February 2014: Life Sciences Litigation Update

by Quinn Emanuel Urquhart & Sullivan, LLP
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Can the FDA Be Held Liable in a Private Lawsuit for Failure to Prevent Recent Drug Shortages? In Carik et al. v. United States Dep’t of Health & Human Servs. et al., CV 12-272, __ F. Supp. 2d __, 2013 WL 6189313 (D.D.C. Nov. 27, 2013), the U.S. District Court of the District of Columbia granted a motion to dismiss for lack of subject matter jurisdiction, which was filed by the U.S. Department of Health and Human Services, the U.S. Food and Drug Administration, and the U.S. National Institutes of Health (“the Defendants”), in a case in which the Plaintiffs had sought declaratory, injunctive and monetary relief for failure to ensure an adequate supply of prescription drugs.

All but one of the Plaintiffs suffered from a rare and potentially life threatening condition known as Fabry disease and were being prescribed the drug “Fabrazyme,” the only drug approved in the United States to treat Fabry disease. In 2009, there was a shortage of Fabrazyme after it was discovered that the manufacturer, Genzyme, had placed virus adulterated product into interstate commerce. This shortage resulted in a Consent Decree between the U.S. Department of Justice and Genzyme, which gave the government limited oversight over Genzyme’s manufacturing facility. As a result of the shortage, Genzyme convened a panel to recommend how to manage the remaining supply of Fabrazyme. The panel advised physicians to provide doses at levels reduced as much as thirty percent of normal to avoid depletion of the supply of Fabrazyme. In 2010, Mr. Carik, one of the plaintiffs suffering from Fabry disease, petitioned the U.S. National Institutes of Health to use its “march-in rights” under the Bayh-Dole Act on the ‘804 patent for Fabrazyme which would enable the federal government to force the patent holder to “grant a nonexclusive, partially exclusive, or exclusive license” where a “Federal agency determines that such . . . action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees.” The government has never exercised its “march-in” authority. Carik et al. v. United States Dep’t of Health & Human Servs. et al., CV 12-272, 2013 WL 6189313 at *3 (D.D.C. Nov. 27, 2013)(citing Defs. Mem. at 11).

The last Plaintiff suffered from vitamin A deficiency disease and was being prescribed a drug known as “Aquasol A” to treat the condition. Aquasol A is the only drug approved in the United States to treat the type of vitamin A deficiency afflicting the Plaintiff. A worldwide shortage occurred in 2010 when the manufacturer, Hospira, transferred manufacturing of the drug to a different facility.

The Plaintiffs sued in February 2012 alleging five claims: (1) violations of the Doctrine of Separation of Powers; (2) violation of the 10th Amendment of the United States Constitution; (3) violation of the Patent Clause of the U.S. Constitution; (4) violation of the 5th Amendment; and (5) violation of the Food, Drug and Cosmetics Act. In response, the Defendants moved to dismiss all claims for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. The court agreed that the Plaintiffs failed to meet the standing requirement and did not discuss other defenses.

Relying on the Supreme Court’s three-prong test for standing under Article III of the U.S. Constitution, the court first determined the Fabry Plaintiffs failed to indicate they had indeed suffered an “injury in fact” based on both their asserted physical injuries and depravation of Constitutionally protected rights. Although not completely barred in the D.C. Circuit, the court also determined the Fabry Plaintiffs failed to show standing based on “probabilistic injuries” caused by diluted dosages of Fabrazyme. However, the vitamin A deficient Plaintiff met this prong of the test by pleading that the disease had caused a worsening of eyesight and without treatment the loss of eyesight would be irreversible.

Second, the court found no causal link between the injuries and the Defendants’ conduct, rather all of the alleged injuries were caused by independent third-party actions—i.e., the pharmaceutical companies’ manufacturing activities, or lack thereof. In response to the Plaintiffs’ first causation argument, the court held that Defendants have no duty, statutorily or otherwise, to alleviate drug shortages by halting Hospira’s transfer of manufacturing to a different facility without an adequate stockpile of product. Additionally, the Plaintiffs attempted to show causation through the defendants’ indirect approval of the Fabrazyme rationing plan based on their Consent Decree oversight of Genzyme, awareness of the plan and lack of action to stop the plan. Ultimately, the court rejected this argument, holding it would be unfair to attribute the actions of third-party pharmaceutical companies based on the Defendants’ limited oversight because “[e]ven extensive regulation by the government does not transform the actions of the regulated entity into those of the government,” and “[m]ere approval of or acquiescence in the initiatives of a private party is not sufficient to justify holding the [government] responsible for those initiatives” (quoting S.F. Arts & Athletics, Inc. v. U.S. Olympic Comm., 483 U.S. 522, 544 (1987); Blum v. Yaretsky, 457 U.S. 991, 1004-05 (1982). Thus, the Plaintiffs failed to show causation by arguing a duty to act or by limited agency oversight and did not have standing under Article III.

Finally, despite having already determined the Plaintiffs’ lack of standing under Article III, the Court determined that because the Plaintiffs suffered no injury attributable to the Defendants, any Court action could not remedy their suffered injuries.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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