Lance Armstrong is riding a new tour these days, but instead of fresh air and the beautiful landscapes of France, this tour will be inside offices (lawyers’ offices) and courtrooms. Yes, it is the Tour de Courts.  Since his confession to doping in an interview with Oprah Winfrey, his legal problems have compiled dramatically. 

A recent article published on socialmediatoday.com suggests that unlike other professional industries, health care providers have been slow to engage on social media.  The article posits that the key reasons for their reluctance stem from concerns about accountability and privacy.  At its root, the issue seems to be that between the protections afforded under the Health Insurance Portability and Accountability Act (HIPAA) and more generalized notions of physician-patient confidentiality, many providers are concerned that a presence in social media threatens patient confidentiality and exposes them to expanded liability.  The article makes the point that a lack of social media presence is itself risky for health care providers, and argues that the risk of not establishing a presence subjects providers to potentially negative commentary and characterization.

The risks to physicians, hospitals and similar providers posed by interaction on social media are analogous to a large extent to those faced by lawyers, a group which in my experience has fairly enthusiastically embraced social media, and opportunities for professional on-line communication and networking.  Like physicians, lawyers are bound by client confidentiality.  We are also bound by rules of professional conduct that regulate what we are permitted to communicate about our services and our experience.  This does (or should) cause us to be cautious and deliberative when engaging social media, particularly when we do so under color of our profession and/or our firm.  Notwithstanding these restrictions, lawyers have been active in social media for many years.

On the other hand, health care providers have to be concerned about additional scrutiny that we lawyers do not.  This includes state and federal oversight associated with Medicare and Medicaid, as well as board licensure review.  Health care providers also face heightened attention and expectations of accountability when there is a bad patient outcome.  Providers may be understandably leery of engaging in yet another form of exposure and communication in which there is certainly opportunity for “bad press.”  However, as the socialmediatoday.com article suggests, media silence can be detrimental both from a financial point of view and in the arena of public opinion.  Even social media silence.

The new IOM report, Breast Cancer and the Environment: A Life Course Approach, again emphasizes the difference between how scientific panels go about making a causal inference and the approach too often approved of by credulous judges often insecure about their own ability to think critically and mesmerized by the jargon-laden pronouncements of credentialed experts. Beginning on page 82 under "Hierarchy of Studies" and followed by "Categories of Evidence" the report does a great job of detailing what counts as evidence and the methods and criteria used by organizations like the International Agency for Research on Cancer, the National Toxicology Program, the World Cancer Research Fund / American Institute for Cancer Research in going about collecting, assessing and weighing evidence when making causal judgments. They even put together a helpful summary of the classification systems (see Appendix C, "Classifications Systems Used in Evidence Reviews" at page 312).

Here are a couple of takeaways:

(1) "The criteria aim to be explicit about the weight, or relative importance, given to studies in humans and in animals or other experimental systems"; and

(2) "Strong and consistent positive epidemiologic evidence in rigorously conducted studies is prima facie evidence that the substance is a risk factor." You will quickly note upon reviewing the summary of systems of causal inference that none support anything like the notion embraced by the court in Milward v. Acuity that an expert weighing a subset of the data (each piece of which is either weak, irrelevant or inconsistent) upon the scales of his personal scientific judgment can by "reasoning to the best explanation" reliably reach a causal inference  - especially in the complete absence of any epidemiological evidence to support it. Indeed the "atomization" of evidence decried by the Milward court and those in the "public health movement" who promote mass tort litigation is exactly what IARC, IOM, NTP, EPA and WCRF/AICR do - they assess each piece of evidence, they do it transparently, they do it according to rules laid down before they even go looking for the evidence and then they weigh what's left; again, according to weighting systems that are explicit, consistent and established before the first piece of evidence is examined.

The idea that knowledge comes from scientists taking a "holistic approach to the data" and applying their personal judgment to it is, to be blunt, hooey. That may be a way to arrive at a testable conjecture but without the conjecture passing a test of its predictive power (e.g. a rigorous epidemiological study) it remains nothing but a bald, personal opinion with no foundation beyond the ipse dixit of the expert who induced it.

 David Oliver is managing partner of the Houston office of Vorys, Sater, Seymour and Pease. His practice focuses on civil litigation involving allegations of injuries due to exposure to chemicals or pharmaceuticals; he holds degrees in both chemistry and biology. Read more of David’s work on his blog: Mass Torts: State of the Art. You may contact David through the firm’s website at www.vorys.com.

The Centers for Medicare and Medicaid Services (“CMS”) posted an alert (the “Alert”) that confirms that there has been an extension, in certain cases, of the reporting trigger date for Mandatory Insurer Reporting (“MIR”) under Section 111 of the MMSEA.  The Alert provides the new trigger dates based on gross settlement/judgment/other payment (“TPOC”)  values for claims as follows:

The recent opinion by the Vermont Supreme Court in a benzene/leukemia case (Blanchard v. Goodyear Tire & Rubber Co.) is well worth the time required to read and digest it. Building on its decision in Estate of George v. Vermont League of Cities and Towns, the court embraced critical thinking and a Bayesian approach to causal reasoning and so held that empty evidence can't change prior, or baseline, beliefs and that  plaintiff's argumentum ad ignorantiam won't fly in Vermont. 

Here's how it went.

Plaintiff's claim can be distilled to the following:1) plaintiff has lymphoma of the central nervous system (CNS lymphoma); 2) CNS lymphoma is a subtype of non-Hodgkin's lymphoma (NHL); 3) benzene has been shown in some studies to double the risk of NHL; 4) plaintiff was exposed to benzene; 5) an alternate cause of CNS lymphoma was ruled out by his expert; so, 6) plaintiff's CNS lymphoma was caused by his benzene exposure. Q.E.D. 

The Vermont Supreme Court was not convinced.

The vast majority of cases of CNS lymphoma "are of unknown etiology." Accordingly, our initial belief must be that plaintiff's CNS lymphoma is similarly likely to be of unknown etiology. So what evidence does plaintiff have that might reasonably move a sensible jury away from the belief that any given case of CNS lymphoma is due to some unknown cause and towards benzene? Plaintiff could have shown that he was exposed to a level of benzene that so increased his risk of CNS lymphoma that we ought to consider it as a likely cause. But this plaintiff couldn't show even by a rough approximation what his exposure might have been, much less that the dose experienced appreciably increased his risk of developing the disease. Then again, he could have shown that the manner or circumstances in which he was exposed, whatever the dose, has been found to the likely cause of CNS lymphoma in some similarly exposed group of individuals. But he had no evidence of that either. There was then nothing to cause a sensible person to move off the baseline belief - that plaintiff's was an ordinary disease of life.

Plaintiff next tried to argue differential diagnosis. However, the court clearly understood that an unweighed risk factor, abstract and disconnected from the circumstances (i.e. dose/exposure) in which it was detected is not the same thing as a potential cause to be weighed in a differential diagnosis or process of elimination exercise. Thus it held that any attempt to establish benzene as the cause of plaintiff's CNS lymphoma by ruling out everything else "must fail" because plaintiff couldn't demonstrate that his benzene exposure belonged among the potential causes to be considered in the first place.

The court then demonstrated that critical thinking isn't just for good scientists. Plaintiff had found an expert who could rule out one cause of CNS lymphoma and so he constructed the following argument: 1) plaintiff has CNS lymphoma; 2) some cases of CNS lymphoma are caused by an immunodeficiency disorder; 3) plaintiff doesn't have an immunodeficiency disorder; therefore, 4) benzene caused plaintiff's CNS lymphoma. The Vermont Supreme Court rejected this argument as well.  The court held that when the cause of most cases of a disease is unknown the ruling out of one cause cannot be evidence in favor of some other cause. 

Finally, and quite interestingly, the court briefly elaborated on its decision in George; the George ruling has received criticism from those hoping to lower the barriers meant to keep out all but sound science. The court holds, it seems, to the same view as organizations like the National Academies of Science and the U.S. Preventive Services Task Force - that experts weighing scientific studies ought to be able to say how they did the weighing and to state "the weight given to each study."  There is, after all, not much left of the scientific method without measurements and methods. 

David Oliver is managing partner of the Houston office of Vorys, Sater, Seymour and Pease. His practice focuses on civil litigation involving allegations of injuries due to exposure to chemicals or pharmaceuticals; he holds degrees in both chemistry and biology. Read more of David’s work on his blog: Mass Torts: State of the Art. You may contact David through the firm’s website at www.vorys.com.

The Wall Street Journal reported last week that a Kentucky judge has recommended that a Cincinnati based plaintiff’s attorney, Stanley Chesley, be disbarred due to conduct pertaining to fee division in a class-action pharmaceutical case. The litigation concerned the diet drug fen-phen, which allegedly caused heart valve damage to many people who took it. After a post-settlement dispute arose over fee division, the presiding judge accused Chesley of "strong-arming" his way into the litigation over the protests of the initial counsel, driving up the fee percentages in order to maximize his personal fee recovery in the case, and defrauding his clients of $7,500,000.  Chesley’s fee was $20,000,000.

This is not the first such fee dispute in the fen-phen litigation. Two other Kentucky lawyers have received prison sentences over misrepresentations about the settlement.  Similar disputes have arisen in many other mass-tort cases throughout the country.  In many, if not most, class action cases, the interests of the plaintiffs are subordinate to the interests of their counsel, who appear to fight not only the defendants, but each other and now, even their clients in order to maximize their personal windfall.  Instances such as this are the inevitable result.

On February 22, the U.S. Supreme Court handed a landmark victory for vaccine makers.  In a 6-2 decision, the Court held that the National Childhood Vaccine Injury Act of 1986 (the “Vaccine Act”) preempts all design-defects claims against vaccine manufacturers for injuries caused by a vaccine’s side effects.

Facts.  Bruesewitz involved a diphtheria-tetanus-pertussis (DTP) vaccine, Tri-Immunol, formerly manufactured by Lederle (later acquired by Wyeth, and subsequently, Pfizer).  Plaintiffs alleged that Tri-Immunol caused their daughter’s seizures and developmental problems.  Plaintiffs’ complaint alleged that the vaccine was defectively designed, and that Wyeth could have used an alternative, safer design.  (The Bruesewitz’s previously prevailed in Vaccine Court and was awarded a payment of roughly $103,000.  They subsequently rejected the payment and decided to pursue their tort claims instead.)

Presumption for Preemption.  Justice Scalia’s opinion for the majority reminds us of a quote from The Princess Bride (1996):  “ ‘Inconceivable.’  You keep using that word.  I do not think it means what  you think it means.”  In this case, at issue was the interpretation of the words “even though” and “unavoidable” in the Vaccine Act (42 U.S.C. §300aa-22(b)(1)), and whether such language allows for the inference of preemption.   Bruesewitz v. Wyeth, 562 U.S. __, slip op. at 7-8 (2011). In a classic textualist interpretation, Justice Scalia concluded that the language of the provision suggests a complete defense for unavoidability with respect to a particular design (e.g., the terms “even though” clarifies the words that precede it and “delineates the preventative measures that a vaccine manufacturer must have taken for a side-effect to be considered ‘unavoidable’ under the statute.”)  Id. at 8.  The Act’s failure to mention defective design was “by deliberate choice, not inadvertence” and gives further credence to the argument that the Legislature intended to preempt design claims.  Id. (internal citations omitted).

Comment k not codified in the Vaccine Act.  The Court also rejected Plaintiffs’ argument that the Vaccine Act codified the strict liability provisions of Restatement § 402A, comment k.  This is significant because under Plaintiffs’ interpretation, vaccine manufacturers would lose significant protection in states that allow comment K (e.g. such states would require a case-by-case adjudication of design defect claims). Under the Court’s analysis, comment k’s “unavoidably unsafe products” does not equal to the statute’s “side effects that were unavoidable.” Id. at 10.  Indeed, just because the Vaccine Act “uses the adjective ‘unavoidable’ and [comment k uses] the adverb ‘unavoidably’ does not establish that Congress had comment k in mind.”  Id.

Philosophical underpinnings. Finally, in a nod to policy arguments, the Court recognized that the presumption for preemption reinforces the legislative intent of the Vaccine Act:  the creation of a generous no-fault compensation program for vaccine injuries in exchange for avoiding costly tort litigation and disproportionate jury verdicts.  Id. at 15.  Justice Scalia notes that the Vaccine Act “reflects a sensible choice to leave complex epidemiological judgments about vaccine design to the FDA and the National Vaccine Program rather than juries.” Id.

Justice Sotomayor’s Dissent.  Not surprisingly, the dissent took the opposite interpretation of the textual arguments.  As the dissent’s argument goes, because the statute clearly refers to manufacturing and labeling defects (in the “even though” clause), then the “if” clause’s reference to side effects must refer to design defects.  Id. (Sotomayor, J., dissenting) (joined by Justice Ginsburg).  Therefore, under the dissent’s reasoning, § 22(b)(1) preempts some—but not all—design defect claims.  Id.  The dissent also argues that the House Energy and Commerce Committee’s Report on the Vaccine Act refers to comment k, and thus validates the argument that comment k is incorporated in the Act.  Id.  (The majority, however, points out that this report was a post-legislative enactment report, and is thus, an improper tool for statutory construction.)

Where do we go from here? 

Certainly, Bruesewitz was by no means a surprising decision.  However, its ramifications will be felt far and wide.  First, it cements the idea that Vaccine Court is the exclusive remedy for those injured by vaccines.  In so doing, Bruesewitz underscores the idea that the Vaccine Act and the Vaccine Court are both fulfilling the philosophies for which they were created by Congress.

Second, Bruesewitz follows after another landmark preemption decision, Wyeth v. Levine, and approximately 15 years after the last vaccine case decision.  At the very least, Bruesewitz is another peg in the evolving preemption jurisprudence.  Certainly, it puts to rest a potential conflict in another well-publicized opinion by the Georgia Supreme Court on thimerosal vaccines and autism, AHP v. Ferrari, 668 S.E.2d 236 (2008), and the Pennsylvania Superior Court’s opinion in Wright v. Aventis Pasteur, Inc., 2011 Pa. Super. 9, slip op. (Pa. Super. Jan. 11, 2011).

Third, Bruesewitz will help resolve the 5,000 petitions in the “Omnibus Autism Proceeding” currently pending in Vaccine Court.  Had Bruesewitz gone the other way, there would have been a potential for a flood of design defect litigation in state courts.

Lastly and crucially, the court’s decision in Bruesewitz today signifies an important public health achievement.  It re-focuses the public’s attention on the importance of vaccines in preventing childhood diseases.  That may be the greatest victory of all.

Two recent FCPA enforcement developments exemplify the government’s view that foreign corruption is a national security risk warranting increased scrutiny.

First, the newly established FCPA unit at the Securities and Exchange Commission is investigating companies in the pharmaceutical and energy industries that do business in nations designated as state sponsors of terrorism. The purpose of the investigation is to determine whether any of the companies’ operations were used to support terrorist activities in Cuba, Iran, Sudan and Syria.

Second, the Criminal Division’s Fraud Section has sent letters in recent weeks to a number of pharmaceutical companies asking about payments made to foreign officials in several nations, beyond those designated as state sponsors of terrorism. This development follows the justice department’s announcement of its own general probe into the pharmaceutical and medical device industry in November 2009.

These two investigations reflect a policy judgment that corruption is a national security issue. The government is now looking at international corporations, including those in the pharmaceutical and medical device industry, as the gatekeepers for business activity that can be used to finance terrorist activities. Moreover, the Department’s anticorruption efforts reflect an acceptance that poor governance, including corruption, has pernicious effects on development and stabilization.

These two developments are the latest manifestation of the trend in intensified FCPA enforcement targeting the pharmaceutical industry. In a speech on November 12, 2009, to the Tenth Annual Pharmaceutical Regulatory and Compliance Congress and Best Practices Forum, Lanny A. Breuer, Assistant Attorney General of DOJ’s Criminal Division, warned that “[o]ur focus and resolve in the FCPA will not abate, and we will be intensely focused on rooting out foreign bribery in your industry. That will mean investigation and, if warranted, prosecution of corporations to be sure, but also investigation and prosecution of senior executives.”

Breuer highlighted some of the key factors that increase FCPA liability risks for the pharmaceutical industry. First, he noted that “close to $100 billion, or roughly one-third, of total sales for [U.S. pharmaceutical companies] were generated outside the United States, where health systems are regulated, operated and financed by government entities to a significantly greater degree than in the United States” – thereby resulting in substantial interaction with foreign government officials to manufacture and market pharmaceutical products. Second, he highlighted the problem presented by interacting with foreign health care systems: “under certain circumstances and in certain countries, nearly every aspect of the approval, manufacture, import, export, pricing, sales and marketing of a drug product in a foreign country will involve a ‘foreign official’ within the meaning of the FCPA.” Third, he cited “fierce industry competition and the closed nature of many public formularies.”

Based on these factors, pharmaceutical companies must establish and implement internal controls that govern “routine” interactions with foreign officials throughout the entire product life cycle. Aggressive FCPA enforcement creates not only back-end, e.g., distribution, but also front-end, e.g., preclinical and R&D, compliance challenges for pharmaceutical management teams that may not be accustomed to focus on anything other the scientific process. The government will closely scrutinize contacts with foreign officials throughout the entire regulatory process, including: research and development, filing patents, manufacturing, registration, price fixing, licensing of professionals and establishments, selection of essential medicines, procurement, distribution, inspection of establishments, prescription, dispensing, pharmacovigilance and marketing and sales.

Some core activities implicating FCPA concerns include:

• Engaging the services of health care professionals
• Post-marketing studies and other clinical studies
• Sponsoring health care professionals to attend meetings and events
• Gifts and entertainment
• Visits to company facilities and other travel
• Sponsorship and grants
• Political contributions
• Facilitating payments
• Actions by and payments to agents, consultants, joint-venture partners, distributors and other third party representatives
• “hospitality” payments

FCPA enforcement is no longer only about “leveling the playing field” of corporate opportunities. Given the government’s treatment of corruption as a national security issue, business leaders must ensure that company proceeds do not finance illicit payments which can be used to sponsor terrorism or otherwise be seen as degrading the national security interests of the United States. With the dramatic increase in FCPA penalties against senior corporate executives, corporate executives must protect themselves and their companies by conducting the appropriate due diligence and implementing the necessary internal controls to identify and remediate the danger of FCPA violations.

The Food, Drug, and Cosmetic Act (“FDCA”) was enacted in 1938 to regulate, among other things, the drug and medical device industry in order to ensure the safe and effective design, manufacture, sale and labeling of such products.  Due in large part to the growing cost of health care, in 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, commonly referred to as the Hatch-Waxman Act, which was instrumental in bringing generic drugs into mainstream production. 

One of the main goals of the Hatch-Waxman Act is to provide individuals with ready access to more affordable generic drugs.  Further, the government’s interest in providing affordable health care to the majority of Americans remains a top priority as evidenced by the Obama Administration’s recent hard push for health care reform.  Generic drugs play a key role in accomplishing these important goals.  Notably, “seven in ten prescriptions filled in this country are now for generic drugs.” Mensing v. Wyeth, 588 F.3d 603, 607 (8th Cir.2009).

So, if the legislative and the executive branches understand the importance of affordable health care, why is the judiciary rendering decisions that appear to ignore these public policy considerations?  In light of the regulatory provisions set forth in the FDCA and the Hatch-Waxman Act, and given today’s paramount concern over the rising cost of health care, coupled with the integral role that generic drug manufacturers play in accomplishing that goal, it seems wholly inconsistent that the judiciary would undermine these ideals by finding claims against generic drug manufacturers are not preempted.  While such a conclusion seems counterintuitive, the majority view appears to be leaning in the direction of no preemption.  More and more courts are holding that generic manufacturers have a duty to avail themselves of the Changes Being Effected (“CBE”) process notwithstanding the “same as” requirement for Abbreviated New Drug Application (“ANDA”) approval set forth in the Code of Federal Regulations (“CFR”), and decisions to the contrary are getting reversed.

In Wyeth v. Levine, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009), the United States Supreme Court squarely addressed the issue of federal preemption in the context of FDA approval of a New Drug Application (“NDA”), concluding that state law tort claims are not preempted by the FDA approval process.  It makes sense that the Supreme Court would hold that reference listed drug manufacturers are not immune from tort actions because they have an ongoing duty to monitor the effects of their products on human health and disclose known risks through the CBE process.  See Wyeth v. Levine, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009).  Since Congress places the onus on the manufacturer to monitor the market and not the FDA, the Supreme Court reasoned that state tort actions are one of the best ways to ensure adequate monitoring of the safety and efficacy of prescription medications.  However, Levine did not address whether the same would be true of a generic drug manufacturer, nor did it discuss whether the CBE process was open to manufacturers of generic drugs.

Among the first courts to address Levine in the context of a generic manufacturer was the United States District Court for the Northern District of Illinois in Stacel v. Teva Pharmaceuticals, USA, et al., 2009 WL 73274 (N.D.Ill. 03/16/09).  See also Schrock v. Wyeth, Inc., 601 F.Supp.2d 1262 (W.D.Okla. 2009), which was decided 5 days before Stacel.  In that case, the plaintiff, Melanie Stacel, sued Teva when she allegedly developed drug-induced lupus as a result of ingesting minocycline, a generic form of the reference listed drug, Minocin®.  Specifically, she alleged that Teva had information showing that minocycline may cause lupus, but did not disclose this in its package insert.  Teva filed a motion to dismiss arguing, among other theories, that her state law claims are preempted under the FDCA and the Hatch-Waxman Act. 

As part of its analysis, the court recognized that there are three forms of federal preemption:  (1) explicit preemption, which is stated in the statute itself; (2) implied field preemption, which can be inferred either from a scheme of federal regulation so pervasive as to make reasonable the inference that Congress left no room for state regulation, or where an Act of Congress touches a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject; and (3) implied conflict preemption, where state law is preempted to the extent that it actually conflicts with federal law.  Id., quoting English v. Gen. Elec. Co., 496 U.S. 72, 78, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990).  In other words, preemption exists where it is impossible for a private party to comply with both state and federal requirements, “. . . or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”  Id., quoting English. 

In denying Teva’s motion and finding no implied conflict preemption, the court relied on its interpretation of the Code of Federal Regulations and the recent Levine decision, which held that failure-to-warn claims are not preempted as to the manufacturer of a referenced listed drug.  The court recognized that Levine is distinguishable because it did not involve a generic manufacturer, yet it nevertheless concluded that the reasoning was analogous with regard to generic manufacturers.

The Stacel court found compelling that Teva could not point to any instances where the FDA had withdrawn an Abbreviated New Drug Application (“ANDA”) because a generic drug manufacturer added to or strengthened its warning label.  Similarly, the Supreme Court in Levine also noted that it could not imagine that the FDA would bring an enforcement action against a generic manufacturer for strengthening its warning pursuant to the CBE process outlined in the CFR.  However, the question is not whether the FDA would bring an enforcement action, but instead, the question is whether Congress and the FDA found some other overriding policy consideration that it deemed to be paramount to the apparently ambiguous CBE regulations.  (While there is a colorful argument that the CBE regulations do in fact apply to generic drug manufacturers, the courts have not found persuasive conduct by the FDA and the United States government indicating that the CBE regulations were not intended to apply to generic manufacturers.  The reasons for their disregard of this expression of intent is unclear.)

As part of the ANDA process, the law requires that the manufacturer of a generic drug show that the labeling is “the same as” (or identical to) that of the reference listed drug; however, Stacel and the line of similarly situated cases hold that a generic manufacturer does in fact have an independent duty to strengthen its labeling through the CBE process, although it acknowledges that this can be done only after the approval process.  The court states that its reasoning conforms with the legislative intent behind these regulatory laws because the purpose of Hatch-Waxman was to provide a conduit by which manufacturers could produce more affordable pharmaceuticals, not to permit them to engage in negligent activities.  More particularly, courts seem to take considerable issue with the fact that a contrary holding would in effect leave an injured plaintiff without any substantive remedy.

Notwithstanding the court’s reasoning, one overriding consideration that seems to have been overlooked is the fact that professionals in the health care industry rely heavily on the consistency of labeling between manufacturers of reference listed drugs and generics.  For instance, in the context of prescription pharma, much of the information relied upon by health care professionals comes from the Physicians Desk Reference (“PDR”).  While the PDR is a commercial publication, it is widely used and often relied upon by physicians when rendering medical treatment.  Some courts have even gone so far as to say that the PDR is a learned treatise and can be relied upon as such for evidentiary purposes at trial.  See Kahanek v. Rogers, 12 S.W.3d 501 (Tex.App. San Antonio 1999). 

The PDR is a compilation of package inserts for reference listed drugs, and often times a number (although typically not all) of commonly prescribed generic equivalents are cross-referenced; however, the package inserts for generic drugs are rarely if ever included in the PDR.  Prescribing physicians typically are less familiar with a generic and write prescriptions based on their knowledge of the reference listed drug, although they typically authorize the administration of a less expensive generic if available.  Of course, the physician’s decision to authorize the use of a generic is premised on the generally accepted notion that the generic is “the same as” the reference listed drug.  If a physician was no longer able to rely on the “same as” presumption, he may be less inclined to authorize the use of a generic, which in turn results in an increased health care cost.  The same reasoning holds true for pharmacists who offer their clients a generic alternative.  Thus, the practical effect of Stacel and other similarly situated decisions on health care reform may be significant.  Surely Congress contemplated this when the legislation was passed, yet this public concern seems to have escaped the judiciary for the time being.

While Stacel may have been among the first to apply Levine to generic drug manufacturers, it certainly isn’t the last.  Recently, both the Fifth and Eighth Circuits have found that state failure-to-warn claims brought against generic drug manufacturers are not preempted by federal law.  See Mensing v. Wyeth, 588 F.3d 603 (8th Cir.2009); and Demahy v. Actavis, Inc., --- F.3d ----, 2010 WL 46513 (5th Cir. 2010).  In Mensing, the court would not say that the Code of Federal Regulations expressly permits a generic manufacturer to avail itself of the CBE process, finding instead that, in that case, it should have at least tried.  Seven weeks later, the Fifth circuit followed suit when it issued its decision in Demahy. 

Notwithstanding this line of cases, not all courts have gone so far as to extend Levine to generic manufacturers.  District courts are divided on this issue both across the country in some cases within the same state.  For instance, to date, among the post-Levine courts to address this issue, the Northern District of California, Western District of Kentucky and Southern District of Florida are among those in favor of preemption, see Gaeta v. Perrigo Pharm. Co., --- F.Supp.2d ----, 2009 WL 4250690 (N.D.Cal. Nov.24, 2009); Smith v. Wyeth, 2009 WL 425032 (W.D.Ky. Feb.20, 2009); Morris v. Wyeth, 642 F.Supp.2d 677 (W.D.Ky.2009); Wilson v. Pliva, 640 F.Supp.2d 879 (W.D.Ky.2009); and Masterson v. Apotex Corp., 2008 WL 3262690 (S.D.Fla. Aug.7, 2008), while the Northern District of Florida, New Hampshire and the Northern District of Illinois are against it, see Munroe v. Barr Labs., Inc., --- F.Supp. ---, 2009 WL 4047949 (N.D.Fla. 2009); Bartlett v. Mutual Pharm. Co., ---F.Supp. ---, 2009 WL 3126305 (D.N.H. 2009); and Stacel v. Teva Pharm., 620 F.Supp.2d 899 (N.D.Ill.2009).  Note, however, that the Kentucky decisions are currently on appeal to the Sixth Circuit, so this decision will be an important one to watch.

While both the United States and the FDA have expressed a contrary intent to this kind of broad-based application (see, for example, the FDA’s preamble to the proposed rule change relating to CBE submissions that was published in January 2008; see also Brief of the United States in support of Wyeth in Levine, 2008 WL 2308907), the prevailing trend is to find that tort actions against a generic drug manufacturer based on a failure-to-warn theory of liability are not preempted.  In the absence of a United States Supreme Court ruling or Congressional act directly aimed and correcting this inequity in the law, the majority rule will allow such claims to survive.

Lauren Fajoni Bartlett is a senior associate in the New Orleans, Louisiana, firm of Leake & Andersson, LLP.  She specializes in the areas of products liability, commercial litigation, insurance law, construction law and appellate advocacy.  She currently serves as the newsletter editor for the DRI Technology Committee, she is the vice-chair for the Technology Subcommittee for the Young Lawyer’s Section of DRI, and she also serves as the Young Lawyer representative to the DRI Insurance Law Committee.

Editor's note: Previously posted at Jim Beck's blogsite, http://druganddevicelaw.blogspot.com.

New Amendment To Rule 26 Concerning Expert Disclosures

If you're involved in drug and device (or any) product liability litigation, you're dealing with expert witnesses.  And if you're dealing with experts, you'll want to think about the proposed amendments to Fed. R. Civ. P. 26 that (if all goes smoothly) could go into effect on December 1, 2010.

They deal essentially with two things:  (1) what expert witness productions and privileges, and (2) what to do about independent witnesses qualified to offer expert opinions.

Both are very interesting.

As to expert witnesses, we've blogged before (all right, not us, but a guest post) about some of the gamesmanship that goes on with respect to the production of material that an expert "considered" - including drafts of expert opinions - under the current draft of Fed. R. Civ. P. 26(a)(2)(B), which mandates broad disclosure and contains a comment that most courts have interpreted as overriding work-product and even attorney-client privileges with respect to anything that's shown to an expert, even if the expert does not rely.

That language, and how courts interpreted it, led to a log of unintended consequences.  There's the litany of questions at expert depositions about every meeting the expert has had with counsel, what notes were taken, and what drafts exist.  There's the engagement of two parallel sets of experts, with one set designated as "consulting" (that is, non-discoverable), so that attorneys can interact with at least one set of experts in peace - and then, when everything's done, the "testifying" expert adopts the product of all that as his/her pristine report.  There's so much gamesmanship that, in a lot of cases, the parties agree to stipulate out of this language.  Why is all this done?  Because every now and then, some lawyer screws up and the other side gets really valuable.  See, e.g., Synthes Spine Co., L.P. v. Walden, 232 F.R.D. 460 (E.D. Pa. 2005), for a cautionary tale.

Anyway, after 12/1/10, a lot of this (although probably not all) should be a thing of the past.  The rules committee has amended Rule 26(a)(2)(B) to limit expert disclosures to "facts or data" (not the broader term "information") that the witness considered.  The new draft specifically recognizes work product privilege for drafts and attorney communications with experts with a couple of exceptions in an entirely new section, Rule 26(b)(4)(B-C).  Here's the new language in toto:
(B) Trial-Preparation Protection for Draft Reports or Disclosures. Rules 26(b)(3)(A) and (B) protect drafts of any report or disclosure required under Rule 26(a)(2), regardless of the form in which the draft is recorded.

(C) Trial-Preparation Protection for Communications Between a Party’s Attorney and Expert Witnesses. Rules 26(b)(3)(A) and (B) protect communications between the party’s attorney and any witness required to provide a report under Rule 26(a)(2)(B), regardless of the form of the communications, except to the extent that the communications:
(i) relate to compensation for the expert’s study or testimony;
(ii) identify facts or data that the party’s attorney provided and that the expert considered in forming the opinions to be expressed; or
(iii) identify assumptions that the party’s attorney provided and that the expert relied upon in forming the opinions to be expressed.

Thus the only exceptions to the scope of the privilege are compensation (including compensation over the entire course of related litigation), what the attorney gave the witness to consider (so we'll still be able to establish if the attorney did the expert's research for him/her), and what assumptions the attorney told the expert to make (so we'll still be able to establish if the attorney did the expert's thinking for him/her).
All the other stuff - draft reports, notes, oral conversations, etc. - are now explicitly protected from discovery by the work product doctrine and the usual requirements of that doctrine.  That means that attorneys on both sides can talk to their experts unimpeded, let them take notes, let them prepare drafts, edit those drafts, etc., free from fear of inadvertent disclosure, gotcha games and all the rest the current version of Rule 26 has engendered.   In short, it will no longer be necessary to treat experts as if they were radioactive.

It also marks the final recognition by the Rules Committee of the role that expert witnesses play in modern litigation - that they're a part and parcel of a party's case and not part of some sort of independent search for the truth.  For those seeking utopia, there's still the option of a court appointed expert under Rule 706, but experts are now essentially no different than co-counsel, legal assistants, and the like as far as work product is concerned.

A few other things to think about with this new rule.  First, it's not retroactive, and the earliest it could go into effect would be December 1, 2010.  Increasingly, as we get closer to this deadline, we'll have to keep it in mind when considering discovery scheduling.  We're on our own until then.  Second, there doesn't seem to be any intent to affect substantive Daubert decision-making.  The stuff necessary to establish that an expert has abdicated his research or reasoning to the attorney is still discoverable.  Third, since some parts of expert notes might be discoverable under the exceptions in new Rule 26(b)(4)(C), it's probably a good idea to have the expert designate specifically when any notes are of conversations with retaining counsel.  It's still a good idea to take that sort of rudimentary precaution to make assertion of privileged status easier.

That's one part of the amendment to Rule 26.  The other has to do with designation of experts who are not retained by parties.  In our neck of the woods that usually means treating physicians and other health care providers.  There's a new section, Rule 26(a) (2) (C) that provides that non-retained experts don't have to provide reports to be entitled to give opinions.  The attorney designating such a witness simply has to describe the anticipated testimony:

(C) Witnesses Who Do Not Provide a Written Report. Unless otherwise stipulated or ordered by the court, if the witness is not required to provide a written report, this disclosure must state:
(i) the subject matter on which the witness expected to present evidence under Federal Rule of Evidence 702. 703. or 705 and
(ii) a summary of the facts and opinions to which the witness is expected to testify.
This rule is intended to make it easier to get opinion, as well as fact, testimony from persons such as treating physicians (but also employees of corporate parties) who aren't being paid for their testimony and thus can't be expected to jump through the hoops erected for retained experts.  It's expected to put a halt to the "you can ask facts but not opinions" fights that currently crop up at depositions of this sort of witness.

The new Rule 26(a)(2)(C) draws no distinctions between the sides.  Thus, defendants are as free to designate and describe the opinion testimony of plaintiffs' treating physicians as plaintiffs are.  The amendment commentary states:
A witness who is not required to provide a report under Rule 26(a)(2)(B) may both testify as a fact witness and also provide expert testimony under Evidence Rule 702, 703, or 705.  Frequent examples include physicians or other health care professionals and employees of a party who do not regularly provide expert testimony.  Parties must identify such witnesses under Rule 26(a)(2)(A) and provide the disclosure required under Rule 26(a)(2)(C). The (a)(2)(C) disclosure obligation does not include facts unrelated to the expert opinions the witness will present.
Rules Appendix at C-29.

That's got us thinking.  Well, if we can freely designate treaters as expert witnesses, then it follows that we can talk to them, doesn't it?  With the federal rules now explicitly recognizing both sides' equal rights to call treaters as experts for the first time, this amendment should lend additional force to what's already the majority rule:  that state-law procedurally restrictions on defendants talking to treaters - other than privileges (which are usually waived by a plaintiff's filing suit) - are inapplicable in federal court.  We've discussed that rule before here.  And, as we've also discussed before, HIPAA expressly exempts the "lawful process" of "judicial proceedings" from its scope

We offer no predictions on the ultimate result, but we've now got another arrow in our quiver in our search for equal rights to informal interviews of treating physicians.