Justia Drugs & Biotech Opinion Summaries

Guaranteed was a “reverse distributor,” paid by healthcare providers to return unused or expired pharmaceutical drugs to the drug manufacturers, for refunds for the healthcare-provider clients. Refunds were wired directly to Guaranteed’s general operating account; the company then issued refund checks to the relevant clients, less a service fee. In 2001, the Department of Defense contracted with Guaranteed. The government began investigating Guaranteed after the District of Columbia noticed that it did not receive the full refund on a return of some of its pharmaceuticals. The investigation uncovered a series of schemes that Guaranteed used to defraud its clients.Guaranteed, its CEO, and its CFO, were convicted of multiple counts of wire fraud, mail fraud, conspiracy to launder money, and theft of government property. In addition to prison sentences, the court imposed more than $100 million in restitution and forfeitures. The Third Circuit reversed the money laundering convictions and remanded for resentencing. Viewing the evidence in the light most favorable to the government, there is not sufficient evidence to prove beyond a reasonable doubt that the alleged complex financial transactions—after the initial receipt of “commingled” fraudulent and lawfully obtained funds—were designed for "concealment money laundering." The court otherwise affirmed, rejecting challenges to a search warrant, the sufficiency of the evidence, the jury instructions, and the court’s refusal to permit proposed expert testimony. View "United States v. Fallon" on Justia Law

The First Circuit affirmed the judgment of the district court resentencing Defendant while applying two sentencing enhancements under the United States Sentencing Guidelines, holding that both enhancements applied.Defendant, a former supervising pharmacist at the New England Compounding Center (NECC), was convicted for his conduct in connection with a criminal investigation into a 2012 deadly nationwide outbreak of fungal meningitis that was traced to the NECC's shipments of contaminated drugs. The district court sentenced Defendant to a term of imprisonment of ninety-six months. On appeal, the First Circuit vacated and remanded Defendant's sentence. On remand, the district court held that two enhancements applied to Defendant and resentenced him to a 126-month term of imprisonment. The First Circuit affirmed, holding that the district court did not err in applying the two enhancements. View "United States v. Chin" on Justia Law

Elmer owned and operated multiple healthcare-related companies including Pharmakon, a compounding pharmacy that mixes and distributes drugs—including potent opioids like morphine and fentanyl—to hospitals across the U.S.. Pharmakon conducted its own internal potency testing and contracted with a third party to perform additional testing to evaluate whether its compounded drugs had too little of the active ingredient (under-potent) or too much (over-potent). In 2014-2016, testing showed 134 instances of under- or over-potent drugs being distributed to customers. Elmer knew the drugs were dangerous. Rather than halting manufacturing or recalling past shipments, sales continued and led to the near-death of an infant. Elmer and Pharmakon lied to the FDA.Elmer was charged with conspiracy to defraud the FDA (18 U.S.C. 371); introducing adulterated drugs into interstate commerce (21 U.S.C. 331(a), 333(a)(1) & 351); and adulterating drugs being held for sale in interstate commerce (21 U.S.C. 331(k), 331(a)(1) & 351). Pharmakon employees, FDA inspectors, and Community Health Network medical staff testified that Elmer was aware of and directed the efforts to conceal out-of-specification test results from the FDA. The district court sentenced Elmer to 33 months’ imprisonment. The Seventh Circuit affirmed, rejecting challenges to rulings related to the evidence admitted at trial and Elmer’s sentence. The evidence before the jury overwhelmingly proved Elmer’s guilt. The sentence was more than reasonable given the gravity of Elmer’s crimes. View "United States v. Elmer" on Justia Law

In July 2019, the Department of Justice announced a revised protocol for execution by lethal injection using a single drug, pentobarbital. Plaintiffs, federal death row inmates, sought expedited review of three of the district court's rulings, and two plaintiffs with upcoming execution dates moved for stays of execution pending appeal.The DC Circuit held that the district court did not err in granting summary judgment for the government on plaintiffs' Federal Death Penalty Act (FDPA) claim. In this case, plaintiffs had pointed to several alleged discrepancies between the 2019 Protocol and state statutes dictating different methods of execution or aspects of the execution process. The court agreed with the district court's conclusion that there was no conflict, either because the government had committed to complying with the state statutes at issue or because no plaintiff had requested to be executed in accordance with them.However, the court reversed the district court's dismissal of plaintiffs' Eighth Amendment challenge for failure to state a claim. The court held that, by pleading that the federal government's execution protocol involves a "virtual medical certainty" of severe and torturous pain that is unnecessary to the death process and could readily be avoided by administering a widely available analgesic first, plaintiffs' complaint properly and plausibly states an Eighth Amendment claim. The court denied Plaintiffs Hall and Bernard's request for a stay of execution based on the Eighth Amendment claim. The court also held that the district court should have ordered the 2019 Protocol to be set aside to the extent that it permits the use of unprescribed pentobarbital in a manner that violates the Federal Food, Drug & Cosmetic Act (FDCA). Finally, the court affirmed the district court's denial of a permanent injunction to remedy the FDCA violation. View "Roane v. Barr" on Justia Law

The First Circuit affirmed both of Defendant's federal racketeering-related convictions but vacated and remanded the prison sentence, forfeiture order, and restitution order, holding that the district court erred in several respects.Defendant was convicted of racketeering, racketeering conspiracy, federal mail fraud, and violating the Federal Food, Drug and Cosmetic Act (FDCA), 21 U.S.C. 331(a), 333(a). The district court sentenced Defendant to ninety-six months' imprisonment, issued a forfeiture order in the amount of $175,000, and ordered restitution. On appeal, Defendant challenged his convictions for racketeering and racketeering conspiracy and his sentence. The First Circuit remanded the case, holding (1) the convictions were supported by sufficient evidence; (2) the district court erred in its reasoning declining to apply certain enhancements; (3) neither of the two reasons the district court gave for limiting the forfeiture order was sustainable; and (4) the district court too narrowly construed who counts as a "victim" under the Mandatory Victims Restitution Act. View "United States v. Chin" on Justia Law

Pountney was indicted for theft, identity fraud, and two counts of drug possession—one involving fentanyl and one involving acetaminophen with codeine. Pountney stipulated to the charges of theft, identity fraud, and possession of acetaminophen with codeine. Count 4 alleged that Pountney knowingly obtained, possessed or used at least five but not more than 50 times the "bulk amount" of fentanyl, R.C. 2925.11(A), a second-degree felony under R.C. 2925.11(C)(1)(c). The “bulk amount” of a Schedule II opiate or opium derivative, like fentanyl, is an amount equal to or exceeding 20 grams or five times the maximum daily dose in the usual dose range specified in a standard pharmaceutical reference manual. Pountney stipulated that he knowingly obtained 10 three-day transdermal fentanyl patches; each delivered 50 micrograms of fentanyl per hour. If the state proved that 10 patches equaled or exceeded five times the bulk amount of transdermal fentanyl, Pountney would be guilty of a second-degree felony; otherwise, he would be guilty of a fifth-degree felony. The court found Pountney guilty on all counts, including second-degree-felony aggravated possession of fentanyl. The Eighth District reversed with instructions to enter a finding of guilty on Count 4 as a fifth-degree felony. The Supreme Court of Ohio affirmed. Although there is no usual dose range of fentanyl, the state may not rely upon the usual dose range of morphine, the prototype opiate, to establish the bulk amount of fentanyl under R.C. 2925.01(D)(1)(d). View "State v. Pountney" on Justia Law

Appellee was charged with a single count of possession with intent to distribute, or possession, of a “designer drug,” a substance similar to a scheduled controlled substance, not the same. The trial court here determined experts have been unable to reach an agreement on a method for analyzing and determining the similarities between the chemical structures the controlled substance and its designer analogue, leading it to conclude this disagreement rendered the Pennsylvania designer drug statute unconstitutionally vague. The Pennsylvania Supreme Court reversed, finding the common pleas court did not account for the difference between the concepts of analogue and substantial similarity, the latter of which is more readily apprehensible to the lay citizen in the context of comparing chemical structures; nor did it recognize that, unlike the controlled-substance provision, the designer drug provision included a narrowing scienter specification. Moreover, the Court found in this case that there were “considerable similarities” as between the two molecules based on their two-dimensional diagrams. View "Pennsylvania v. Herman" on Justia Law

At his Reedsville, Wisconsin home, Dessart manufactured and sold products containing the active chemical ingredients in numerous prescription drugs, offering them for sale online with the disclaimer “for research only” to evade FDA oversight. After receiving an anonymous tip, investigating Dessart’s website, and intercepting three packages connected to Dessart’s operation, agents obtained a warrant, conducted a controlled delivery, and search Dessart’s house. He was convicted of violating the Food, Drug, and Cosmetic Act, 21 U.S.C. 331, with the intent to defraud or mislead the agency, which converted his violations from strict-liability misdemeanors into specific-intent felonies. The Seventh Circuit affirmed, rejecting arguments that the FDA’s investigator lied in procuring a search warrant and the warrant otherwise lacked probable cause; the government’s evidence was insufficient to prove that he acted with deceptive intent; and the district court erred in instructing the jury on the definition of “prescription drug.” The evidence of Dessart’s intent to mislead the FDA was ample and easily sufficient to support the jury’s verdict. View "United States v. Dessart" on Justia Law

Appellant, by and through his attorney, John Irwin, filed a motion for rule on clerk and a motion to be relieved as counsel. Irwin, a full-time, state-salaried public defender, stated in his motion for rule on clerk that the clerk refused to file the untimely record because of Irwin’s failure to follow the Arkansas Rules of Appellate Procedure-Criminal. The Supreme Court granted the motion for rule on clerk, as Irwin candidly admitted fault for the failure to perfect the appeal, and granted the motion to be relieved as counsel, as Irwin was not eligible for compensation on appeal. View "Childers v. State" on Justia Law

In the late 1990s, people who had taken the prescription diet-drug combination Fen-Phen began suing Wyeth, claiming that the drugs caused valvular heart disease. A 2000 settlement included creation of the Fen-Phen Settlement Trust to compensate class members who had sustained heart damage. Claims required medical evidence. Attorneys who represented certain claimants retained Tai, a board-certified Level 2-qualified cardiologist, to read tests and prepare reports. Tai read 12,000 tests and asserted that he was owed $2 million dollars for his services. Tai later acknowledged that in about 10% of the cases, he dictated reports consistent with the technicians’ reports despite knowing that the measurements were wrong, and that he had his technician and office manager review about 1,000 of the tests because he did not have enough time to do the work. A review of the forms Tai submitted found that, in a substantial number of cases, the measurements were clearly incorrect and were actually inconsistent with a human adult heart. Tai was convicted of mail and wire fraud, 18 U.S.C. 1341 and 1343, was sentenced to 72 months’ imprisonment, and was ordered to pay restitution of $4,579,663 and a fine of $15,000. The Third Circuit rejected arguments that the court erred by implicitly shifting the burden of proof in its “willful blindness” jury instruction and applying upward adjustments under the advisory Sentencing Guidelines for abuse of a position of trust and use of a special skill, but remanded for factual findings concerning whether Tai supervised a criminally culpable subordinate, as required for an aggravated role enhancement. View "United States v. Tai" on Justia Law