Justia Drugs & Biotech Opinion Summaries

Two pharmaceutical companies challenged a federal program created by the Inflation Reduction Act of 2022, which directs the Centers for Medicare and Medicaid Services (CMS) to negotiate prices for certain high-expenditure prescription drugs lacking generic competition. Under this program, manufacturers of selected drugs must either negotiate a price with CMS or face steep excise taxes on all sales of those drugs, unless they withdraw all their products from specific Medicare and Medicaid programs. Both companies had drugs selected for negotiation and, while litigation was pending, agreed to participate and reached negotiated prices.The United States District Court for the District of New Jersey resolved the cases on cross-motions for summary judgment, as the parties agreed there were no material factual disputes. The District Court ruled in favor of the government, holding that the program did not violate the Takings Clause, the First Amendment, or the unconstitutional conditions doctrine. The companies appealed, and the United States Court of Appeals for the Third Circuit consolidated the appeals.The Third Circuit affirmed the District Court’s orders. It held that participation in Medicare and the negotiation program is voluntary, so there is no physical taking under the Fifth Amendment. The court found that economic incentives to participate do not amount to legal compulsion. It also held that the program’s requirements do not compel speech in violation of the First Amendment, as any speech involved is incidental to the regulation of conduct and participation is voluntary. Finally, the court concluded that the program does not impose unconstitutional conditions, as any compelled speech is limited to the contracts necessary to effectuate the program and does not restrict speech outside those contracts. The court affirmed summary judgment for the government. View "Bristol Myers Squibb Co v. Secretary United States Department of HHS" on Justia Law

A former sales representative for a pharmaceutical company alleged that the company engaged in an aggressive campaign to market one of its drugs, Vraylar, for uses not approved by the Food and Drug Administration (FDA), specifically for substance abuse and major depressive disorder (MDD). The representative, who was responsible for promoting the drug to medical providers, claimed that the company trained its sales force to encourage off-label prescriptions and incentivized providers to prescribe Vraylar for these unapproved uses. He further asserted that he faced adverse employment actions, such as loss of promotion and increased workload, after raising concerns internally about the legality and compliance of these marketing practices.After the representative filed a qui tam action under the False Claims Act (FCA) in the United States District Court for the Northern District of Indiana, the government declined to intervene. The plaintiff then amended his complaint, dropping his direct fraud claim and proceeding solely on a theory of retaliation under 31 U.S.C. §3730(h). The district court dismissed the complaint with prejudice, finding that the plaintiff’s internal complaints to the company focused on regulatory noncompliance rather than fraud against the government, and thus did not put the employer on notice of protected activity under the FCA.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court held that, to state a claim for FCA retaliation, an employee must plausibly allege that the employer was on notice that the employee was attempting to prevent fraud against the government, not merely regulatory violations. Because the plaintiff’s communications only referenced regulatory and policy concerns, and did not suggest government fraud, the court found the notice requirement unmet. The Seventh Circuit affirmed the district court’s dismissal and found no abuse of discretion in denying leave to amend. View "Lewis v AbbVie Inc." on Justia Law

Oregon enacted a law requiring prescription drug manufacturers to report detailed information about certain drugs, including pricing, costs, and factors contributing to price increases, to the state’s Department of Consumer and Business Services. The law also directs the agency to post most of this information online, but prohibits public disclosure of information designated as a trade secret unless the agency determines that disclosure is in the public interest. Since the law’s enactment, manufacturers have claimed thousands of trade secrets, but the agency has not publicly disclosed any such information.A trade association representing pharmaceutical manufacturers sued the director of the Oregon agency in the United States District Court for the District of Oregon, raising several facial constitutional challenges. The district court granted summary judgment for the association on two claims: that the reporting requirement violated the First Amendment by compelling speech, and that any use of the public-interest exception to disclose trade secrets would constitute an uncompensated taking under the Fifth Amendment. The court declared the entire reporting requirement unconstitutional and held that any disclosure of trade secrets under the public-interest exception would violate the Takings Clause unless just compensation was provided.The United States Court of Appeals for the Ninth Circuit reviewed the case. It reversed the district court’s summary judgment for the association on both the First and Fifth Amendment claims. The Ninth Circuit held that the reporting requirement compels commercial speech and survives intermediate scrutiny under the First Amendment, as it directly advances substantial state interests in transparency and market efficiency and is not more extensive than necessary. On the takings claim, the court found the association’s challenge justiciable but concluded that, under the Penn Central regulatory takings framework, none of the factors supported a facial claim that every disclosure under the public-interest exception would constitute a taking. The court remanded with instructions to enter summary judgment for the state on these claims. View "Pharmaceutical Research and Manufacturers of America v. Stolfi" on Justia Law

A pharmaceutical company developed a sublingual opioid painkiller, DSUVIA, which could only be administered in medically supervised settings due to safety concerns and was subject to a strict FDA Risk Evaluation and Mitigation Strategy (REMS). The company marketed DSUVIA with the slogan “Tongue and Done” at investor conferences, accompanied by additional disclosures about the drug’s limitations and REMS requirements. After the FDA issued a warning letter objecting to the slogan as potentially misleading under the Federal Food, Drug, and Cosmetic Act, several shareholders filed suit, alleging that the slogan misled investors about the complexity of administering DSUVIA and the drug’s limited market potential.The United States District Court for the Northern District of California dismissed the shareholders’ complaint, finding that the plaintiffs failed to adequately plead facts supporting a strong inference of scienter, but did not rule on whether the statements were false or misleading. The plaintiffs were given two opportunities to amend their complaint, but the court ultimately dismissed the case with prejudice.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the dismissal de novo. The Ninth Circuit held that the plaintiffs failed to adequately plead falsity because a reasonable investor would not interpret the “Tongue and Done” slogan in isolation, but would consider the context provided by accompanying disclosures and other available information. The court also held that the FDA’s warning letter did not establish falsity under securities law, as the standards and intended audiences differ. Additionally, the court found that the plaintiffs did not plead a strong inference of scienter, as the facts suggested the company’s officers acted in good faith. The Ninth Circuit affirmed the district court’s dismissal. View "Sneed v. Talphera, Inc." on Justia Law

A pharmaceutical company sought approval from the Food and Drug Administration (FDA) to market tasimelteon, a drug previously approved for a rare sleep disorder, as a treatment for jet lag. The company submitted results from several clinical trials, focusing on both objective sleep measures and subjective assessments of alertness and next-day functioning. The FDA’s Center for Drug Evaluation and Research issued a complete response letter indicating that the application did not provide substantial evidence of efficacy, particularly criticizing the measurement of next-day impairment and the tools used for subjective endpoints. The company engaged in further discussions and dispute resolution with the FDA, including proposing a narrower indication for approval, but these efforts were unsuccessful.After the FDA issued a formal notice of opportunity for a hearing (NOOH), the company requested a hearing and submitted expert declarations supporting the adequacy of its clinical evidence. The FDA ultimately denied both the application and the hearing request, finding no genuine and substantial issue of fact warranting a hearing. The company then petitioned the United States Court of Appeals for the District of Columbia Circuit for review, arguing that the FDA was required to hold a hearing, that material factual disputes existed, that the FDA’s decision-making was arbitrary and capricious, and that the final decision violated the Appointments Clause.The United States Court of Appeals for the District of Columbia Circuit held that the Food, Drug, and Cosmetic Act does not require the FDA to hold a hearing before denying every new drug application, but the agency must grant a hearing if there are material factual disputes. The court found that, in this case, the FDA’s refusal to hold a hearing was arbitrary and capricious because the company’s expert evidence created genuine disputes over the adequacy of the clinical trials. The court remanded the case to the FDA for further proceedings consistent with its opinion. View "Vanda Pharmaceuticals, Inc. v. FDA" on Justia Law

Robert Kennedy was convicted of possessing a firearm as a convicted felon, possessing heroin with the intent to distribute, and possessing a firearm in furtherance of a drug trafficking crime. The convictions were based on evidence found during a search of his apartment, including drugs, scales, and a firearm. Kennedy's prior convictions for burglary and drug offenses led to his classification as an armed career criminal and a career offender, resulting in a guidelines range of 420 months to life imprisonment. He received a below-guidelines sentence of 360 months.The United States District Court for the Middle District of Georgia admitted text messages and expert testimony over Kennedy's objections and found sufficient evidence to support his convictions. The court also determined that Kennedy's prior convictions qualified him for the ACCA and career offender enhancements, despite his arguments to the contrary.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the district court's decisions. The appellate court held that the text messages were admissible as they were directly related to the charged offense and not subject to Rule 404(b). The expert testimony was also deemed appropriate as it did not violate Rule 704(b). The court found sufficient evidence to support Kennedy's convictions, including testimony linking him to the drugs and firearm.The appellate court also upheld the ACCA enhancement, finding that Kennedy's prior burglary convictions qualified as predicate offenses. The court rejected Kennedy's arguments against the career offender enhancement, affirming that his prior drug convictions met the criteria. Finally, the court found Kennedy's sentence to be both procedurally and substantively reasonable, given the circumstances and the guidelines range. The sentence was affirmed. View "United States v. Kennedy" on Justia Law

Acorda Therapeutics, Inc. developed Ampyra®, a drug for multiple sclerosis, and had a licensing agreement with Alkermes PLC, which owned a patent for Ampyra’s active ingredient. The patent expired in July 2018, but Acorda continued to make royalty payments to Alkermes until July 2020, when it began making payments under protest. Acorda initiated arbitration in July 2020, seeking a declaration that the royalty provisions were unenforceable post-patent expiration and a refund of royalties paid since July 2018.The arbitration tribunal agreed that the royalty provisions were unenforceable but ruled that Acorda could only recoup payments made under formal protest. Acorda then petitioned the United States District Court for the Southern District of New York to confirm the tribunal’s rulings except for the denial of recoupment of unprotested payments. The district court rejected Acorda’s arguments, which were based on the tribunal’s alleged “manifest disregard” of federal patent law and a non-patent-law principle, and confirmed the award in full.Acorda appealed to the United States Court of Appeals for the Federal Circuit, seeking to reverse the district court’s denial of the 2018–2020 recoupment. The Federal Circuit concluded that it lacked jurisdiction over the appeal because Acorda’s petition did not necessarily raise a federal patent law issue. The court determined that the petition’s request for confirmation did not require a determination of federal patent law, and the request for modification presented alternative grounds, one of which did not involve patent law. Consequently, the Federal Circuit transferred the case to the United States Court of Appeals for the Second Circuit. View "Acorda Therapeutics, Inc. v. Alkermes PLC" on Justia Law

Frederick Brewer was convicted by a jury of distributing fentanyl, possessing with intent to distribute fentanyl, and participating in a conspiracy to distribute fentanyl. The jury, however, found that the government did not prove beyond a reasonable doubt that Brewer's conspiracy and possession convictions involved at least 40 grams of fentanyl. Brewer moved for acquittal twice, arguing insufficient evidence, but the district court denied both motions. Brewer appealed, contending that the evidence was insufficient to support his convictions and that the district court erred in calculating the drug quantity for sentencing.The United States District Court for the Eastern District of Wisconsin initially denied Brewer's motions for acquittal. The court found sufficient evidence to establish that Brewer and his co-defendant, Don James, Jr., were engaged in a conspiracy to distribute fentanyl, rather than a simple buyer-seller relationship. The court also rejected Brewer's argument that the jury's finding regarding the drug quantity undermined the guilty verdicts. At sentencing, the district court attributed 1.2 to 4 kilograms of fentanyl to Brewer, resulting in a higher base offense level and a sentence of 144 months in prison followed by 120 months of supervised release.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decisions. The appellate court held that the evidence was sufficient to support Brewer's convictions for conspiracy, possession, and distribution of fentanyl. The court also upheld the district court's drug quantity determination for sentencing purposes, noting that the sentencing court could consider conduct underlying acquitted charges if proven by a preponderance of the evidence. Brewer's conviction and sentence were affirmed. View "United States v. Brewer" on Justia Law

The Association for Accessible Medicines (AAM), representing generic drug manufacturers, challenged a Minnesota law regulating drug prices, Minn. Stat. § 62J.842, arguing it violated the dormant Commerce Clause. The law prohibits manufacturers from imposing excessive price increases on generic or off-patent drugs sold in Minnesota. The district court granted AAM's motion for a preliminary injunction, finding the law likely violated the dormant Commerce Clause.The United States District Court for the District of Minnesota concluded that AAM was likely to succeed on the merits of its claim, faced a threat of irreparable harm, and that the balance of harms and public interest factors were neutral. Minnesota appealed, contesting the likelihood of success on the merits and the balance of harms/public interest.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s ruling for abuse of discretion and its legal conclusions de novo. The court found that the Minnesota law had the impermissible extraterritorial effect of controlling prices outside the state, similar to laws previously struck down by the Supreme Court. The court rejected Minnesota's argument that the law did not control out-of-state prices, noting that it effectively regulated out-of-state transactions if the drugs ended up in Minnesota.The Eighth Circuit affirmed the district court’s decision, agreeing that AAM was likely to succeed on the merits of its dormant Commerce Clause claim. The court also found no abuse of discretion in the district court’s assessment of the balance of harms and public interest, noting that protecting constitutional rights is always in the public interest. The preliminary injunction against the Minnesota law was upheld. View "Ass'n for Accessible Medicines v. Ellison" on Justia Law

On March 15, 2022, law enforcement responded to a drug overdose in Rapid City, South Dakota, where they found K.S. conscious but sluggish after receiving Narcan. Officers suspected two individuals, including a woman with purple hair, of distributing fentanyl to K.S. Surveillance at a hotel led to a traffic stop of a red Ford Fiesta, where officers found Anthony Ward in the backseat. Ward was arrested for false impersonation after providing false names. A search of the vehicle revealed drugs, a stolen gun, and cash. Ward was charged with distribution of a controlled substance resulting in serious bodily injury and conspiracy to distribute fentanyl.The United States District Court for the District of South Dakota denied Ward's motions to suppress evidence from the traffic stop and to dismiss the indictment for failure to preserve evidence. After a five-day trial, the jury convicted Ward on both counts, and the court imposed concurrent 360-month sentences. Ward appealed the district court's decisions.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court upheld the district court's denial of Ward's motions to suppress and dismiss, finding no unreasonable extension of the traffic stop and no bad faith in the handling of evidence. The court also found sufficient evidence to support Ward's convictions. The court concluded that the evidence showed Ward distributed fentanyl that caused K.S.'s serious bodily injury and that Ward was involved in a conspiracy to distribute fentanyl. The judgment of the district court was affirmed. View "United States v. Ward" on Justia Law