Justia Drugs & Biotech Opinion Summaries

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

Novartis Pharmaceuticals Corporation manufactures Entresto, a drug used to treat chronic heart failure. MSN Pharmaceuticals, Inc. sought approval from the Food and Drug Administration (FDA) to market a generic version of Entresto by submitting an abbreviated new drug application (ANDA). MSN’s application excluded certain methods of use protected by Novartis’s patents and claimed that the generic drug contained the same active ingredients as Entresto. The FDA approved MSN’s application, prompting Novartis to challenge the approval, arguing that the generic’s labeling and composition were unlawfully different from Entresto.The United States District Court for the District of Columbia reviewed Novartis’s claims under the Administrative Procedure Act. Novartis argued that the FDA’s approval of MSN’s ANDA and denial of Novartis’s citizen petitions were arbitrary and capricious, particularly regarding the omission of patented dosing regimens and indications from the generic’s label, and the determination that the generic contained the same active ingredients as Entresto. The district court granted summary judgment in favor of the FDA, finding that the agency’s actions were reasonable and consistent with statutory and regulatory requirements. Novartis appealed this decision.The United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s judgment. The appellate court held that the FDA reasonably concluded the generic drug’s labeling changes were permissible to avoid patent infringement and did not render the generic less safe or effective for non-patented uses. The court also found that the FDA’s determination that the generic and Entresto shared the same active ingredients was supported by scientific evidence and regulatory guidance. The court applied de novo review to legal questions and deferred to the FDA’s scientific expertise, ultimately upholding the agency’s approval of MSN’s ANDA. View "Novartis Pharmaceuticals Corp. v. Kennedy" on Justia Law

A licensed veterinarian developed and manufactured undetectable performance enhancing drugs (PEDs) for use in professional horse racing, selling them to trainers who administered them to horses to gain a competitive edge. His salesperson assisted in these activities, operating a company that distributed the drugs without prescriptions or FDA approval. The drugs were misbranded or adulterated, and the operation involved deceptive practices such as misleading labeling and falsified customs forms. The PEDs were credited by trainers for their horses’ successes, and evidence showed the drugs could be harmful if misused.The United States District Court for the Southern District of New York presided over two separate trials, resulting in convictions for both the veterinarian and his salesperson for conspiracy to manufacture and distribute misbranded or adulterated drugs with intent to defraud or mislead, in violation of the Food, Drug, and Cosmetic Act. The district court denied motions to dismiss the indictment, admitted evidence from a prior state investigation, and imposed sentences including imprisonment, restitution, and forfeiture. The court calculated loss for sentencing based on the veterinarian’s gains and ordered restitution to racetracks based on winnings by a coconspirator’s doped horses.On appeal, the United States Court of Appeals for the Second Circuit held that the statute’s “intent to defraud or mislead” element is not limited to particular categories of victims; it is sufficient if the intent relates to the underlying violation. The court found no error in the admission of evidence from the 2011 investigation or in the use of gain as a proxy for loss in sentencing. However, it vacated the restitution order to racetracks, finding no evidence they suffered pecuniary loss, and vacated the forfeiture order, holding that the relevant statute is not a civil forfeiture statute subject to criminal forfeiture procedures. The convictions and sentence were otherwise affirmed. View "United States v. Fishman" on Justia Law

A pharmaceutical company participated in a federal program that required it to report the average price it received for drugs sold to wholesalers, which in turn affected the rebates it owed the government under Medicaid. From 2005 to 2017, the company sold drugs to wholesalers at an initial price, but if it raised the price before the wholesaler resold the drugs to pharmacies, it required the wholesaler to pay the difference. The company reported only the initial price as the average manufacturer price (AMP), excluding the subsequent price increases, which resulted in lower reported AMPs and thus lower rebate payments to the government. The company justified this exclusion by categorizing the price increases as part of a bona fide service fee to wholesalers, even though the increased value was ultimately paid by pharmacies.The United States District Court for the Northern District of Illinois reviewed the case after a qui tam action was filed by a relator, who alleged that the company’s AMP calculations were false and violated the False Claims Act (FCA). The district court granted summary judgment to the relator on the issue of falsity, finding the AMP calculations and related certifications were factually and legally false. The issues of scienter (knowledge) and materiality were tried before a jury, which found in favor of the relator and awarded substantial damages. The company appealed, challenging the findings on falsity, scienter, and materiality, while the relator cross-appealed on the calculation of the number of FCA violations.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The court held that the company’s exclusion of price increase values from AMP was unreasonable and contradicted the plain language and purpose of the relevant statutes, regulations, and agreements. The court also held that the jury reasonably found the company acted knowingly and that the false AMPs were material to the government’s payment decisions. The court rejected the cross-appeal on damages, finding the issue was not properly preserved for appeal. View "Streck v Eli Lilly and Company" on Justia Law