Justia Drugs & Biotech Opinion Summaries

Two pharmaceutical companies developing treatments for achondroplasia, a genetic disorder, became involved in litigation after one company (Ascendis) filed a New Drug Application (NDA) for its product. The other company (BioMarin), holding a relevant patent, filed a complaint with the United States International Trade Commission (ITC) alleging patent infringement by Ascendis’s product. Shortly afterward, Ascendis filed a declaratory judgment action in the United States District Court for the Northern District of California, seeking a judgment of non-infringement and arguing that its activities were protected under the statutory “safe harbor” for regulatory approval.More than thirty days after filing its district court complaint, Ascendis moved for an expedited hearing. BioMarin responded by seeking to dismiss or stay the district court action pending the ITC’s investigation. Ascendis voluntarily dismissed its complaint without prejudice and promptly refiled a nearly identical complaint, this time moving for a mandatory stay under 28 U.S.C. § 1659(a)(2), which requires a district court to stay its proceedings if requested within thirty days of the action’s filing or of being named as a respondent in the ITC. BioMarin opposed, contending Ascendis’s request was untimely, and sought a discretionary stay instead.The United States District Court for the Northern District of California granted BioMarin’s motion for a discretionary stay and denied Ascendis’s motion for a mandatory stay as moot. On appeal, the United States Court of Appeals for the Federal Circuit held that § 1659(a)(2) does not permit a litigant to restart the thirty-day period for a mandatory stay by voluntarily dismissing and refiling a substantially identical action. The court reasoned that the statutory deadline applies to the original action and that allowing refiling would circumvent the statute’s purpose. The Federal Circuit affirmed the district court’s decision. View "ASCENDIS PHARMA A/S v. BIOMARIN PHARMACEUTICAL INC. " on Justia Law

A California-based company that produces lab-grown chicken sought to distribute and sell its product in Florida. After the company received federal approval from the USDA and FDA to market its lab-grown chicken, Florida enacted SB 1084, a law banning the manufacture, sale, and distribution of all lab-grown meat within the state. The company had previously held tasting events and developed business relationships in Florida but had no plans to manufacture its product there.Following the enactment of SB 1084, the company filed suit in the U.S. District Court for the Northern District of Florida against state officials, seeking declaratory and injunctive relief. The company argued that the federal Poultry Products Inspection Act (PPIA) preempted Florida’s ban, claiming the state’s law imposed “additional or different” ingredient or facilities requirements in violation of the PPIA. The district court denied the company’s motion for a preliminary injunction, finding the company unlikely to succeed on its preemption claims because SB 1084 did not regulate the company’s ingredients, premises, facilities, or operations. The court also addressed standing and procedural questions, ultimately dismissing the preemption claims after the company amended its complaint.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed whether the filing of an amended complaint or the district court’s dismissal order rendered the appeal moot and whether the company could challenge the Florida law as preempted. The Eleventh Circuit held the appeal was not moot and that the company could bring a preemption action in equity. However, the court concluded the company was unlikely to succeed on the merits. The court held that Florida’s ban did not impose ingredient or facilities requirements preempted by the PPIA, as it simply banned the product’s sale and manufacture. Therefore, the district court’s denial of a preliminary injunction was affirmed. View "Upside Foods Inc v. Commissioner, Florida Department of Agriculture" on Justia Law

A former employee of a pharmaceutical manufacturer brought a qui tam lawsuit under the False Claims Act, alleging that the company improperly calculated and reported its “Best Price” for certain drugs to the Centers for Medicare and Medicaid Services (CMS), as required under the Medicaid Rebate Statute. The plaintiff claimed that, during a period from 2005 to 2014, the company failed to aggregate multiple rebates and discounts given to different entities on the same drug, resulting in inflated “Best Price” reports and underpayment of rebates owed to Medicaid. The complaint asserted that the company was subjectively aware that CMS interpreted the statute to require aggregation of all such discounts, especially after the company’s communications with CMS during a 2006–2007 rulemaking process and the company’s subsequent internal audit.After the government and several states declined to intervene, the United States District Court for the District of Maryland dismissed the amended complaint, finding that, even under the subjective scienter standard established in United States ex rel. Schutte v. SuperValu Inc., the plaintiff had not plausibly alleged that the company acted with actual knowledge, deliberate ignorance, or reckless disregard as to the truth or falsity of its reports. The district court also suggested that ambiguity in the statute precluded a finding of falsity.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the dismissal de novo. The Fourth Circuit held that the plaintiff’s allegations—including the company’s awareness of CMS’s interpretation of the rule, its targeted audit and compliance efforts, and its continued use of non-aggregated reporting—plausibly alleged the requisite subjective scienter under the False Claims Act. The court clarified that statutory ambiguity does not, at the pleading stage, negate scienter or falsity, and remanded for the district court to address other elements, including falsity, in the first instance. The Fourth Circuit reversed the dismissal and remanded for further proceedings. View "United States ex rel. Sheldon v. Allergan Sales, LLC" on Justia Law

A resident of Puerto Rico suffered work-related injuries in 1994, resulting in permanent total disability. His employer and its insurance carrier were ordered to provide medical care under Section 7 of the Longshore and Harbor Workers’ Compensation Act, as extended by the Defense Base Act. In 2019, a Puerto Rico-licensed physician recommended medical cannabis-infused edibles to treat the petitioner’s chronic pain. The petitioner sought reimbursement for these products from the employer’s insurance carrier, which denied the request.The petitioner then asked the United States Department of Labor’s Office of Administrative Law Judges to order reimbursement, arguing that medical cannabis was a reasonable and necessary treatment. The Administrative Law Judge denied the request, finding that marijuana’s classification as a Schedule I substance under the Controlled Substances Act (CSA) meant it could not have an accepted medical use under federal law. On appeal, the Department of Labor Benefits Review Board affirmed this decision by a 2-1 vote, agreeing that reimbursement was barred by the CSA and rejecting arguments that recent federal appropriations riders or executive actions altered the federal legal status of marijuana.On further appeal, the United States Court of Appeals for the Second Circuit reviewed the case. The court held that because marijuana remains a Schedule I substance under the CSA, it cannot be considered a reasonable and necessary medical expense for purposes of reimbursement under the Longshore and Harbor Workers’ Compensation Act. The court found that neither appropriations riders nor recent executive or legislative actions had changed marijuana’s federal classification or its legal status under the Act. Therefore, the court denied the petition for review. View "Garcia v. Department of Labor" on Justia Law

A man was convicted by a Michigan state jury for delivering oxycodone to a friend, resulting in her death from a drug overdose. The evidence showed that the man and the deceased had a longstanding relationship, and after her release from jail, he purchased 40 Percocet pills—containing oxycodone and acetaminophen—and spent time with her at a hotel where she died. Medical experts found oxycodone in her blood and acetaminophen in her urine, both components of Percocet, and testified that oxycodone was a substantial factor in causing her death.After his conviction, the defendant sought a new trial in the Michigan courts, arguing that his trial counsel was ineffective for two reasons: failing to investigate an “acetaminophen-based” defense (that the absence of acetaminophen in the blood meant the deceased had not consumed Percocet), and failing to call an expert witness to challenge the prosecution’s case on causation. The trial court held a hearing and ultimately rejected these claims. The Michigan Court of Appeals affirmed, and the Michigan Supreme Court denied further review.The United States District Court for the Eastern District of Michigan then denied the defendant’s petition for habeas corpus, and the case was appealed to the United States Court of Appeals for the Sixth Circuit. The Sixth Circuit held that, under the highly deferential standards of the Antiterrorism and Effective Death Penalty Act (AEDPA), the state courts did not unreasonably apply clearly established Supreme Court law or make unreasonable determinations of fact in rejecting the ineffective assistance claims. The court further held that counsel’s strategic decisions were not objectively unreasonable and that the alleged failures did not prejudice the outcome of the trial. The Sixth Circuit affirmed the denial of habeas relief. View "DeBruyn v. Douglas" on Justia Law

The City of Boston, along with its Public Health Commission and Housing Authority, brought suit against two pharmacy benefit managers (PBMs), OptumRx and Express Scripts, alleging that the PBMs had worked with opioid manufacturers to misrepresent the risks of opioid drugs. The City claimed that this conduct violated Massachusetts public nuisance law and resulted in harm to the City. The PBMs removed the case to federal court and argued that the suit was untimely because it was brought after the three-year statute of limitations had expired. The City responded by asserting that its complaint sufficiently alleged a continuing nuisance and that the statute of limitations should be tolled due to the PBMs’ fraudulent concealment of their wrongdoing.The United States District Court for the District of Massachusetts granted the PBMs’ motion to dismiss, finding that the City either knew or should have known of its injuries and of the PBMs’ alleged role before 2021, based on public records and prior litigation, and thus failed to file suit within the statutory period. The district court further ruled that the City had not adequately pled a continuing nuisance, as it did not allege any specific, recent unlawful acts within the limitations period, and rejected the City’s claim of fraudulent concealment, determining that the City had the means to discover the facts needed for its claim. The district court also denied a motion by the PBMs to disqualify the City's law firm, Motley Rice.On appeal, the United States Court of Appeals for the First Circuit affirmed both the dismissal of the City’s state law claim and the denial of the motion to disqualify Motley Rice. The court held that the action was time-barred and that the City had not met the requirements for tolling the statute of limitations or for pleading a continuing nuisance under Massachusetts law. View "The City of Boston v. OptumRx, Inc." on Justia Law

The case centers on a dispute involving a pharmaceutical company founded by the plaintiff, who also served as its CEO. The plaintiff obtained investment from a Canadian entity controlled by one of the defendants, who later became a director. The company entered into a profitable licensing agreement for a drug, and the plaintiff claims he was personally entitled to 30% of the profits based on an oral agreement. The investor and his affiliates, however, allege that the plaintiff wrongfully diverted corporate assets by taking this share. After disagreements arose, the investor replaced himself and another director on the board with officers from his own affiliates, who began investigating the alleged diversion. In response, the plaintiff initiated litigation, asserting that the investigation was a breach of fiduciary duty and that the investor and his affiliates acted in bad faith for their own benefit.Previously, the Court of Chancery of the State of Delaware was asked to consider several claims, including breach of fiduciary duty, civil conspiracy, and tortious interference against the investor, his affiliates, and the two new directors. The investor’s affiliate moved to dismiss for lack of personal jurisdiction, and the court found it had no jurisdiction over the affiliate. The court also examined whether it had jurisdiction over the investor for claims other than those related to his service as a director, finding it did not because the complaint failed to state a viable claim against him in that capacity.In the present decision, the Court of Chancery held that it lacked personal jurisdiction over the investor’s affiliate and over the investor in his non-director capacities, dismissing those claims without prejudice. The court further dismissed with prejudice the breach of fiduciary duty and conspiracy claims against the directors and the investor in his director capacity, finding no viable claims were stated. However, the court allowed the plaintiff’s claim for a declaratory judgment regarding his right to the profits from the drug to proceed against the company, provided an amended complaint is filed naming the company as a proper defendant. View "MacLaughlan v. Einheiber" on Justia Law

During a contentious divorce and custody dispute, Amanda Hovanec, who had returned to Ohio from South Africa with her children, conspired with Anthony Theodorou, her romantic partner, to kill her husband, T.H. After failed attempts to hire hitmen in South Africa, Theodorou, at Hovanec’s direction, obtained and shipped etorphine, a dangerous animal tranquilizer, to the United States. Hovanec ultimately used the drug to fatally inject T.H. at her mother Anita Green’s home. Green assisted after the murder by helping to select a burial site, driving the others to dig a grave, and later transporting them and the body for burial. The group also undertook efforts to conceal the crime, including disposing of T.H.’s belongings and misleading authorities. All three were arrested after an investigation revealed dashcam footage of the crime.In the United States District Court for the Northern District of Ohio, Hovanec pleaded guilty to multiple controlled-substance offenses resulting in death, and Green pleaded guilty to being an accessory after the fact. Hovanec received a 480-month sentence; Green received 121 months and was ordered to pay restitution for psychological care for T.H.’s and Hovanec’s children. Both defendants appealed their sentences and, in Green’s case, the restitution order.The United States Court of Appeals for the Sixth Circuit affirmed the sentences for both Hovanec and Green. The appellate court upheld the denial of a sentencing reduction for Green based on her lack of candor regarding knowledge of the murder plan. The court also affirmed the sentencing enhancements for Hovanec’s leadership role and obstruction of justice. However, the court reversed the restitution order against Green, holding that under federal law, restitution for psychological care requires evidence of bodily injury, defined as physical harm or physical manifestations of psychological harm, and remanded for further factual findings on this issue. View "United States v. Green" on Justia Law

A medical device company that manufactures spinal devices was indicted, along with its CEO and CFO, for allegedly paying bribes to surgeons through a sham consulting program in violation of the Anti-Kickback Statute. The indictment claimed the surgeons did not provide bona fide consulting services, but were paid to use and order the company’s devices in surgeries covered by federal health care programs. The company’s CFO, who is not a shareholder but is one of only two officers, allegedly calculated these payments based on the volume and value of surgeries performed with the company’s devices. During the development of the consulting program, the company retained outside counsel to provide legal opinions on the agreements’ compliance with health care law, and those opinions were distributed to the surgeons.After the grand jury returned the indictment, the United States District Court for the District of Massachusetts addressed whether the CFO’s plan to argue at trial that the involvement of outside counsel negated his criminal intent would effect an implied waiver of the company’s attorney-client privilege. The district court initially found that if the CFO or CEO invoked an “involvement-of-counsel” defense, it would waive the corporation’s privilege over communications with counsel. Following dismissal of charges against the company, the district court focused on whether the officers collectively could waive the privilege, concluded they could, and ruled that the CFO’s planned defense would constitute an implied waiver, allowing disclosure of certain privileged communications to the government. The district court stayed its order pending appeal.The United States Court of Appeals for the First Circuit vacated the district court’s waiver order and remanded. The Court of Appeals held that (1) the record was insufficient to determine whether the CFO alone had authority to waive the company’s privilege, and (2) not every involvement-of-counsel defense necessitates a waiver. The appellate court directed the district court to reassess the issue in light of changed circumstances and to consider less intrusive remedies before finding an implied waiver. View "United States v. SpineFrontier, Inc." on Justia Law

An attorney based in Oklahoma developed a business model to help out-of-state clients enter the state’s medical marijuana industry, which is governed by strict residency and disclosure requirements. He created a two-entity structure: one company, with nominal Oklahoma-resident owners, obtained the necessary state licenses, while a second company, owned and operated by out-of-state clients, ran the actual marijuana operations. The attorney did not disclose the true ownership structure to state authorities, and in some cases, marijuana was grown before the required state registrations were obtained. State authorities began investigating after noticing irregularities, such as multiple licenses listing the same address and repeated use of the same Oklahoma residents as owners, many of whom had little or no involvement in the businesses.Oklahoma state prosecutors charged the attorney with multiple felonies related to his business practices, including conspiracy and submitting false documents. While those charges were pending, a federal grand jury indicted him for drug conspiracy and maintaining drug-involved premises, based on the same conduct. In the United States District Court for the Western District of Oklahoma, the attorney moved to enjoin his federal prosecution, arguing that a congressional appropriations rider barred the Department of Justice from spending funds to prosecute individuals complying with state medical marijuana laws. The district court held an evidentiary hearing and denied the motion, finding that the attorney had not substantially complied with Oklahoma law, particularly due to nondisclosure of ownership interests and failure to obtain required registrations.On appeal, the United States Court of Appeals for the Tenth Circuit affirmed. The court held that the appropriations rider does bar the Department of Justice from spending funds to prosecute private individuals who comply with state medical marijuana laws. However, the court found that the attorney failed to substantially comply with Oklahoma’s requirements, so the rider did not protect him. The court concluded that the district court did not abuse its discretion in denying the injunction. View "United States v. Stacy" on Justia Law