Pharma news highlights: lawsuits and recalls

Ed Silverman


In his last article of 2012, Ed Silverman discusses some of the recent pharma developments, looking at US lawsuits, a bid for a central data repository and Ranbaxy’s drug recall.

(Continued from “Pharma news highlights: Roche, Sanofi and more”)

The end of the year must be near, because a batch of interesting developments has occurred over the past few weeks, signifying an attempt by many to clear their calendars. Then again, the news never stops. Here is what has been happening…

Earlier this month, a three-judge appeals court panel in the US overturned the conviction of a former sales representative, who argued that prosecuting him for remarks made about off-label use violated his free speech rights. The ruling has been highly controversial amid an ongoing debate over the extent to which the US FDA can limit marketing and the rights of commercial free speech.

In their decision, the 2-to-1 majority cited a US Supreme Court ruling early last year that struck down a highly controversial Vermont law, which restricted the sale of prescription drug data identifying prescribers and patients for commercial marketing purposes. Specifically, the court ruled that “speech in aid of pharmaceutical marketing… is a form of expression protected by… the First Amendment.

Since then, the pharmaceutical industry has used that ruling to argue off-label promotion is a form of protected speech. In fact, Par Pharmaceutical made the same essential argument in its own lawsuit that was filed shortly after the Supreme Court issued its decision about the Vermont law, which was known formally as Sorrell vs. IMS Health.


“The ruling has been highly controversial amid an ongoing debate over the extent to which the US FDA can limit marketing and the rights of commercial free speech.”


For the moment, it is unlikely that decision in this latest case, United States v. Caronia, is going to open the floodgates for off-label marketing. For one thing, an appeal is likely. Moreover, the panel noted a key distinction, which is that off-label promotion that is false and misleading is not protected speech. Of course, such distinctions are bound to become triggers for debate.

Supreme Court review pay-to-delay deals

Meanwhile, the Supreme Court agreed to review pay-to-delay deals, a description for patent settlements between brand-name drug makers and their generic counterparts. Whichever way the court goes, the decision is likely to influence the cost of medicines for millions of Americans for years to come, because the ruling is expected to determine the pace at which lower-cost generic drugs become available.

Drug makers have struck dozens of these deals over the past decade or more, partly in response to expiring patents on blockbuster drugs. But the settlements prompted increasing scrutiny at a time of rising health care costs, fueling arguments made by the US Federal Trade Commission, in particular, which says these deals cost consumers some $3.5 billion annually.

The fact that the court decided to review these contentious deals – which the pharmaceutical industry maintains speeds lower-cost generics to market, but opponents argue is harmful antitrust activity – was not a surprise. The issue has divided lower courts for years and, in fact, both Merck and the FTC filed petitions asking the court to review separate cases.

PhRMA file law suit against Alameda County

Meanwhile, the trade groups representing drug makers and biotechs have filed suit against a California county that recently voted unanimously to require the pharmaceutical industry to pay for the disposal of unused and expired prescription medicines. Their beef? The ordinance is unconstitutional.

The ordinance passed by Alameda County is being closely watched by other local governments around the country, because it is the first of its kind in the US and comes after the pharmaceutical industry lobbied to defeat the effort over concerns that the costs of compliance would be prohibitively expensive.

In arguing their case, PhRMA, the Generic Pharmaceutical Association and the Biotechnology Industry Organization maintain that safe disposal of unwanted medicines is a shared responsibility and the ordinance unfairly requires drug makers to develop, manage and fund disposal operations. In their view, local government should foot the bill and, instead, pill-popping patients elsewhere will subsidize the program in the form of higher costs spread around.


“…safe disposal of unwanted medicines is a shared responsibility…”


But Alameda County officials say they are unable to pay for such a program. County residents currently can drop off medications at 28 different locations at a cost of about $330,000 annually. As they see it, the pharmaceutical industry profits off consumption and should be required to help pay for disposal of medicines that would otherwise contribute to groundwater pollution or drug addiction, since unused meds may be left accessible in medicine cabinets.

Ranbaxy recall Lipitor

The recent recall of more three dozen lots of generic Lipitor due to glass particles has tremendously eroded confidence in Ranbaxy Laboratories. And now, a New Jersey man has filed a lawsuit in hopes of forcing the troubled drug maker to provide better information, as well as a refund for consumers.

The recall was only made at the pharmacy level, which means that consumers were not directly notified of the problem or how to respond if they became aware. Although pharmacies were alerted, Ranbaxy did not make any public statement until a brief notice was placed on its web site on November 23, prompting media coverage. The ensuing publicity then spurred the drug maker to place a more traditional press release on its website on November 28.

An FDA spokeswoman explained that, after November 9, the agency received and reviewed additional information about the recall, which led on November 30 to classify the recall as Class II, which means the risk to patients is extremely low. She added that Class II recalls are conducted at the pharmacy level, not the consumer level. A Class II recall may cause temporary or medically reversible health problems, or the probability of serious health problems is remote.


“…a New Jersey man has filed a lawsuit in hopes of forcing the troubled drug maker to provide better information…”


Just the same, the lawsuit argues that Ranbaxy should have taken the initiative to alert consumers directly and promptly, and also maintains that the drug maker should have provided instructions on how to respond to the recall and information on obtaining a refund. Ranbaxy spokesman declined to comment on the litigation.

The episode occurs at a difficult time for Ranbaxy. In January, a consent decree was signed for a permanent injunction that prevents the drug maker from making medicines for the US market until certain facilities meet US standards. Ranbaxy set aside $500 million to cover all potential civil and criminal liability, but the final amount of any settlement has not yet been decided. Ranbaxy says the active pharmaceutical ingredient was made in India and the finished product was assembled in both India and the US.

Bid to produce centralized data repository

In a bid to simplify increasing demands to report conflicts of interest held by physicians and researchers, a leading group of academics, policymakers and ethics experts are proposing the creation of a centralized data repository to house all disclosures and increase transparency in medical research and practice.

The sort of information that would be gathered in this new entity, which would have non-profit status, would include fees for services, intellectual property rights, grants from industry, investment and ownership stakes in businesses, and other items such as travel, food, lodging, and gifts, according to a new proposal that was disclosed in a paper from the Institutes of Medicine.

By creating a centralized repository, physicians and researchers could presumably avoid time-consuming and duplicative efforts to provide such information to institutions – medical schools, teaching hospitals, journals, professional societies, continuing education providers, and federal agencies – that require separate disclosure statements.

The proposal was crafted by representatives of several institutions, including the FDA, the National Institutes of Health, the National Library of Medicine, the American Medical Student Association, the Centers for Medicare &amp, Medicaid Services, Partners Healthcare, Pew Charitable Trusts, Cleveland Clinic, Consumers Union, The New England Journal of Medicine, and the Council of Medical Specialty Societies, among others.

You can read the next ‘Pharma news highlights’ here


About the author:

Ed Silverman is a prize-winning journalist who has covered the pharmaceutical industry for the past 16 years. In addition to editing Pharmalot, he is currently an editor-at-large for Med Ad News.

Previously, he was a bureau chief for The Pink Sheet, the venerable industry newsletter, and a contributor to its sister publication, In Vivo magazine. Before that, Silverman worked as a business writer for The Star-Ledger of New Jersey, one of the nation’s largest daily newspapers, where he conceived and launched Pharmalot. During his 13-year tenure, he closely followed a variety of topics of concern to those who work for, and with, drug makers – drug development, mergers and acquisitions, regulatory oversight, safety and pricing controversies, and marketing issues.

Prior to joining The Star-Ledger, Silverman spent six years at New York Newsday and previously worked at Investor’s Business Daily, among other newspapers. He has a master’s degree in journalism from New York University and a bachelor’s degree in accounting from Binghamton University. Tethered to his laptop and Blackberry, Silverman lives in suburban New Jersey with his wife, three children, a sizeable Labrador retriever and a sneaky beagle.

What’s been your pharma news highlight of 2012?