Recently in Legal Category

Sherley et al v Sebelius et al. The case that won't go away...to the chagrin of scientists who rely on government funding for research with human embryonic stem cells (hESCs).

The Nature News Blog reports today that scientists James Sherley and Theresa Deisher, who choose to work with adult stem cells, are appealing Judge Royce Lamberth's reluctant decision in July to shoot down a permanent injunction against federal funding for hESC research. The scientists submitted their legal brief yesterday to the US Court of Appeals for the DC Circuit. The appeals court, which ruled against Sherley et al last April (with respect to their request for a preliminary injunction), will hear oral arguments on April 23rd in this new appeal to overturn Lamberth's ruling against a permanent injunction.

But a similar decision granting federal funds for hESC research by the appeals court is not a given. The randomly selected, 3-judge panel for the April hearing will be somewhat different than the one that ruled last year, the Nature News Blog reveals. The judges for the upcoming appeals hearing will be Republican appointees Chief Judge David Sentelle, Judge Janice Rogers Brown, and Judge Karen LeCraft Henderson. The lone, common panel member is Henderson, who dissented in the previous appeals hearing by calling the government's favorable interpretation of existing law (ie, the highly ambiguous Dickey-Wicker amendment) "linguistic jujitsu."

Image of undifferentiated hESCs from http://www.nih.gov/catalyst/2007/07.01.01/page1.html. 

By way of Pharmalot:

Cheng Yi Liang, 57, pleaded guilty yesterday to securities fraud and "making a false statement," after the SEC charged the former FDA chemist in March with insider trading (for background, go here). The maximum sentence for the first count is a 20-year prison term followed by a 5-year supervised release and a fine of $5 million. For count two, Liang could be imprisoned for 5 years and fined $250,000. An alternative fine could also be ordered for Liang, the plea agreement indicates: twice his gross gain or loss—or about $7.5 million by my calculation. A guilty plea also may endanger his immigration status (it is not stated in the agreement what Liang's immigration status is, however).

The plea agreement also argues that Liang's offenses are especially egregious because of the amount of money he earned through insider knowledge, the "sophisticated means" by which he earned it, and the fact that he was in a "position of public trust" as an FDA employee. Liang has evidently agreed to forfeit his $3,776,152 in gains through his TDAmeritrade and other accounts, as well as some vital real estate (eg, his residence in Gaithersburg, Maryland, and the home of his son, "A. L.").

Pharmalot also reports that Cheng Yi Liang's son, Andrew Liang, pleaded guilty last month to one count of possessing child pornography (yeesh), which was discovered in the government's investigation.

It's still not clear what tipped off the feds to the elder Liang's trading activities, but Derek Lowe's original thought about the profits Liang realized from the surprise approval of the antipsychotic iloperidone (Fanapt; Vanda Pharmaceuticals) remains highly plausible.

This week's NEJM provides a useful barometer article, including a neato graphic timeline, on the litigation status of [PP]ACA ("Not So Fast—Jusisdictional Barriers to the ACA Litigation"). Thanks, Mssrs Jost and Hall.

Their salient points:

• So far, ~30 lawsuits have been filed against the ACA.
• A Supremes' decision in June 2012 is likely, given the admin's petition for their review on September 28.
• The jurisdictional issues generally, which are somewhat intertwined, rest on one of the following:
• Whether Congress exceeded its constitutional authority when imposing the individual mandate to purchase insurance.
• Whether state or individual plaintiffs have standing when challenging the ACA—particularly, in the latter case, before the "meat" of the ACA (eg, the individual mandate) goes into effect in 2014.
• Whether grievances are sufficiently ripe—meaning whether cases have been filed prematurely (before the "meat" of the ACA goes into effect in 2014).
• Whether the fine for not purchasing insurance is a penalty or tax or something else altogether (eg, an "exaction"*) and whether the label really makes any difference (the answer: it seems to; in fact, maybe big time).

My favorite part of the article, however, is the reference for the table outlining the status of 6 ACA cases.** It is the ACA Litigation Blog (a blog!), evidently run by Santa Clara law professor Brad Joondeph. Har-dee-har-har, NEJM.

ACA = Affordable Care Act.

* Haven't heard that one yet.
** For scorekeepers: 1, it's constitutional; 1, it's unconstitutional; 4, no jurisdiction; 1, decision pending.

Most US physicians will be sued at some point during their medical career, says a newly published malpractice-claims study in the NEJM. And for those clinicians in high-risk specialties,* the chance of being sued by the age of 50 approaches 100%. That's sobering news for every physician, who already knew that the odds of a malpractice suit—whether frivolous or no—were high, but who maybe didn't know that they were THAT high.

The study results also, perhaps ironically, support a nihilistic attitude among practitioners, who maybe (maybe) would have been enthusiastic about measures to reduce the risk of a malpractice suit. But given the reported odds now, they might think Why bother?

The happier news from the study (at least from the physicians' and insurer's perspectives): A minority (22%) of malpractice claims lead to a payment.

The quasi-perplexing news: Higher payments aren't necessarily from more frequently sued docs. The average payout from neurosurgeons, $344,811, was substantially less than that from pediatricians, $520,924—despite the fact that a neurosurgeon is about 6 times more likely to be sued in a given year than a pediatrician.

* Surgical specialties, gastroenterology[?], ob-gyn.

Judge Royce Lamberth, the chief judge of the US District Court for DC and the guy who originally granted a preliminary injunction against stem-cell research in the case of Sherley et al v Sibelius et al (and created a lot of havoc within the NIH and among US stem-cell researchers), has now decided that it's all okay—begrudgingly. On Wednesday, Lamberth issued his ruling on a permanent injunction that makes federal funding of research with human embryonic stem cells (hESCs) legal (go here for the Nature News Blog's story).

Lamberth's decision on a permanent injunction was evidently informed by the opinions of the US Court of Appeals for the DC Circuit, which shot down Lamberth's original, preliminary injunction last April. At the heart of Lamberth's newly revised opinion is the remaining ambiguity of "research." He concludes,

...the DC Circuit has made it abundantly clear that the term is ambiguous as a matter of law. While it may be true that by following the Court of Appeals' conclusion as to the ambiguity of "research," this Court has become a grudging partner in a bout of "linguistic jujitsu," [quoting a phrase from the Appeals Court's dissenting opinion], such is life for an antepenultimate court.

And so, for the losing plaintiffs, their option is to accept Lamberth's reluctant decision or to pursue their case to the ultimate court.*

* US District Court for DC = antepenultimate court; US Court of Appeals for the DC Circuit = penultimate court; Supreme Court = ultimate court.

Teva's launch-generic-at-risk business model is well-known. The strategy is intended to produce huge profits by making early (premature) generic drugs in the possible wake of losing, or more likely settling, patent-infringement suits. The company's most recent legal tangle on this front is with Pfizer, the paragon of big bad pharma companies, which would like to retain its patent monopoly on the blockbuster Lipitor.* Three weeks ago, Teva launched its own version of the statin in the United Kingdom, and Pfizer responded predictably (and Teva counter-responded).

But Teva also makes its own branded medicines, most notably a disease-modifying drug for multiple sclerosis, Copaxone, which provides the company with a substantial amount of revenue. According to today's WSJ, this MS drug (with a current monthly cost of more than $3500) produced $3 billion in sales last year for Teva or nearly 20% of total company's sales. And now, generic drug makers Mylan and Momenta want to produce their own versions of Copaxone, ahead of the drug's key expiration dates in 2014 and 2015. And so in response, Teva finds itself in the position of its nemesis Pfizer, by using expected legal counter-strategies to defend its still-patented cash cow.

* Which expires next year.

Twelve days ago (April 29, 2011), the US Court of Appeals for the DC Circuit finally ruled (in a 2-1 decision) against a preliminary injunction that banned the use of federal funds to support research on human embryonic stem cells (hESCs).* (So, to sift through the multiple negatives in that sentence, there is now no preliminary injunction against the use of hESCs in medical research. In other words, the government can fund hESC work...at least for now.)

The preliminary injunction was granted by Judge Royce Lamberth way back on August 23 of last year in the case of Sherley et al v. Silbelius et al (for essential background on this issue, see last year's no. 3 story at Pathophilia). Given the strike down, it is presently up to Lamberth to rule on a permanent injunction against federally funded hESC research.

And so now, given the appeals court 2-1 split decision, the original plaintiffs (Sherley et al) want to amend their complaint, reports The Great Beyond blog. Their proposed additional arguments are presumably informed by the opinion of the dissenting appeals court judge, Karen LeCraft Henderson, who called her colleagues' reasoning "linguistic jujitsu." The defendants (ie, the government), in no surprise, oppose the plaintiffs' "unnecessary" motion to amend their complaint.

When Judge Lamberth will make his ruling on a permanent injunction in this case is a big, useless guess—like, oh, sometime in the future.

* The appellate arguments were made in December of last year.
Image of undifferentiated hESCs from http://www.nih.gov/catalyst/2007/07.01.01/page1.html. 

A Montana woman is suing Abbott

, the maker of Humira, after she developed symptoms of peripheral neuropathy (PN) while taking the TNF inhibitor for Crohn's disease. Yesterday's news from Bloomberg prompts a bit of research here on a possible link between the use of TNF inhibitors and PN and the sticky task of dissecting out the underlying illness (eg, Crohn's disease, rheumatoid arthritis, psoriasis) as an alternative cause of neuropathy.

Cue a case report and literature review of probable TNF-inhibitor-associated PNs by Lozeron et al, which was published in a 2009 issue of the Archives of Neurology. The PN complication appears to be a bona fide, albeit very rare, drug-related event, with most neuropathies defined as sensory, motor, or mixed demyelinating PNs (vs axonal). And a sizable chunk of these PNs appear to be clinically indistinguishable from Guillain-Barre syndrome, aka acute demyelinating PN (which necessitated the standard treatments of plasma exchange and/or IV Ig).

The temporal sequence of events suggests a causal contribution of the drug,* although it should be noted that the underlying condition may well contribute to the development of a PN—which may, in turn, predispose a patient to superimposed drug-related damage. The long-term course for these TNF-inhibitor-treated patients—PN-wise—appears to be generally favorable, particularly if the drug is discontinued. Although Lozeron et al advise, on the basis of their long-term follow-up of 5 PN cases, that withdrawing TNF-inhibitor therapy is not always necessary.

As far as the personal-injury/legal angle is concerned, the overriding argument (at least by my understanding) will be to show that the drug maker failed to warn of the PN risk (provided that the drug maker was even aware of the adverse event). The latest, online version of the Humira package insert (March 2011) states,

Use of TNF blocking agents, including Humira, has been associated with rare cases of new onset or exacerbation of clinical symptoms and/or radiographic evidence of central nervous system demyelinating disease, including multiple sclerosis (MS), and peripheral demyelinating disease, including Guillain-Barre syndrome. Prescribers should exercise caution in considering the use of Humira in patients with preexisting or recent-onset central or peripheral nervous system demyelinating disorders.

A review of the text of historical labels for Humira (available at the FDA web site) shows a warning for CNS demyelination as early as 2002, when the drug was approved:

Use of TNF blocking agents, including Humira, has been associated with rare cases of exacerbation of clinical symptoms and/or radiographic evidence of demyelinating disease. Prescribers should exercise caution in considering the use of Humira in patients with preexisting or recent-onset central nervous system demyelinating disorders. 

However, warnings about potential PN damage were not included in the Humira label, until the FDA prompted their inclusion last year. In a letter dated July 29, 2010, the FDA advised Abbott's Associate Director of Global Pharmaceutical Regulatory Affairs,

Reference is also made to our letter dated April 20, 2010, notifying you, under Section 505(o)(4) of the Federal Food, Drug, and Cosmetic Act (FDCA) of new safety information that we believe should be included in the labeling of TNF blockers. This information pertains to the risk of peripheral demyelinating disorders, including Guillain-Barre syndrome, demyelinating polyneuropathy, and multifocal motor neuropathy, associated with the use of the class of TNF blockers including Humira (adalimumab).

The label revision was apparently incorporated immediately by Abbott.

TNF = tumor necrosis factor.

* And it appears to be a drug class effect, with reports implicating infliximab (Remicade; Centocor Ortho Biotech), etanercept (Enbrel; Amgen/Pfizer), and adalimumab (Humira).

What's missing among the SEC's detailed charges of insider trading against FDA chemist Cheng Yi Liang is how the government was tipped off to Liang's (alleged) shootin'-fish-in-a-barrel, clandestine trades—which occurred (again, allegedly) over a span of at least 4-1/2 years and to the tune of more than $3.6 million in profits. It's mere speculation here, but the tipoff (or at least a contributory tipoff) may have been what it always seems to be historically. That is, living too large for one's income.

A hint that leads to this highly speculative conclusion is provided by the SEC's complaint, in which it's charged that Liang wrote $65,000 worth of checks to car dealerships for a "luxury" Infiniti sedan and Honda Odyssey minivan sometime between 2006 and the present. The complaint doesn't provide Liang's salary, but the FDA website indicates that a chemist most commonly earns an annual salary at the General Schedule levels of 9 through 13—which ranges presently (according to this site) from about $51,000 to $155,500 in the DC area. The higher end isn't chump change (particularly for a government job), but in the grand scheme of chemist's salaries, it's not huge either.

It's a brand new car! Promotional photo of Honda Odyssey minivan from http://automobiles.honda.com/odyssey/exterior-photos.aspx.

Addendum: Industry chemist and blogger-extraordinaire Derek Lowe suspects that the tipoff was Liang's profits from the "suprise approval" of the antipsychotic iloperidone (Fanapt; Vanda Pharmaceuticals) on March 6, 2009. He writes,

It wouldn't surprise me if this was the one that blew up the whole business. That was such an unexpected [Lowe's link] move by the FDA (after which the stock went up by a factor of six) that the SEC must have gone back and carefully checked to see if anyone had been building up a position beforehand.

Here's Vanda's stock price chart, from MSN Finance, for the relevant period, showing an astonishing 10-fold jump after the FDA announced iloperidone's approval.

According to the SEC, between March 30 and April 29, Liang acquired 125,065 shares at an average unit price of $1.08. From May 6th to the 14th, he sold all of his shares at an average unit price of $9.40, for a profit of more than $1 million. Liang's other alleged insider transactions yielded much lower gains, ranging from $9287 to $379,602. Of course, Lowe's suspicion relies on the assumption that the SEC is or has been appropriately vigilant for such exceptional trading activity.

The litigation phase of the tainted-heparin scandal (start here and here for important background) appears to be well underway, and veiled milestones of the personal-injury suits will evidently be given by the blogging lawyers at Drug and Device Law, who are "involved in the litigation" (presumably representing Baxter, given their unwavering pro-defendent stance).

Yesterday's DDL post crows about a recent ruling on the limited permissible testimony from a plaintiff's expert (ie, Daubert rulings).* Topics of expertise are confined, ruled US District Court Judge James G. Carr, who rejected testimony on wider issues on the potential risks of doing business in China.

If I'm correctly reading the subtext of the DDL post and the ruling, the foundation of the heparin litigation appears to rest on what Baxter should have done to ensure that its Chinese raw heparin wasn't tainted. Although, given that the contaminant, OSCS, was a heretofore unknown heparin contaminant, and the fact that the FDA still hasn't identified the ultimate source of the contaminant in China, I'm not sure how it would have been possible for Baxter (or its heparin supplier) to police for it.

Now it may be a matter of arguing (per the plaintiffs) that Baxter should have known when it was dealing with reputable Chinese suppliers. But (the counterargument might go), obviously not everything that comes of out China is dangerous, so how or when should a US company know with whom to do overseas business? (And especially when that Chinese company has its own set of potentially murky suppliers.)

I'm not necessarily a fan of Baxter, but it seems like a very difficult argument** for the plaintiffs in this era of undeniable globalization.

OSCS = oversulfated chondroitin sulfate.

* And the DDL team directed a particular slam at the "ubiquitous plaintiff's expert," Suzanne Parisian, MD, who may be prone to "elaboration," the ruling implied.

** At least a difficulat argument outside of a sympathetic jury.