XARELTO in Philadelphia Court: Will The BMSQ “California Plavix” SCOTUS Ruling Affect Out of State Plaintiffs?

XARELTO in Philadelphia Court of Common Pleas: Will The “California Plavix” Supreme Court Ruling Affect Out of State Plaintiffs?

By Mark A. York

Mass Tort Nexus (September 26, 2017)

 

 

 

 

 

Bayer, which has a headquarters in Pennsylvania, recently used a June 2017 U.S. Supreme Court decision on out of state plaintiffs and court jurisdictions to dismiss dozens of lawsuits from a Missouri federal court in the “Essure” birth control litigation. It remains to be seen if Bayer will use the same strategy in other jurisdictions, like Philadelphia, where the Xarelto blood thinner cases are piling up, see XARELTO Case No. 2349 in Philadelphia Court of Common Pleas Briefcase.

Thousands of out-of-state plaintiffs flocked to Philadelphia recently to file lawsuits over prescription drugs, but a recent U.S. Supreme Court decision might deter that practice in the future, see  June 19, 2017 Bristol-Myers v. Superior Court of California (Plavix Jurisdiction).

The many claimants who have brought their lawsuits in Philadelphia will have to see if pharmaceutical companies like Bayer, Johnson & Johnson and others who are facing many thousands of other claims from out-of-state plaintiffs, will rely on the June 19th U.S. Supreme Court ruling that states an out-of-state plaintiff couldn’t file suit in California, due to a lack of jurisdiction.

The Supreme Court justices ruled 8-1 in favor of Bristol Myers-Squibb after the company argued plaintiffs living outside California who alleged injury from BMS’s blood thinner Plavix, should not be able to sue the company in that state.

The Supreme Court ruled that, essentially the “all inclusive view of personal jurisdiction by non-resident plaintiffs has come to an end.” Plavix was not designed or made in California, and the company is headquartered in New York. The ruling may simply force thousands of pending cases across the country to be refiled in other venues, as plaintiff firms are not likely to simply withdraw the cases as massive losses, without having their day in one court or another.

A non-residents plaintiff can file suit in the Philadelphia County Court of Common Pleas, if the defendant is either incorporated in Pennsylvania, or has a principal place of business in Pennsylvania, which limits the legal options for Bayer, based on their corporate headquarters in the state.

Two of the biggest mass tort programs in the Philadelphia Complex Litigation Center docket are the Risperdal litigation, which is produced by Janssen Pharmaceuticals (a Johnson & Johnson subsidiary) and allegedly causes males to develop breasts, Janssen has been hit with several large multi-million dollar verdicts in Risperdal trials. The other is Xarelto, a blood-thinner made by Bayer and Johnson & Johnson that allegedly causes uncontrolled bleeding events, and the makers failed to warn of the dangers. The Xarelto MDL 2592 in US district Court ED Louisiana . see Xarelto MDL 2592 Mass Tort Nexus Briefcase, where close to twenty thousand additional Xarelto cases are pending.

Bayer will be having a much harder time using the BMS Plavix decision to dismiss non-resident plaintiffs from the Philadelphia courtroom, given it’s headquarters in Pittsburgh, Pennsylvania.

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Boston Scientific Pelvic Mesh Cases Removed From Philadelphia Court of Common Pleas Based on SCOTUS “Plavix” Ruling

Boston Scientific Mass Tort Mesh Cases Removed From Philadelphia Court of Common Pleas Based On Recent Supreme Court  June 2017, Bristol Myers vs. California Superior Court “Plavix” Ruling

 

 

 

 

 

 

Boston Scientific, Marlborough, MA

By Mark A. York (September 7, 2017)

Plaintiffs who filed suit against Boston Scientific in a Philadelphia court over allegedly defective pelvic mesh, have agreed to have their cases removed from the Pennsylvania Court to other venues based on the June 2017 “Bristol-Myers California Plavix” U.S. Supreme Court opinion.  The Plavix ruling has thrown thousands of non-resident drug and medical device state court cases across the country into turmoil, as the non-resident plaintiffs cannot continue their cases in state courts where they do not reside or the defendant companies are not corporate residents.  This was based on the Supreme Court ruling that stated Bristol-Myers R&D and sales activity in the State of California related to it’s Plavix blood thinner, (see Mass Tort Nexus “Plavix” CA State Court Briefcase) was not enough of a corporate presence to subject them to California state court jurisdiction, resulting in jurisdictional issue across the country for plaintiff firms.

Last month, Boston Scientific filed motions asking the court to remove any cases pending against it in the Philadelphia Court of Common Pleas, citing the Supreme Court’s both the “Bristol-Myers Squibb v. Superior Court of California”, see US Supreme Court Strikes Down State Court Jurisdiction and “BNSF Railway v. Tyrrell”, see SCOTUS Limits What State Court A Corporate Defendant Can Be Sued In.

According to one of the lead attorneys, the parties have agreed to litigate the cases in either Massachusetts, where Boston Scientific has its principal place of business, or in Delaware, it’s state of incorporation.

Kline & Specter attorney Shanin Specter said. “An agreement was reached with Boston Scientific to have the cases heard in a courtroom other than the Philadelphia Court of Common Pleas, so the cases can move forward and litigate without the jurisdictional issue creating legal issues. Although Boston Scientific’s motion last month sought to remove 94 cases, Specter said only three cases had been moving forward against Boston Scientific with calls placed to Boston Scientific defense counsel Shook, Hardy & Bacon and attorney Joseph Blum seeking comment have not been returned.

Judge New Asked to Reconsider

Last month, Boston Scientific had filed a motion requesting Philadelphia Court of Common Pleas Judge Arnold New reconsider his March 2015 decision that the state court had jurisdiction over the mesh cases.  New, who is the supervising judge of Philadelphia’s Complex Litigation Center, issued a one-page order saying Boston Scientific’s motion was moot.

As part of the motion, Boston Scientific had sought to have New’s 2015 ruling vacated to allow for additional arguments on the issue, and allowing defense counsel to begin pleading the removal of thousands of other non-resident plaintiff cases currently in in the court’s complex litigation docket.

Ethicon Mesh Motion for Removal

Another major defendant in over one thousand pelvic mesh mass cases , Johnson & Johnson subsidiary Ethicon, has also filed motions recently seeking to have the cases dismissed based the Supreme Court’s recent decisions. Plaintiffs, however, have requested Judge New pend any rulings on these issues, based on the Pennsylvania Superior Court has agreed to consider the matter in a case that is pending before the intermediate court on appeal.

The Supreme Court’s ruling from June 19, 2017 in Bristol-Myers vs. Superior Court of California (see US Supreme Court Denies California State Court Jurisdiction) now seen as the defining game-changing decision, for mass torts in state courts, that has promised to reshape the geography of mass tort litigation across the country. In the ruling, a majority of the Supreme Court determined that plaintiffs suing Bristol-Myers Squibb in California who were not California residents had failed to establish specific jurisdiction over the pharmaceutical giant, since there was no significant link between the claims and Bristol-Myers’ conduct in California. The ruling, according to observers, makes clear that out-of-state plaintiffs can’t sue companies in states where the defendants aren’t considered to be “at home,” or haven’t conducted business directly linked to the claimed injury.

Johnson & Johnson Files For Missouri Removals

Earlier this month, J&J filed a motion in Missouri seeking to dismiss more than 1,300 lawsuits against it over talcum powder, claiming the lawyers had engaged in “blatant forum shopping on a grand scale.” On June 19, 2017 St Louis City Court Judge Rex Burlison declared a mistrial in the fifth talcum powder cancer trial being heard there, which was the afternoon of the SCOTUS “Plavix” ruling, declaring that the opinion earlier that day prevented the trial from moving forward. The trial was reset for October 2017, and the parties are currently arguing the jurisdictional issues of resuming the trial in front of Judge Burlison, see Mistrial Declared in J&J Talc Trial Due to SCOTUS Ruling.

Boston Scientific Argument

In requesting reconsideration regarding the recent Supreme Court decisions, Boston Scientific contends that Pennsylvania state courts no longer have jurisdiction over it. Specifically, the motion said Boston Scientific is a Delaware corporation with its principal place of business in Massachusetts, it does not have sufficient ties to Pennsylvania to render it “at home” in the state, and the plaintiffs are not Pennsylvania residents. The company further says that finding Pennsylvania has jurisdiction simply because the company complies with the state’s business registration statute violates the due process clause of the U.S. Constitution and the now precedent “California Plavix” decision, .

“It is undisputed that Boston Scientific’s principal place of business is Massachusetts while its place of incorporation is Delaware,” the motion said. “Those are the only two jurisdictions where Boston Scientific is so heavily engaged in activity as to render it ‘at home.”

State Court Removal and Refiling Across The Country

The Philadelphia Court of Common Please Complex Litigation Docket appears to be preparing for a departure of many of the thousands of product liability cases, which prior to June 19, 2017 were moving along quite well in the under the direction of Judge Arnold New. State court dockets across the country are now forced to consider the removal of many cases as well as the potential refiling of thousands of cases in the state of incorporation for the medical device and pharmaceutical manufacturers.

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SCOTUS Bristol-Myers “California-Plavix” Ruling Causes Instant Mistrial in Missouri State Court J&J Talc Trial, But Judge Resets Trial For October 16, 2017

SCOTUS Bristol-Myers “California-Plavix” Ruling Causes Instant Mistrial in Missouri State Court J&J Talc Trial, But Judge Resets Trial For October 16, 2017

July 19, 2017 By Mark York

Is Missouri State Court Still a “J&J Loses Again Venue” or Will the California-Plavix Ruling Change Things?

On June 19, 2017 lawyers in a St. Louis courtroom trial, Estate of Shawn Blaes, et al vs. Johnson & Johnson Case No. 1422-CC09326-01 over Johnson & Johnson’s talcum powder,  were receiving notice of an earlier US Supreme Court decision and were changing trial strategy instantly, scrambling to determine if the Supreme Court decision handed down that morning doomed their case. The ruling was from a California multi-plaintiff drug case, Bristol Myers-Plavix Litigation JCCP Case No. 4748 (San Francisco County Superior Court) where Bristol-Myers had appealed the August 29, 2016 California Supreme Court decision, when the court ruled that “foreign resident plaintiffs were able to remain parties to the Plavix litigation in California State Court” see California Court Opinion Jurisdiction of Non-Resident Plavix Plaintiffs 8.29.2016. Bristol-Myers immediately appealed to the US Supreme Court, where appeal arguments were heard on April 24, 2017 see BMSQ California Plavix SCOTUS Appeal Transcript , which left non-resident plaintiffs in state court cases across the country in limbo, pending the ruling.  On June 19th the 8-1 ruling clarified the non-resident question for many plaintiffs, including the three plaintiffs in the pending trial in front of Judge Rex Burlison, who immediately declared a mistrial, but prior to his ruling the trial attorneys were scrambling to get correct information.

One attorney was still downloading the opinion to his computer as another told the judge “I’m on my cellphone right now trying to learn facts,” according to the trial transcript, Shawn Blaes v. J&J June 19th Trial Transcript of the hearing. Defense counsel aggressively asserted to Judge Burlison that the Supreme Court decision in Bristol-Myers Squibb Co. v. Superior Court, June 19, 2017 California-Plavix SCOTUS Opinion which limited where defendants could be sued, was directly applicable to the case and had disrupted matters so thoroughly that he had to declare a mistrial.

But plaintiffs lawyers had a surprise: A company called “Pharma Tech Industries” was involved, and when W. Wylie Blair of Onder, Shelton, O’Leary & Peterson, was asked to address Bristol-Myers, he introduced the judge to Pharma Tech, a company that was “doing the packaging, labeling and distributing of talc-based body powders right here in Union, Missouri.”

“Roll that again,” Burlison interrupted. “Pharma Tech Industries was doing what?”

Plaintiffs counsel Blair went on to tell him about letters, forms, emails, monthly checks and sales documents showing Pharma Tech’s plant in Missouri had bought raw talc from Imerys Talc America Inc., another defendant in the case, which alleged Johnson & Johnson’s talcum powder caused three women to die from ovarian cancer. Pharma Tech then made products for Johnson & Johnson, and originally the talc products by Pharma Tech had a cancer warning on it, but Pharma Tech, at J&J’s direction, removed it when manufacturing, bottling and labeling its products.

Though intrigued, Burlison decided not to proceed with the trial, as two of the three plaintiffs hadn’t lived in Missouri.  The judge granted Johnson & Johnson’s motion for a mistrial. Going forward, he said, would be like “trying to master a square into a round hole.”

“We do have allegations in this case that would constitute what the Bristol-Myers court refers to as relevant acts, however, we don’t — we do not have pleadings sufficient to anchor those relevant acts to a third party, that being the Pharma Tech Industries here in Missouri,” Burlison said.

The judge has reset the case for trial on Oct. 16, 2017 and permitted plaintiffs attorneys to move forward on discovery over Pharma Tech, a family-owned manufacturer of pharmaceutical powders based in Athens, Georgia. Founded in 1972, Pharma Tech has been run by the same family since 1989, which has a plant in Union, Missouri that provides talc products to Johnson& Johnson.

The Pharma Tech evidence could prove essential to the claims of more than 1,360 other plaintiffs who have cases pending in Missouri, where juries have awarded verdicts of more than $300 million. Pharma Tech has come up in plaintiffs’ motions this month to remand 20 cases back to Missouri. Johnson & Johnson removed them to federal court under Bristol-Myers just before the scheduled depositions and subpoenas on the Pharma Tech evidence. Plaintiffs’ attorneys also want the Missouri Court of Appeals to let them to add the Pharma Tech evidence to a pending appeals of the prior Missouri court verdicts.

Johnson & Johnson declined to comment on the ruling, while co-defendant, Imerys declared:

“None of the cases tried to date have alleged any conduct by Imerys in Missouri, and the vast majority of cases filed against us in St. Louis are by plaintiffs who similarly have no connection to St. Louis or Missouri,” said Imerys spokeswoman Gwen Myers. “We will look to overturn those cases that were already improperly tried in this jurisdiction and will seek to apply this ruling to those that are still pending.”

The defense bar has been emboldened by Bristol-Myers in which the Supreme Court ruled non-resident plaintiffs who sued Bristol-Myers in California had failed to establish specific jurisdiction because there wasn’t enough of a link between their claims and California, where they brought their “mass action.” Most of the 600 plaintiffs didn’t live in California, and Bristol-Myers is based in New York. The court also found that a California distributor, McKesson Corp., didn’t have enough connection to the claims.

 

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U.S. Supreme Court Strikes Down California Ruling in Bristol-Myers’ Plavix Case

Plavix bleeding side effects

The US Supreme Court ruled today that California courts lack specific jurisdiction to entertain the nonresidents’ claims against Bristol-Myers that Plavix damaged their health.

The Court ruled that:

(a) The personal jurisdiction of state courts is “subject to review for compatibility with the Fourteenth Amendment’s Due Process Clause.” Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U. S. 915, 918. This Court’s decisions have recognized two types of personal jurisdiction: general and specific. For general jurisdiction, the “paradigm forum” is an “individual’s domicile,” or, for corporations, “an equivalent place, one in which the corporation is fairly regarded as at home.” Specific jurisdiction, however, requires “the suit” to “aris[e] out of or relat[e] to the defendant’s contacts with the forum.”

The “primary concern” in assessing personal jurisdiction is “the burden on the defendant.” World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286, 292. Assessing this burden obviously requires a court to consider the practical problems resulting from litigating in the forum, but it also encompasses the more abstract matter of submitting to the coercive power of a State that may have little legitimate interest in the claims in question. At times, “the Due Process Clause, acting as an instrument of interstate federalism, may . . . divest the State of its power to render a valid judgment.”

(b) Settled principles of specific jurisdiction control this case. For a court to exercise specific jurisdiction over a claim there must be an “affiliation between the forum and the underlying controversy, principally [an] activity or an occurrence that takes place in the forum State.” When no such connection exists, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State. The California Supreme Court’s “sliding scale approach”—which resembles a loose and spurious form of general jurisdiction—is thus difficult to square with this Court’s precedents. That court found specific jurisdiction without identifying any adequate link between the State and the nonresidents’ claims. The mere fact that other plaintiffs were prescribed, obtained, and ingested Plavix in California does not allow the State to assert specific jurisdiction over the nonresidents’ claims. Nor is it sufficient (or relevant) that BMS conducted research in California on matters unrelated to Plavix. What is needed is a connection between the forum and the specific claims at issue.

(c) The nonresident plaintiffs’ reliance on Keeton v. Hustler Magazine, Inc., 465 U. S. 770, and Phillips Petroleum Co. v. Shutts, 472 U. S. 797, is misplaced. Keeton concerned jurisdiction to determine the scope of a claim involving in-state injury and injury to residents of the State, not, as here, jurisdiction to entertain claims involving no in-state injury and no injury to residents of the forum State. And Shutts, which concerned the due process rights of plaintiffs, has no bearing on the question presented here.

(d) BMS’s decision to contract with McKesson, a California company, to distribute Plavix nationally does not provide a sufficient basis for personal jurisdiction. It is not alleged that BMS engaged in relevant acts together with McKesson in California or that BMS is derivatively liable for McKesson’s conduct in California. The bare fact that BMS contracted with a California distributor is not enough to establish personal jurisdiction in the State.

(e) The Court’s decision will not result in the parade of horribles that respondents conjure up. It does not prevent the California and out-of-state plaintiffs from joining together in a consolidated action in the States that have general jurisdiction over BMS. Alternatively, the nonresident plaintiffs could probably sue together in their respective home States. In addition, since this decision concerns the due process limits on the exercise of specific jurisdiction by a State, the question remains open whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.

 272 plaintiffs sue

A group of plaintiffs, most of whom are not California residents, sued Bristol-Myers Squibb Company (BMS) in California state court, alleging that the pharmaceutical company’s drug Plavix had damaged their health.

BMS is incorporated in Delaware and headquartered in New York, and it maintains substantial operations in both New York and New Jersey. Although it engages in business activities in California and sells Plavix there, BMS did not develop, create a marketing strategy for, manufacture, label, package, or work on the regulatory approval for Plavix in the State. And the nonresident plaintiffs did not allege that they obtained Plavix from a California source, that they were injured by Plavix in California, or that they were treated for their injuries in California.

The California Superior Court denied BMS’s motion to quash service of summons on the nonresidents’ claims for lack of personal jurisdiction, concluding that BMS’s extensive activities in the State gave the California courts general jurisdiction. Following this Court’s decision in Daimler AG v. Bauman, 571 U. S. ___, the State Court of Appeal found that the California courts lacked general jurisdiction.

But the Court of Appeal went on to find that the California courts had specific jurisdiction over the claims brought by the nonresident plaintiffs. Affirming, the State Supreme Court applied a “sliding
scale approach” to specific jurisdiction, concluding that BMS’s “wide ranging” contacts with the State were enough to support a finding of specific jurisdiction over the claims brought by the nonresident plaintiffs. That attenuated connection was met, the court held, in part because the nonresidents’ claims were similar in many ways to the California residents’ claims and because BMS engaged in other activities in the State.

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Corporate Defendants Win in Supreme Court Ruling on Jurisdiction for Out-of-State Plaintiffs

Reversing the Montana Supreme Court, the US Supreme Court decided BNSF Railway Co. v. Tyrrell, No. 16-405, on May 30, 2017, holding that a state court cannot assert jurisdiction over claims made by nonresident plaintiffs who were injured while working outside the state.

The US Supreme Court sided with defendant BNSF Railway Co., saying that such lawsuits must be filed in the state where the employee is “at home” — where it is incorporated or headquartered.

The justices ruled that §56 of the Federal Employers’ Liability Act (FELA) does not address personal jurisdiction and thus limiting the courts in which a railroad is subject to suit.

Daimler ruling applies

Importantly, the Court ruled that state courts must follow its 2014 ruling in Daimler AG v. Bauman, 134 S. Ct. 746, that the due process clause forbids a state court from exercising general personal jurisdiction. This broad interpretation affects another appeal filed by Bristol-Meyers Squibb, which desperately wants the US Supreme Court to reverse the California Supreme Court court, and to apply the Daimler rulingwhich states may take “general jurisdiction” only over companies that are “at home” in the state.

“Daimler involved no FELA claim or railroad defendant, but the due process constraint described there applies to all state-court assertions of general jurisdiction over nonresident defendants; that constraint does not vary with the type of claim asserted or business enterprise sued. Here, BNSF is not incorporated or headquartered in Montana and its activity there is not ‘so substantial and of such a nature as to render the corporation at home in that State,’” the Court ruled. (Emphasis added.)

Whether a court can take personal jurisdiction is a frequent legal issue in mass tort litigation. See GSK Asks Supreme Court to Let it Wriggle Out of Jurisdiction in Paxil Birth Defect Case and
US Supreme Court to Rule on California State Jurisdiction Over Plavix Litigation

Under FELA, railroads are liable to employees for injuries they suffer on the job. In this case, plaintiffs who lived outside Montana and had suffered injuries outside Montana sued BNSF Railway Company in Montana under FELA. BNSF did business in Montana but was incorporated and had its principal place of business elsewhere.

Because the railroad has 2,000 miles of track and more than 2,000 employees in the state, the Montana Supreme Court upheld personal jurisdiction over BNSF under FELA §56, which states that a cause of action may be brought in a district “in which the defendant shall be doing business at the time of commencing such action” and further provides that the jurisdiction of the federal courts is concurrent with that of the state courts.

Principles of personal jurisdiction

The Supreme Court held that §56 does not address personal jurisdiction but rather is a venue provision that also clarifies that state courts have subject matter jurisdiction over FELA claims. Therefore, Section 56 alone did not establish a basis to summon BNSF into court in Montana.

Turning to ordinary principles of personal jurisdiction, the Court reasserted the holdings in Daimler AG v. Bauman, and Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011), that courts may assert general jurisdiction over corporations only when they are essentially “at home” in the forum state.

Rejecting the Montana Supreme Court’s suggestion that Daimler was distinguishable from this case involving a FELA claim against a railroad, the Court emphasized that “[t]he Fourteenth Amendment due process constraint described in Daimler . . . applies to all state-court assertions of general jurisdiction over nonresident defendants; the constraint does not vary with the type of claim asserted or business enterprise sued.”

Because BNSF was not incorporated in Montana and did not maintain its principal place of business there, it was not subject to general personal jurisdiction in Montana. The Court said BNSF’s presence and activities in Montana do not support personal jurisdiction for unrelated claims like those of the plaintiffs, which had “no relationship to anything that occurred or had its principal impact in Montana.”

Justice Ginsburg delivered the opinion of the Court, joined by Chief Justice Roberts and Justices Kennedy, Thomas, Breyer, Alito, Kagan, and Gorsuch. Justice Sotomayor filed an opinion concurring in part and dissenting in part.

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What Trump and the New Commissioner mean for the FDA

Trump FDA deregulation
President Trump claims that 75% to 80% of all governmental regulations are unnecessary.

By Joseph DiNardo, Esq. and Erin Delaney, Esq.

There is much uncertainty throughout the pharmaceutical industry as a new U.S. Food and Drug Administration (FDA) Commissioner is chosen and steps are taken to deregulate government agencies.

President Donald Trump has stated one of his goals is to speed up the drug approval process to lower drug prices, promote competition, benefit small start-ups and bring innovative new treatments to market faster.

However, many industry leaders are concerned that dramatically speeding up the current approval process could put patients at risk. This, in turn, could subject manufacturers to costly litigations.

CEO of Pfizer favors deregulation

The high cost of obtaining approval for a new drug, estimated at $2.6 billion, has been blamed for hindering pharmaceutical start-ups from entering the market. As a result, certain pharmaceutical executives, like the CEO of Pfizer Inc., have publicly favored deregulation, claiming it will help create more competition and lower drug prices.

Others in the pharmaceutical industry disagree, opining that current FDA rules and regulations provide a level playing field for both small and large companies. Lowering the bar for drug approvals, they contend, would allow the wealthiest pharmaceutical companies to inundate the market with countless new drugs and associated advertising, eclipsing any potential advances of smaller companies.

President Trump, who has stated that 75% to 80% of all governmental regulations are unnecessary, issued an executive order on January 30, 2017, aimed at significantly reducing them. The order requires all executive government agencies identify at least two regulations to be repealed for each newly-proposed regulation.

There are 40 MDLS where plaintiffs allege the drug companies engaged in false and misleading marketing and sales practices, including Vioxx, Tylenol, Celexa, Lipitor, Avandia and Plavix.

FDA may not be affected

While not immune to the executive order, the FDA, which regulates food, drugs, medical devices, blood donations, vaccines, biologic products, animal and veterinary products, cosmetics and tobacco products, may not be markedly affected by it. Many FDA regulations deal with process and merely codify or interpret the law. Accordingly, even if certain agency regulations were repealed, congressional mandates, including statutory safety and efficacy standards under the Food, Drug and Cosmetic Act (FDCA), would not change.

Further, a number of regulations are no longer applicable and could be repealed without consequence. Arguably, some existing regulations could even increase protection and transparency for the public if rescinded.

It is not the executive order that has the industry buzzing, however, but rather the potential actions of the new FDA commissioner under the Trump administration, who is likely to share the President’s goal of streamlining the FDA’s drug approval process to decrease the amount of time it takes for new drugs and medical devices to get to market. In an attempt to restructure and quicken the process, the commissioner may choose to institute various levels of approvals, focusing on biomarkers and short-term surrogate endpoints.

Although legislation is in place that requires substantial evidence of a drug’s efficacy prior to it being sold in the marketplace, some suggest if the new commissioner were so inclined, the commissioner need only to interpret existing regulations loosely to weaken the efficacy standard.

12 years from lab to patient

Under the current system, it takes a new drug, on average, 12 years to make it from a research lab to the patient. The FDA’s role is minimal throughout the preclinical research stage, which can take one to six years, but increases if the drug is successful and the FDA approves the commencement of human trials.

Phase one allows researchers to test the drug for the first time in a small group of healthy volunteers, identifying side effects and basic product characteristics, adjusting dosages and evaluating safety. Phase two involves evaluating

Phase two involves evaluating efficacy and short-term side effects for different dosages within a larger randomized or controlled group of people, often measuring biomarkers or laboratory results rather than clinical outcomes. Phase three, a large clinical trial, uses a group of people more similar to those to whom the product would be marketed to determine a risk/benefit ratio. Each phase takes about one to two-and-a-half years.

Ninety percent of the drugs and biologics that proceed through clinical trials fail, whether it’s due to safety or efficacy. If a drug completes phase three of the trials, the manufacturer will file a New Drug Application with the FDA, getting a response, on average, in about 12 months for standard review and eight months for priority review.

Nevertheless, according to 2016 data, the majority of new drugs are approved through an expedited approval process. The approval process has also already been shortened for certain drugs and medical devices by the 21st Century Cures Act, which was signed by President Barack Obama last year.

Safety and efficacy

Some experts argue that safety and efficacy go hand-in-hand; side effects that would never be approved for an over-the-counter drug may be approved for a drug that treats a life-threatening illness if it were proven to be an effective treatment. The type, nature, length and size of clinical trials are already becoming increasingly flexible, allowing deviations from the typical structure on a case-by-case basis in consideration of factors such as whether the condition is widespread, rare, chronic, short-term or life-threatening, the frequency of the symptoms, and the toxicity of the drug on test subjects.

For instance, the FDA may approve orphan drugs, which treat diseases that typically affect less than 200,000 people, based on only one positive clinical trial and/or on surrogate endpoints, while mass-market drugs typically require two to three trials to prove safety and efficacy. In doing so, the FDA provides patients access to a drug, often where there was a previously unmet medical need, while the company continues to study its clinical benefits.

Even so, the FDA maintains that “a randomized, controlled, clinical trial… of a size and duration that reflect the product and target condition remains the gold standard for determining whether there is an acceptable benefit/ risk profile for drugs and biologics.” A neurologist at the Mayo Clinic told Business Insider he commends the idea of speeding up the development of new treatments, but worries that in doing so patients could be exposed to “costly, ineffective and potentially dangerous drugs.” Likewise, the CEO of Ovid Therapeutics Inc., a pharmaceutical company that develops drugs for rare diseases, told Reuters, “any change at the FDA that allows drugs to be tried out on patients without clinical evidence is a damaging approach.”

In a January 2017 FDA evaluation of 22 case studies with divergent results, early clinical studies were promising. Should the commissioner decide to base approval on initial safety reports or on surrogate endpoints, these drugs could have been approved. However, “[p]hase 3 studies did not confirm phase 2 findings of effectiveness in 14 cases, safety in 1 case, and both safety and effectiveness in 7 cases… In two cases, the phase 3 studies showed that the experimental product increased the frequency of the problem it intended to prevent.” The side effects of these drugs in phase three trials ranged from mere uselessness to serious adverse events, including death.

Testing requirement

Further, removing the requirement of extensive clinical testing could mean that courts will see more lawsuits and multidistrict litigations similar to those currently filed against 3M involving its Bair Hugger Forced Air Warming device. In that litigation, it is alleged that the company knew of the threat of contaminants due to the device, and the risk of infection, but failed to warn of the risk. The plaintiffs further allege that 3M continued to market its product as safe for use during surgeries and attempted to “conceal and discredit peer-reviewed scientific studies that undermined their ability to market the Bair Hugger.” Notably, the FDA approved the Bair Hugger device for use in 1987 under Section 510(k) of the FDCA, which is an expedited process that allows for less clinical testing if a substantially similar device is already on the market.

It is also unclear how rules and regulations that promote a quicker approval process will affect the doctrine of federal preemption. Just like Bayer Corp. has done with some success in suits alleging injuries sustained from the implantation of Essure Permanent Birth Control, a manufacturer’s defense often rests on the fact that the FDA approved the drug or device’s design, manufacturing method, labels, warnings and instructions for use prior to its release into the market.

This defense has held up in the past, especially for devices approved in the premarket approval process, based on the FDCA’s statutory requirements for safety and effectiveness, with defendants arguing the FDA subjected their product to the “highest level of scrutiny that exists in the federal regulatory system.” If the statutory requirements for a new drug’s approval are weakened, this defense may prove futile for pharmaceutical companies in future litigations to the advantage of plaintiffs.

40 MDLs

Congruently, there are currently 40 multidistrict litigations pending with the Judicial Panel on Multidistrict Litigation in which plaintiffs allege the defendants engaged in false and misleading marketing and sales practices, including those for Vioxx, Tylenol, Celexa, Lipitor, Avandia and Plavix, to name a few. Allowing a pharmaceutical company to advertise a drug for potentially ineffective uses without proper testing could open the floodgates of similar litigation should the drug fail to work, or worse, cause fatalities, while costing patients hundreds of thousands of dollars per year. For example, Sarepta Therapeutic’s orphan drug, Exondys 51, which the FDA approved for use in September 2016 based on surrogate endpoints, runs patients about $300,000 per year with little to no insurance coverage, but it has not yet been proven effective.

Industry heads such as the CEO of Alnylam Pharma and the head of research and development at Merck and Co Inc. have also expressed concern about how a manufacturer must be able to show insurers and physicians alike through a risk/benefit profile that their drug has value, rather than leaving them to make such a determination on their own. Further, even if deregulation lowers costs to pharmaceutical companies, there have been no assurances that these reduced costs will be passed on to patients. A first-to-market advantage will not do pharmaceutical companies much good if the product is too expensive for patients to afford and insurance companies are not willing to cover the cost.

If current pre-market clinical requirements are reduced, it could arguably endanger patients, who are often the most vulnerable. It may also make it more difficult for pharmaceutical companies to differentiate effective products from new, less effective — or ineffective — treatments flooding an easy-to-enter market. On the other hand, greater flexibility could allow for innovative new products to enter the market faster and reach those waiting on new therapies or a cure. Until the right balance has been struck, the industry may be in for a bumpy, litigation-filled ride.

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US Supreme Court to Rule on California State Jurisdiction Over Plavix Litigation

Plavix bleeding side effectsThrowing a lifeline to Bristol-Myers as it tries to wriggle out of mass tort claims against its Plavix blood-thinner in California, the US Supreme Court agreed to review the state supreme court’s ruling taking jurisdiction over out-of-state plaintiffs.

In September the California Supreme Court ruled that its state courts can take “specific jurisdiction” over mass tort claims by out-of-state plaintiffs against Bristol-Myers Squibb (BMS) arising from the company’s national marketing and sales campaigns. Bristol-Myers Squibb Company v. Bracy Anderson, S221038, Super. Ct. JCCP No. 4748 (Sept. 29, 2016).

Bristol-Meyers Squibb (BMS) desperately wants the US Supreme Court to reverse the state court, and to apply a 2014 US Supreme Court ruling Daimler AG v. Bauman, 134 S. Ct. 746, that states may take “general jurisdiction” only over companies that are “at home” in the state. However, that case involved a California product-defect suit involving a German-manufactured vehicle that overturned in Poland and injured a Polish driver and passenger.

In contrast, BMS has 400 employees in California, has a registered agent for service of process and marketed and sold more than 180 million Plavix pills to distributors in California alone, generating sales revenue of $1 billion from 2006-2012.

The Trump factor

“Chief Justice Roberts has leaned left in high-profile rulings and away from his original conservative view the last two years and kept things in line,” said Mark A. York, Senior Consultant for Mass Tort Nexus. “Roberts may continue that path and it will be a 5 -3 ruling for the plaintiffs. But even if he goes right and there’s a 4-4 split, if it’s prior to Trump’s pick for a new Justice, the California court ruling stands, and BMS is out until the next chance comes in another case.”

“This may be a moral compass decision for Roberts at this point and a view down the road of what’s coming even if there is a conservative Trump appointee. If Trump successfully appoints a Justice who pulls the straight conservative line and Roberts goes right, then non-resident Plavix cases are done in California. But there will probably be a clarification of the original Daimler ruling as to how it applies to all parties who are US entities. If Roberts stays left on this, then non-resident cases will be able to proceed in state courts. But if he leans right, then the state court MDLs are up in the air,” York added. “I also noticed that there are several Amici filings supporting Bristol Myers including the US Chamber of Commerce, which shows that BMS is using leverage from outside the pharma-medical industry for support.”

At issue are eight complaints alleging identical facts filed in San Francisco in March 2013 by 86 Californians, and 592 residents of 33 other states. The resident plaintiffs allege the same acts by BMS in the state as the non-residents do, and BMY admits that it is subject to specific personal jurisdiction with respect to the claims of California plaintiffs.

“All the plaintiff’s claims arise out of BMS’s nationwide marketing and distribution of Plavix” that took place in California, says the brief in opposition by Thomas C. Goldstein and Charles H. David of Goldstein & Russell PC in Bethesda, MD.

Mass actions are different

While BMS marketed Plavix as safer than aspirin, it caused the plaintiffs to have heart attacks, strokes, internal bleeding, blood disorders or death.

“Mass actions are fundamentally different from traditional litigation, raising distinct questions about fairness to the litigants and to the states themselves. This is particularly true of mass actions where – as in this case – the non-resident defendant is indisputably subject to the personal jurisdiction of the forum’s courts for some plaintiffs; all the plaintiffs bring essentially identical claims; and the non-resident defendant will inevitably be a party to the litigation of the claims of the non-residents,” the plaintiffs argue.

“In such a case, there is no inherent unfairness to the non-resident defendant, and the nation’s judicial systems operate far more efficiently by adjudicating the indistinguishable claims together.”

The question presented is whether the Constitution immunizes BMS from the personal jurisdiction of the state courts regarding the claims of non-resident plaintiffs arising from the identical factual allegations of resident plaintiffs.

BMS attempts to manufacture a conflict in the courts that must be resolved.

  1. But for Cause. The Fourth, Ninth and Tenth Circuits and the highest courts in Arizona, Massachusetts and Washington arguably conclude that a plaintiff cannot establish personal jurisdiction over a defendant unless he shows that he would not have suffered an injury but for the defendant’s forum-related conduct.
  2. Proximate Cause or Foreseeability. The First, Third, Sixth, Seventh and Eleventh Circuits, as well as the Oregon supreme Court, have not settled on a precise standard, but arguably say that a plaintiff’s injuries must be proximately caused by the defendant’s forum-state contacts.
  3. No Causal Connection. The California, Texas, District of Columbia supreme courts and the Federal District found jurisdiction — paraphrasing here — where there is a substantial nexus or connection between the defendant’s forum activities and the plaintiff’s claim.

Three-part test

But the California court held it did have specific jurisdiction based on a three-part test:

  1. Whether the defendant has purposefully directed its activities at the forum state.
  2. Whether the plaintiffs’ claims arise out of or are related to these forum-directed activities.
  3. Whether the exercise of jurisdiction is reasonable and does not offend traditional notions of fair play and substantial justice.

Satisfying test 1, “BMS purposefully availed itself of the benefits of California” by marketing and advertising Plavix in California, selling 187 million Plavix pills in California from 2006-2012 resulting in sales revenue of $918 million, employing 250 sales representatives in California, contracting with McKesson, based in San Francisco, to be its pharmaceutical distributor, operating research and laboratory facilities in California, and even having an office in the state capital to lobby the state.

Satisfying test 2, BMS had extensive activities in California, including by marketing and promoting Plavix in the state, conducting research and development in California and targeting California as part of a nationwide campaign. “Because of the defendants‘ relationship with the forum, it is not unfair to require that they answer in a California court for an alleged injury that is substantially connected to the defendants’ forum contacts,” the court ruled.

Satisfying test 3, BMS had adequate notice that it was subject to suit in California. “BMS embraced this risk by coordinating a single nationwide marketing and distribution effort and by engaging in research and development in California. In that regard, BMS was on notice that it could be sued in California by nonresident plaintiffs. In fact, our courts have frequently handled nationwide class actions involving numerous nonresident plaintiffs.”

No date has been set for oral argument yet.

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Plaintiffs Resist Move to Oust Non-Residents in California Plavix Cases

Plavix bleeding side effectsPlaintiffs in California litigation over deadly side effects of the anti-clotting drug Plavix called on the US Supreme Court to uphold a ruling that 592 out-of-state residents can remain as plaintiffs.

In September the California Supreme Court ruled that its state courts can take “specific jurisdiction” over mass tort claims by out-of-state plaintiffs against Bristol-Myers Squibb arising from its national marketing sales and marketing campaigns. Bristol-Myers Squibb Company v. Bracy Anderson, S221038, Super. Ct. JCCP No. 4748 (Sept. 29, 2016).

The plaintiffs, including 86 Californians, allege that the drug caused bleeding, bleeding ulcers, gastrointestinal bleeding, cerebral bleeding, rectal bleeding, heart attack, stroke, hemorrhagic stroke, subdural hematoma, thrombotic thrombocytopenic purpura, and 18 deaths. They charge that the Bristol-Myers (BMS) engaged in negligent and wrongful conduct in the design, development, manufacture, testing, packaging, promoting, marketing, distribution, labeling and sale of Plavix.

Separately, 261 Plavix lawsuits are pending in multidistrict litigation (MDL) before U.S. District Judge Freda L. Wolfson in the District of New Jersey. The United States Judicial Panel on Multidistrict Litigation created the MDL on December 8, 2015.

Not merely similar

“The claims of both the residents and non-resident plaintiffs were not based on merely ‘similar’ conduct, but the exact same singular and coordinated marketing and distribution scheme,” the Plavix Brief in Opposition states in Bristol-Myers Squibb v. Superior Court of California, No. 16-466, US Supreme Court.

From 2006-2012 BMS marketed distributed, and sold over 180 million Plavix pills to distributors and wholesalers in California alone, generating sales revenue of nearly $l billion. Although BMS marketed Plavix as “providing greater cardiovascular benefits, while being safer and easier on a person’s stomach than aspirin,” the reality was that the drug created a substantial risk of “heart attack, stroke, internal bleeding, blood disorders or death.”

The brief argues against “cleaving off one subset liability to one subset of the plaintiffs, who would be required to relitigate all the questions once again in their home states.” It adds, “all the plaintiffs’ arise out of BMS’s nationwide marketing and of Plavix.”

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California Supreme Court Takes Jurisdiction of Plavix Mass Tort Claims

Plavix bleeding side effectsThe California Supreme Court ruled that state courts can take “specific jurisdiction” over mass tort claims by out-of-state plaintiffs against Bristol-Myers Squibb because of the company’s in-state marketing campaigns, sales and research.

It distinguished a 2014 US Supreme Court ruling Daimler AG v. Bauman that states may take “general jurisdiction” only over companies that are “at home” in the state.

The ruling allows claims to proceed in Bristol-Myers Squibb Company v. Bracy Anderson, S221038, Super. Ct. JCCP No. 4748 (Sept. 29, 2016). It clears the way for lawsuits by 86 Californians and 592 plaintiffs from 33 other states against Plavix, a drug used to inhibit blood clotting, to be tried together in California.

The plaintiffs allege that the drug caused bleeding, bleeding ulcers, gastrointestinal bleeding, cerebral bleeding, rectal bleeding, heart attack, stroke, hemorrhagic stroke, subdural hematoma, thrombotic thrombocytopenic purpura, and 18 deaths. They charge that the Bristol-Myers engaged in negligent and wrongful conduct in the design, development, manufacture, testing, packaging, promoting, marketing, distribution, labeling, and sale of Plavix.

According to the complaints, the defendants promoted the drug to consumers and physicians by falsely representing that it provided greater cardiovascular benefits, while being safer and easier on a person‘s stomach than aspirin, but defendants knew those claims were untrue.

Separately, 261 Plavix lawsuits are pending in multidistrict litigation (MDL) before U.S. District Judge Freda L. Wolfson in the District of New Jersey. The United States Judicial Panel on Multidistrict Litigation created the MDL on December 8, 2015.

General jurisdiction

The 74-page opinion upheld rulings in two lower courts and focused on the difference between “general jurisdiction” and “specific jurisdiction.”

United States Supreme Court ruled in Daimler AG v. Bauman 571 U.S. ___ (2014), on the limits of general jurisdiction involving out-of-state defendants and plaintiffs. General jurisdiction requires that a defendant must be “at home” in a state — by being incorporated and having its principal place of business in a state. “The corporation‘s activities must be so continuous and systematic as to render [it] essentially at home in the forum State,” the US Supreme Court held.

Daimler held that California courts did not have general jurisdiction over Argentinian plaintiffs suing DaimlerChrsyler, a German company, over a dispute in Argentina.

In the Plavix case, Bristol-Myers (BMS) argued it was incorporated in Delaware, headquartered in New York City, and maintained operations in New Jersey. The California high court agreed that it did not have general jurisdiction over the company, even though it was registered to do business and California and has an agent for service of process.

Specific jurisdiction

But the California court went on saying it did have specific jurisdiction based on a three-part test:

  1. Whether the defendant has purposefully directed its activities at the forum state.
  2. Whether the plaintiffs’ claims arise out of or are related to these forum-directed activities.
  3. Whether the exercise of jurisdiction is reasonable and does not offend traditional notions of fair play and substantial justice.

Satisfying test 1, “BMS purposefully availed itself of the benefits of California” by marketing and advertising Plavix in California, selling 187 million Plavix pills in California from 2006-2012 resulting in sales revenue of $918 million, employing 250 sales representatives in California, contracting with McKesson, based in San Francisco, to be its pharmaceutical distributor, operating research and laboratory facilities in California, and even having an office in the state capital to lobby the state.

Satisfying test 2, BMS had extensive activities in California, including by marketing and promoting Plavix in the state, conducting research and development in California and targeting California as part of a nationwide campaign. “Because of the defendants‘ relationship with the forum, it is not unfair to require that they answer in a California court for an alleged injury that is substantially connected to the defendants’ forum contacts,” the court ruled.

Satisfying test 3, BMS had adequate notice that it was subject to suit in California. “BMS embraced this risk by coordinating a single nationwide marketing and distribution effort and by engaging in research and development in California. In that regard, BMS was on notice that it could be sued in California by nonresident plaintiffs. In fact, our courts have frequently handled nationwide class actions involving numerous nonresident plaintiffs.”

California has a clear interest

BMS argued that the claims of non-resident plaintiffs had no connection to and did not suffer any injury in California. But the court ruled that the proper focus is on the defendant and whether the corporation has created contacts in the forum state.

California has a clear interest in trying the mass tort cases together to promote efficient adjudication of California residents‘ claims. “Because mass tort injuries may involve diverse injuries or harm not amenable to the efficiency and economy of a class action, they present special problems for the proper functioning of the courts and the fair, efficient, and speedy administration of justice. Without coordination, those who win the race to the courthouse [and] bankrupt a defendant early in the litigation process would recover but effectively shut out other potential plaintiffs from any recovery,” the court ruled.

“Balancing the burdens imposed by this mass tort action, and given its complexity and potential impact onthe judicial systems of numerous other jurisdictions, we conclude that the joint litigation of the nonresident plaintiffs‘ claims with the claims of the California plaintiffs is not an unreasonable exercise of specific jurisdiction over defendant BMS.”

 

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