The Patent Troll Threat To Pharmaceutical Companies

In recent months patent litigation abuse by so-called “patent trolls” has gotten the attention of lawmakers, state attorneys general and even President Obama, who called for patent litigation reform during his State of the Union address. And, while the primary targets of such litigation abuse so far have been technology companies, a recent study cited in Law360 warns that in the absence of patent reform legislation, patent trolls will soon set their sights on bio-pharmaceutical companies. [Read more...]

Cash-Payment Rule Needed For Pay-For-Delay Litigation Frenzy

The fallout from the Supreme Court’s decision last Summer in FTC v. Actavis remains unabated as a host of purported classes of direct and indirect drug payers continue to file suits against branded and generic manufacturers for settling their Hatch-Waxman disputes in deals involving delayed market entry of cheaper, generic drugs.  While some of the settlements involved a genuine cash “reverse payment” from the branded to the generic manufacturer, as was the case in Actavis, settlements lacking any cash payment are also under attack.  However, a recent dismissal of a pay-for-delay federal suit in New Jersey on the basis that no cash reverse payment was involved will likely cause the Third Circuit and perhaps eventually the Supreme Court to decide whether Actavis’s antitrust “rule of reason” approach can and should be applied to non-cash reverse payment settlements.  [Read more...]

Government Slams Ranbaxy Again Over Plant In India

Last week the FDA announced that Ranbaxy’s Toansa plant in India failed inspection — the sixth Ranbaxy plant to cease making drugs for the U.S. market following revelations from a whistleblower that the generic drugmaker had flagrantly disregarded cGMP regulations in its manufacturing facilities.  Is this latest enforcement action nothing more than proof that Ranbaxy remains in the agency’s crosshairs, or is it yet another signal that the Government intends to ramp up cGMP-based FCA actions against pharmaceutical manufacturers? [Read more...]

Will GSK’s Incentive Compensation And Speaker Program Initiatives Set The Tone For 2014?

When British drug giant GlaxoSmithKline PLC (“GSK”) announced last month that it was implementing a new global marketing strategy to transform the way it sells and markets drugs to both doctors and patients, many commentators were quick to announce that a fundamental shift in the pharmaceutical business was underway.   While GSK’s announcement was significant in terms of precedence and scope, it is unclear at best whether other pharmaceutical companies will follow suit. [Read more...]

Feds Raid Reckitt Benckiser Offices; Criminal Probe Underway

Reckitt Benckiser’s offices in Richmond, Va., were raided by a team of IRS and Office of Inspector General (OIG) agents on December  3rd.  The raid comes only a few weeks after the New York Times published an article on November 16 about the incongruity of Reckitt Benckiser’s wonder drug, Suboxone—positioned as both a helpful medication that treats addiction and a potential street drug that fuels dependency.  For the U.K. consumer goods giant, last week’s raid isn’t just more bad news – it’s the worst kind of news any company can get.  [Read more...]

Aegerion CEO’s Remarks On Television Highlight Off-Label Free Speech Issue Once Again

According to the FDA’s Office of Prescription Drug Promotion (“OPDP”), Marc Beer, the CEO of biopharmaceutical firm Aegerion Pharmaceuticals, overstepped his bounds when he allegedly made misleading statements about Aegerion’s cholesterol-lowering drug, Juxtapid™ on two televised appearances on CNBC.   As a result, Aegerion received a warning letter earlier this month from OPDP, admonishing Beer for his transgressions, accusing the Company of misbranding Juxtapid™ and asking for corrective action.  Although it makes business sense for Aegerion to “play ball” with the FDA and do whatever it takes to convince the agency that there was no intent to promote Juxtapid™ off-label, Beer’s comments are a reminder of the free speech issue embedded in any discussion about a drug or device product that falls outside the friendly confines of the product’s labeling. [Read more...]

FDA Proposed Rule Would “Preempt” Supreme Court Rulings in Pliva and Bartlett

Last week the FDA announced a proposed Rule that would put generic manufacturers on the same “products liability” footing as branded manufacturers.  By requiring generic manufacturers to update their labels to take into account new safety information, the FDA rule would effectively overrule the Supreme Court’s holdings in PLIVA v. Mensing and Mutual Pharmaceutical Co., Inc., v. Bartlett, which effectively barred most state law products liability suits against generic drug manufacturers on federal preemption grounds. [Read more...]

J&J to Pay $2.2 Billion To End Long-Standing Investigations By Feds

Charges of off-label marketing and kickback payments to physicians and long-term care pharmacy provider Omnicare are behind a $2.2 billion settlement agreement between Johnson & Johnson (“J&J”) and the U.S. Department of Justice (DOJ), in which the global health care giant finally resolves criminal and civil liability involving Risperdal and two other prescription drugs.  The eye-popping figure makes this the third largest health care fraud settlement in U.S. history. [Read more...]

Using A Company’s “Intrinsic” Value In Defending Securities Fraud Suits

A recent securities class action lawsuit filed in a Connecticut federal court charges that Achillion Pharmaceuticals, Inc., and its CEO and CFO misled investors by failing in an adequate and timely fashion to disclose clinical information and FDA actions related to sovaprevir, an Achillion drug under study for the treatment of hepatitis infections.  If the Connecticut-based pharmaceutical company’s ability to fend off the allegations of the Complaint turns on the relationship between the Company’s “disclosures” and drops in its stock price (as the plaintiff and his lawyers would like), the Company may have a problem.  However, as M&A lawyers are learning in the context of garden variety shareholder litigation and appraisal rights litigation, one available defense may lie in the Company’s ability to demonstrate the long-term “fair” or “intrinsic” value of its stock. [Read more...]

Lilly Scientists Prosecuted For Trade Secret Theft

Two former Eli Lilly scientists were arrested and charged by the U.S. Government for stealing and transmitting Lilly trade secrets to a Chinese company.  Guoqing Cao and Shuyu Li, both research scientists with doctoral degrees, have been charged with multiple counts of trade secrets theft and conspiracy in violation of 18 U.S.C. Sections 1832 and 371, according to an Indictment that was recently unsealed by the U.S. Attorney’s Office in Indianapolis.  The charges against the two naturalized U.S. citizens, who will remain in custody for leaking trade secrets to a Lilly competitor in China, provides an abject lesson for both pharmaceutical companies that fail to safeguard trade secrets and other proprietary information and employees who get caught by federal authorities. [Read more...]