Federal Court Denies Qui Tam Action Against Medical Device Manufacturer Rejecting Novel Theory that Free Product Support Services Create Liability Under Anti-Kickback Statute

Medical device manufacturers operate in a competitive market. To differentiate themselves from their competitors, manufacturers may offer above-and-beyond customer service. A recent federal qui tam action alleged that too much customer service constitutes an illegal kickback under the federal Anti-Kickback Statute. The court rejected the claim, and its reasoning supplies some comfort and some questions for medical device companies going forward. The federal Anti-Kickback Statute, 42 USC sec. 1320a-7b (AKS), makes it unlawful to knowingly and willfully solicit any remuneration (e.g. bribe, kickback, rebate, etc.) for referrals of services covered by federally funded medical services. What constitutes remuneration often presents the key question in evaluating an AKS claim. A straight payment of money in return for the purchase of a medical device may be a clear violation of the AKS, ...
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Will the Statute of Limitations on Medical Malpractice Actions in New York Be Extended?

For decades, section 214-a of the New York Civil Practice Law & Rules set forth the statute of limitations for medical malpractice actions. Under current law, the statute of limitations for a medical malpractice action expires two and half years after the date of the alleged malpractice. New York is one of only a handful of states without a date of discovery law regarding medical malpractice actions. A date of discovery law tolls the statute of limitations for a medical malpractice claim until the injury should have been discovered. However, this may be changing, at least for New York cancer patients. Last week, proposed legislation to adopt a discovery rule passed in the New York Senate and is on its way to Governor Cuomo. Under the legislation, the statute of ...
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Introduction of CARERS Act Next Step Forward in Medical Marijuana Field

On June 15, 2017, the Compassionate Access, Research Expansion, and Respect States (CARERS) Act of 2017 was re-introduced in the U.S. Senate. It was introduced by Senators Kirsten Gillibrand (New York), Cory Booker (New Jersey), Al Franken (Minnesota), and Rand Paul (Kentucky). It was additionally supported by Republican Senators Lisa Murkowski (Alaska) and Senator Mike Lee (Utah). It was previously introduced in March 2015. The CARERS Act is intended to safeguard patients in states with medical cannabis programs and to expand research opportunities. It would allow for the possession, production, and distribution of medical marijuana in states that have made medical marijuana legal as long as the parties complied with state laws. It would also lift the ban on Veterans Affairs doctors recommending medical marijuana to patients in those states ...
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Pharma Opioid Suits Casting a Wider Net

Under both federal and state law, it is unlawful to advertise if the advertisement tends to mislead or deceive. States have enacted consumer protection laws to enforce and regulate such deceptive practices. In New York, under General Business Law §349, deceptive acts or practices in the conduct of any business, trade, or commerce, or in the furnishing of any service in the state, is declared unlawful. Over the years, the Federal Trade Commission has prosecuted many businesses accused of engaging in false and deceptive advertising. While the FTC has jurisdiction over the prosecution of businesses accused of engaging in false and deceptive advertising, consumers have the right to sue advertisers under state consumer protection laws as well. Consumers have sought to employ this right in a vast number of cases ...
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Developments in Depakote Litigation as Illinois Federal Jury Returns $15 Million Verdict

In the sixth case to go to trial over Depakote, a drug used to treat seizures and bipolar disorder, a federal jury in the Southern District of Illinois returned a $15 million verdict earlier this month. Earlier trials in federal courts in Ohio and Illinois resulted in defense verdicts, but a state jury in Missouri previously awarded $38 million to a group of 25 plaintiffs. This most recent trial addressed the claims of one of the lead plaintiffs in a mass action numbering over 600 individual plaintiffs. The primary claim central to those plaintiffs is the alleged failure to warn that the risks of having a baby born with spina bifida or other malformations was greater than the labeled warning. Following a two week trial, and after deliberating for nearly ...
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Third Circuit Adopts Heightened Materiality Standard under False Claims Act

On May 1, 2017, the Third Circuit issued a decision in United States ex rel. Petratos v. Genentech Inc., 855 F.3d 481 (3d Cir. 2017) narrowing the ability of qui tam relators to show materiality under the False Claims Act (FCA). In essence, the court held that to be material, a misrepresentation or omission by a drug company must relate to the United States’ decision to pay a claim, not a doctor’s decision to prescribe a drug that would lead to a reimbursement claim to the United States. This is, of course, good news for life sciences companies that may be facing FCA claims. An FCA violation occurs when a person submits a knowingly false claim for payment to the United States, such as when a claim is submitted to ...
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New Jersey Supreme Court Makes it Easier for Plaintiffs to Come to New Jersey

New Jersey, largely due to its established multi-county litigation program —which often functions as a “mini” state version of an MDL— has long seen out-of-state plaintiffs choosing to file pharmaceutical product liability claims in New Jersey state courts. Earlier this year, the New Jersey Supreme Court issued a choice-of-law decision that will serve to invite more such forum-shopping in New Jersey. McCarrell v. Hoffman-LaRoche, 227 N.J. 256 (2017) it involved an Alabama plaintiff (McCarrell) who was prescribed Accutane for certain skin conditions. McCarrell’s doctor, his treatment, the prescription, and the alleged illnesses and personal injuries he suffered as a result of the medication, all occurred in Alabama. Accutane was manufactured, packaged, distributed, and marketed in or from New Jersey. Hoffman-LaRoche, the defendant who manufactured Accutane, was also a New Jersey ...
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Third Circuit Affirms Summary Judgment for Pfizer in Zoloft MDL

A Third Circuit Court of Appeals panel recently upheld a lower court’s decision to dismiss plaintiffs’ claims at summary judgment in a multi-district litigation involving Zoloft, an anti-depressant manufactured by Pfizer. The MDL involved 315 plaintiffs alleging that Zoloft causes cardiac birth defects when taken during early pregnancy. The decision, which upheld an earlier ruling by the U.S. District Court for the Eastern District of Pennsylvania, has both good and bad aspects for defendants facing pharmaceutical product liability claims. The plaintiffs introduced several expert witnesses in support of their claim that Zoloft is generally capable of causing cardiac birth defects (general causation). Among those experts was a statistician who utilized the “Bradford Hill” criteria to analyze the existing medical literature regarding the alleged causal link between Zoloft and cardiac birth ...
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Blacklist of “Scientific” Journals to Return

For any television fans that may have stumbled upon this post, it has nothing to do with Raymond Reddington and it will not be as clever as this author’s favorite James Spader character, Alan Shore (from Boston Legal). Nonetheless, as readers of scientific journals we were excited at the announcement this week that the “blacklist” of “scientific” journals is returning, albeit from a new publisher and with a little help from the original. For those that may not have followed Jeffrey Beall’s blog that called out potential predatory journals, you would not have known it was shut down earlier this year. In a world where the number of publishers is growing and the need to obtain content is equaled by the desire of scientific and medical professionals to get published, ...
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Seventh Circuit: Insurer Has Duty to Defend Drug Distributor in “Pill Mill” Lawsuit

This week, a unanimous Seventh Circuit panel found that a major insurance company has a duty to defend H.D. Smith, L.L.C. against a lawsuit brought by the State of West Virginia. The lawsuit claims that the drug distributor helped cause the state’s prescription drug abuse epidemic by knowingly oversupplying painkillers to certain pharmacies and clinics, pejoratively known as “pill mills.” The decision reversed an earlier ruling by the U.S. District Court for the Central District of Illinois. By way of background, in June 2012, the State of West Virginia sued 13 different drug distributors, including H.D. Smith, seeking damages arising from the state’s prescription drug abuse epidemic. The suit sought damages including the costs of providing medical care to drug addicts unable to afford their own health insurance. The complaint ...
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