 billion

After years of litigation claiming women suffered autoimmune disease from their silicone breast implants, the major breast implant manufacturers (Corning, Baxter, Bristol-Meyers Squibb/MEC, 3M) settled class action litigation for $3.4 billion. At the time, it was the largest class action lawsuit in history.

JANSSEN (J&J): RISPERIDAL

Total cases: 24,462 Total closed: 420

ETHICON (J&J): VAGINAL MESHES

Linda Gross v. Ethicon In February 2013, a New Jersey jury required Johnson & Johnson to pay $11.11 million after Linda Gross suffered from its Ethicon mesh products. J&J is facing nearly 4,000 federal mesh lawsuits and countless suits in state courts.

M-O-M HIP IMPLANTS RECALL Metal-on-metal hip implants: DePuy ASR (recalled)

DePuy Pinnacle

Encore Metal-on-Metal Hip Implant

Stryker ABG II (recalled)

Stryker Rejuvenate (recalled)

Stryker Accolade

Biomet M2a Magnum

Biomet M2a-38

Smith & Nephew Birmingham

Smith & Nephew R3 Acetabular System

Wright Conserve

Wright Dynasty

Wright ProFemur

Zimmer Durom Cup

… and more.

BLOOD THINNERS

Bayer and Johnson & Johnson face lawsuits related to safety concerns for blood thinner Xarelto (rivaroxaban). Patients blame Xarelto for excessive bleeding they experienced.

In May 2014, Boehringer Ingelheim paid $650 million to settle thousands of internal bleeding cases involving Pradaxa, a blood thinner. The drug was approved in 2010.

Product Years Manufactured

Quigley Insulag Refractory Cement 1935-1974

Quigley Insulag Fireproofing Cement 1963-1977

Insulbox Precast Insulag 1935 – ?

Insuline Refractory Cement 1940-1970

Panelag Refractory Cement 1945-1974

Panelbond Refractory Cement 1959-1974

Waterproof Cement 1959-1974

Quigley Panelbond

ASBESTOS LAWSUITS

January 2012: Study published in the Archives of Internal Medicine that found women between the ages of 50 and 79 who took statin drugs like Lipitor, Crestor and Zocor were 48 percent more likely to develop type-2 diabetes than women who did not take these drugs. A month later, the FDA made Pfizer update the label with new warning. Class action suits spiked soon after. Lipitor is the best-selling prescription drug ever, selling more than $130 billion since 1996. More than 29 million people in the U.S. have been prescribed the pill. “Small risk of diabetes” equals 100,000 new onset patients.

LIPITOR, CRESTOR, ZOCOR

NIGERIAN TROVAN TRIALS

Stephens, Joe. “Pfizer to Pay $75 Million to Settle Nigerian Trovan Drug-Testing Suit.” Washington Post, July 31, 2009.

Armstrong, Walter. “Did Pfizer Bribe Its Way Out of Criminal Charges in Nigeria?” The Atlantic. Accessed April 21, 2015.

Boseley, Sarah. “WikiLeaks Cables: Pfizer ‘Used Dirty Tricks to Avoid Clinical Trial Payout.’” The Guardian, December 9, 2010.

Democracy Now! “WikiLeaks Cables: Pfizer Targeted Nigerian Attorney General to Undermine Suit over Fatal Drug Tests,” December 17, 2010.

Doctors Without Borders. “Statement: Pfizer Falsely Claims MSF Involvement in the Company’s Unethical 1996 Drug Trials in Nigeria.” Doctors Without Borders, January 4, 2011.

Euronews. Drugs Giant Pfizer Drops AstraZeneca Bid - Economy, 2014.

Smith, David. “Pfizer Pays out to Nigerian Families of Meningitis Drug Trial Victims.” The Guardian, December 8, 2011.

United States Court of Appeals for the Second Circuit. Rabi Abdullahi v. Pfizer, Inc., (United States Court of Appeals for the Second Circuit 2009).

US Embassy Cables. “US Embassy Cables: Pfizer Nears $75m Nigeria Settlement.” The Guardian, December 9, 2010.

THE EUROPEAN PIP CRISIS

Jean-Claude Mas, founder of Poly Implant Prothèse (PIP), was found guilty of fraud after deliberately using sub-standard silicone in thousands of implants sold around the world. Mas was jailed for four

years and fined 75,000 euros. The sentence launched a series of civil lawsuits.

Euronews. “Founder of Faulty Breast Implant Company PIP Jailed for Four Years.” Euronews, October 12, 2013. https://www.youtube.com/watch?v=oMghTqj1e6U. NMANewsDirect. “Poly Implant Prothèse Executives on Trial over Substandard Breast Implants.” NMANewsDirect, May 16, 2013. https://www.youtube.com/watch?v=JjbEcWvOL4o.

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END OF MODULE 4 THANK YOU FOR PARTICIPATING