Justia U.S. 2nd Circuit Court of Appeals Opinion SummariesArticles Posted in Drugs & Biotech
Nguyen v. NewLink
Plaintiffs filed a class action under S.E.C. Rule 10b-5, 17 C.F.R. 240.10b-5, following the failure of NewLink's Phase 3 clinical trial for a novel pancreatic cancer drug and the resulting decline in the market value of NewLink shares.The Second Circuit held that defendants' statements about the efficacy of their pancreatic cancer drug were puffery, not material misrepresentations. However, the court held that plaintiffs plausibly pled material misrepresentation and loss causation for defendants' statements about the scientific literature and the design of their clinical trial. Therefore, the court affirmed the district court's dismissal in part regarding the 2013-2016 Assessments; vacated the dismissal in part regarding the September, March, and Enrollment statements; and remanded for further proceedings. View "Nguyen v. NewLink" on Justia Law
Critcher v. L’Oreal USA, Inc.
The Food Drug and Cosmetic Act's (FDCA) broad preemption clause, 21 U.S.C. 379s, bars plaintiffs from seeking to impose additional or different labeling requirements through their state-law claims, especially when Congress and the FDA already have provided for specific labeling requirements. Plaintiffs filed suit against L’Oréal, alleging common law claims for unjust enrichment and breach of the implied warranty of merchantability, as well as claims under eight state consumer protection statutes. Plaintiffs believed they were being deceived into buying more product, because a portion of each of the liquid cosmetics they purchased could not be extracted.The Second Circuit affirmed the district court's dismissal of the complaint, holding that plaintiffs' state law claims at issue are preempted by the FDCA. In this case, plaintiffs alleged that their injuries resulted from the fact that the labels of the various L’Oréal products omitted certain critical information—specifically, that the creams could not be fully dispensed from their respective containers. Plaintiffs also admit that the packages comply with federal labeling requirements. The court explained that, if plaintiffs were permitted to move forward with their claims, they would be using state law to impose labeling requirements on top of those already mandated in the FDCA and the regulations promulgated thereunder. View "Critcher v. L'Oreal USA, Inc." on Justia Law
Gibbons v. Bristol-Myers Squibb Co.
In this multi-district litigation, plaintiffs brought a series of products liability actions against the makers of Eliquis for injuries they or their decedents suffered while taking the drug. In the multi-district litigation, the district court denied motions to remand many of the actions to state court and then dismissed 64 suits.The Second Circuit affirmed, holding that 28 U.S.C. 1441(b)(2) was no barrier to the removal of the transferred actions at issue. The court held that a home‐state defendant may in limited circumstances remove actions filed in state court on the basis of diversity of citizenship, was authorized by the text of Section 1441(b)(2), and was neither absurd nor fundamentally unfair. The court also affirmed the dismissal of plaintiffs' negligence and strict liability claims as preempted by the Food, Drug, and Cosmetics Act. In this case, plaintiffs' claims consisted of conclusory and vague allegations and did not plausibly allege the existence of newly acquired information. Therefore, plaintiffs' allegations were insufficient to state a claim that was not preempted. View "Gibbons v. Bristol-Myers Squibb Co." on Justia Law
United States v. Scully
A jury found William Scully guilty of mail and wire fraud and conspiracy to commit mail and wire fraud, conspiracy to defraud the United States through the introduction of misbranded drugs into interstate commerce, introduction of misbranded drugs into interstate commerce, receipt of misbranded drugs into interstate commerce and delivery thereof for pay, introduction of unapproved drugs into interstate commerce, and unlicensed wholesale distribution of prescription drugs. He was sentenced principally to 60 months in prison. The main issue on appeal was whether the district court properly excluded evidence relating to Scully’s advice-of-counsel defense. Because the Second Circuit found that the evidence was admissible and its exclusion was not harmless error, it vacated the district court’s judgment and remanded for further proceedings. View "United States v. Scully" on Justia Law
In re ACTOS End-Payor Antitrust Litigation
Plaintiffs filed a class action alleging that Takeda prevented competitors from timely marketing a generic version of Takeda’s diabetes drug ACTOS by falsely describing two patents to the FDA. Plaintiffs claimed that these false patent descriptions channeled Takeda’s competitors into a generic drug approval process that granted the first-filing applicants a 180-day exclusivity period, which in turn acted as a 180-day "bottleneck" to all later-filing applicants. 9 out of 10 generic applicants took that route. Teva was prevented from seeking approval via another regulatory mechanism when the FDA announced that all generic manufacturers would be required to take the bottlenecked route. Plaintiffs alleged that they were wrongfully obligated to pay monopoly prices for ACTOS when Takeda's patent on the active ingredient in ACTOS expired when the mass of generic market entry occurred. The district court dismissed plaintiffs' antitrust claims. The court affirmed to the extent that plaintiffs' theory posits a delay in the marketing of generic alternatives to ACTOS by all the generic applicants other than Teva, because plaintiffs' theory presupposes that these applicants were aware of Takeda’s allegedly false patent descriptions when they filed their applications, which is not supported by well-pleaded allegations. However, the court concluded that plaintiffs' theory as to Teva does not require any knowledge of the false patent descriptions. Therefore, the court reached other issues as to Teva and found plaintiffs plausibly alleged that Takeda delayed Teva's market entry. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "In re ACTOS End-Payor Antitrust Litigation" on Justia Law
United States ex rel. Polansky v. Pfizer
Plaintiff appealed the dismissal of his suit brought under the False Claims Act (FCA), 31 U.S.C. 3729(a)-(b), and state analog. Plaintiff alleged that Pfizer, his former employer, improperly marketed Lipitor as appropriate for patients whose risk factors and cholesterol levels fall outside the National Cholesterol Education Program Guidelines; the Guidelines are incorporated into and made mandatory by the drug’s label; and Pfizer thus induced doctors to prescribe the drug, pharmacists to fill the prescriptions, and federal and state health care programs to pay for “off‐label” prescriptions. Judge Cogan dismissed the claims because he determined that the FDA’s approval of Lipitor was not dependent upon compliance with the Guidelines. The court expressly endorsed and adopted Judge Cogan’s carefully considered and thorough analysis, and affirmed on that basis. View "United States ex rel. Polansky v. Pfizer" on Justia Law
Apotex Inc. v. Acorda Therapeutics, Inc.
Apotex filed suit alleging that Acorda filed a sham citizen petition with the FDA to hinder approval of Apotex's competing formulation of a drug for treating spasticity, in violation of Section 2 of the Sherman Act, 15 U.S.C. 2, and that Acorda violated the Lanham Act's, 15 U.S.C. 1125(a)(1), proscription on false advertising. The district court ruled that the simultaneous approval by the FDA of Apotex’s drug application and its denial of Acorda’s citizen petition was by itself insufficient to support a Sherman Act claim. The district court then granted summary judgment and dismissed all of Apotex’s false advertising claims on the grounds that (with the exception of one graph) no representation was literally false or likely to mislead consumers. In regard to the graph, Apotex failed to show that the false depiction would meaningfully impact consumers’ purchasing decisions. The court concluded that, although precedent supports an inference that a citizen petition is an anticompetitive weapon if it attacks a rival drug application and is denied the same day that the application is approved, that inference has been undercut by recent FDA guidance. As to false advertising, the court agreed with the district court that no reasonable jury could have found that Acorda made literally false or misleading representations in its advertisements, with the exception of a single representation that Apotex has failed to show affected decisions to purchase. Accordingly, the court affirmed the judgment. View "Apotex Inc. v. Acorda Therapeutics, Inc." on Justia Law
In re Pfizer Inc. Securities Litigation
Plaintiffs filed suit against Pfizer and others, alleging violations of federal securities laws because Pfizer made fraudulent misrepresentations and fraudulently omitted to disclose information regarding the safety of two of its drugs, Celebrex (celecoxib) and Bextra (valdecoxib). On appeal, plaintiffs argued that the district court abused its discretion in excluding the testimony of plaintiffs' expert regarding loss causation and damages. The court concluded that the district court abused its discretion by excluding the expert's testimony in its entirety; the district court erred in concluding that the expert needed to disaggregate the effects of Pfizer’s allegedly fraudulent conduct from Searle’s or Pharmacia’s, regardless of whether Pfizer is ultimately found liable for the latters’ statements; the testimony could have been helpful to the jury even without such disaggregation; as to the expert's adjustment to the price increases, the district court did not abuse its discretion in concluding that this change was not sufficiently reliable to be presented to a jury; the expert's error did not render the remainder of his testimony unreliable and the district court should have prevented him from testifying about the adjustment, but otherwise allowed him to present his findings on loss causation and damages; the district court erred in concluding, as a matter of law, that Pfizer had insufficient authority over certain Searle and Pharmacia statements as to have “made” them; but, however, the court's finding that the district court abused its discretion in excluding the expert's testimony does not turn on the question of Pfizer’s ultimate liability for these statements. Accordingly, the court vacated the district court's grant of summary judgment for Pfizer and remanded. View "In re Pfizer Inc. Securities Litigation" on Justia Law
In re Sanofi Sec. Litig.
Plaintiffs filed suit under federal securities laws and state blue sky laws, alleging that Sanofi made materially false or misleading statements regarding its breakthrough drug, Lemtrada, designed to treat multiple sclerosis. The district court granted defendants' motion to dismiss for failure to state a claim. The court agreed with the district court's reasoning and holding. The court writes principally to examine the impact of the Supreme Court’s decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, decided after the district court rendered its decision. Given the sophistication of the investors here, the FDA’s public preference for double‐blind studies, and the absence of a conflict between defendants’ statements and the FDA’s comments, the court concluded that no reasonable investor would have been misled by defendants’ optimistic statements regarding the approval and launch of Lemtrada. Issuers must be forthright with their investors, but securities law does not impose on them an obligation to disclose every piece of information in their possession. As Omnicare instructs, issuers need not disclose a piece of information merely because it cuts against their projections. Accordingly, the court affirmed the judgment. View "In re Sanofi Sec. Litig." on Justia Law
Pasternack v. Laboratory Corporation
Plaintiff, a physician and airplane pilot, filed suit contending that LabCorp and other drug testing companies, engaged to administer a random drug test in accordance with federal regulations governing aviation safety, mishandled the test. The court reserved decision and certified the following questions to the New York Court of Appeals: whether drug testing regulations and guidelines promulgated by the FAA and DOT create a duty of care for drug testing laboratories and program administrators under New York negligence law; and whether a plaintiff may establish the reliance element of a fraud claim under New York law by showing that a third party relied on a defendantʹs false statements resulting in injury to the plaintiff. View "Pasternack v. Laboratory Corporation" on Justia Law