MERCK, VIOXX AND THE FDA :: Michael Shulman's Biotech Blitz

MERCK, VIOXX AND THE FDA

A few days ago a critically important ruling came down from a Federal judge, a ruling that seems limited in its' scope but is not.

The judge said that receiving an FDA approval and label - basically how the drug is to be used, including warnings - does not protect a drug manufacturer from a patient claim that the warnings were inadequate. The ruling came in the context of a suit against Merck about its arthritis drug, (and purported heart attack causing drug) Vioxx.

The judge was somewhere between unambiguous and strident in his decision, which is just fine with me. "The FDA's current view on the question of immunity for prescription drug manufacturers is entirely unpersuasive," said U.S. District Judge Eldon Fallon. The decision was handed down on July 3rd.

Merck had asked for a dismissal of the lawsuit on the grounds the FDA had given it approval to market the drug with warnings, and this regulatory stamp was a go-ahead for the company that made it immune from lawsuits.

What the judge may not have thought through completely was the impact of a negative ruling - assuming it stands up through the appeals process - and that is simply that the label would mean very little anymore.

And, if I were a plaintiff's lawyer (which means I would be wealthy enough to write this and 10 other blogs every day, not to mention having time to write the great American novel) I would take this ruling and say, "Hey, the FDA label means nothing. Anyone who has an adverse reaction to a drug, even if there's a warning label, is a client."

Good job, Merck.

Technically, the lawsuit said the warning was not enough. And, technically, the judge ruled the driver behind the decision was pure legality: The decision said the patients could sue in state courts, regardless of the label warnings, because there is no redress for harmed patients through the federal court system.

The judge actually wrote, "Because there are no federal remedies for individuals harmed by prescription drugs, a finding of implied preemption in these cases would abolish state-law remedies and would, in effect, render legally impotent those who sustain injuries from defective prescription drugs."

That is true. So Merck screwed up twice - it not only helped create a legal decision that made labels useless in a defense against a plaintiff's lawsuit, it reinforced lawyers' belief they would do much better in state courts, where they pretty much start these kinds of legal proceedings, anyway.

Let's give them - Merck I mean - a trifecta in the "screw up department." This decision, if upheld by the Supreme Court (and I think it will be given its bias towards states' rights), could also be applicable to other claims by federal agencies that their regulatory imprimatur obviates states rights and the ability of consumers to sue in state courts. The final word on this is probably three years away as the case winds its' way to the Supreme Court.

Bottom line: believe it or not, I like tort attorneys - most of the products I own or would consider buying (other than those made in China) are better because of these vultures. Yes, vultures, who serve a vital purpose in the legal ecosystem. Yeah for them, they should get more aggressive and be fair - almost an impossibility given the personality profile of the tort attorneys I have met.

And for investors, the threat or reality of lawsuits just got a bit riskier for stocks.

Comments

A few days ago a critically important ruling came down from a Federal judge, a ruling that seems limited in its' scope but is not. The judge said that receiving an FDA approval and label - basically how the drug is to be used, including warnings - does not protect a drug manufacturer from a patient claim that the warnings were inadequate. The ruling came in the context of a suit against Merck about its arthritis drug, (and purported heart attack causing drug) Vioxx. The judge was somewhere between unambiguous and strident in his decision, which is just fine with me. "The FDA's current view on the question of immunity for prescription drug manufacturers is entirely unpersuasive," said U.S. District Judge Eldon Fallon. The decision was handed down on July 3rd. Merck had asked for a dismissal of the lawsuit on the grounds the FDA had given it approval to market the drug with warnings, and this regulatory stamp was a go-ahead for the company that made it immune from lawsuits. What the judge may not have thought through completely was the impact of a negative ruling - assuming it stands up through the appeals process - and that is simply that the label would mean very little anymore. And, if I were a plaintiff's lawyer (which means I would be wealthy enough to write this and 10 other blogs every day, not to mention having time to write the great American novel) I would take this ruling and say, "Hey, the FDA label means nothing. Anyone who has an adverse reaction to a drug, even if there's a warning label, is a client." Good job, Merck. Technically, the lawsuit said the warning was not enough. And, technically, the judge ruled the driver behind the decision was pure legality: The decision said the patients could sue in state courts, regardless of the label warnings, because there is no redress for harmed patients through the federal court system. The judge actually wrote, "Because there are no federal remedies for individuals harmed by prescription drugs, a finding of implied preemption in these cases would abolish state-law remedies and would, in effect, render legally impotent those who sustain injuries from defective prescription drugs." That is true. So Merck screwed up twice - it not only helped create a legal decision that made labels useless in a defense against a plaintiff's lawsuit, it reinforced lawyers' belief they would do much better in state courts, where they pretty much start these kinds of legal proceedings, anyway. Let's give them - Merck I mean - a trifecta in the "screw up department." This decision, if upheld by the Supreme Court (and I think it will be given its bias towards states' rights), could also be applicable to other claims by federal agencies that their regulatory imprimatur obviates states rights and the ability of consumers to sue in state courts. The final word on this is probably three years away as the case winds its' way to the Supreme Court. Bottom line: believe it or not, I like tort attorneys - most of the products I own or would consider buying (other than those made in China) are better because of these vultures. Yes, vultures, who serve a vital purpose in the legal ecosystem. Yeah for them, they should get more aggressive and be fair - almost an impossibility given the personality profile of the tort attorneys I have met. And for investors, the threat or reality of lawsuits just got a bit riskier for stocks.