Justia Drugs & Biotech Opinion Summaries

Articles Posted in Government & Administrative Law
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The case revolves around a dispute over a medical marijuana cultivation license issued by the Arkansas Medical Marijuana Commission to Bennett Scott “Storm” Nolan II. 2600 Holdings, LLC, an unsuccessful applicant for the same license, filed a lawsuit against the Commission and other state entities, alleging that Nolan's application did not meet the minimum merit selection criteria and that the Commission violated its own rules and the Arkansas Constitution in awarding the license to Nolan. Nolan was not initially named as a defendant or joined as a party in the lawsuit.The Pulaski County Circuit Court denied Nolan's multiple motions to join the lawsuit as an indispensable party under Rule 19(a) of the Arkansas Rules of Civil Procedure and granted summary judgment in favor of 2600 Holdings. The court ruled that the Commission had exceeded its discretion and violated the Arkansas Constitution and its own rules in awarding the license to Nolan.On appeal, the Supreme Court of Arkansas reversed the lower court's decision, finding that Nolan was indeed an indispensable party under Rule 19(a)(2). The court held that the lower court erred in not joining Nolan as an indispensable party to the litigation. As a result, the court vacated the order granting summary judgment to 2600 Holdings and remanded the case for further proceedings. The court did not address Nolan's remaining issues as they were deemed moot due to the reversal and remand. View "Nolan v. 2600 Holdings, LLC" on Justia Law

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In 2019, MO CANN Do, Inc. (MCD) applied for a medical marijuana cultivation license in Missouri. However, the Department of Health and Senior Services (DHSS) rejected MCD's application as it failed to include a certificate of good standing demonstrating its authorization to operate as a business in Missouri. An administrative hearing commission upheld DHSS's decision, and MCD appealed to the circuit court, which also affirmed the decision.The Supreme Court of Missouri found that MCD's application did not meet the minimum standards for licensure, as it failed to provide a certificate of good standing from the Secretary of State, as required by DHSS's regulations. MCD argued that its certificate of incorporation satisfied the standard requiring proof of authorization to operate as a business in Missouri, but the Court disagreed, stating that the regulatory language was unambiguous and the certificate of good standing was a specific requirement.MCD further argued that DHSS waived the certificate of good standing requirement by failing to specify it in the deficiency letter sent to MCD. The Court rejected this argument, stating that DHSS never affirmatively waived the deficiencies in MCD's application.Lastly, MCD claimed that DHSS should be estopped from denying its application based on the missing certificate of good standing due to its failure to notify MCD of this specific deficiency. The Court denied this claim, stating that it is generally inappropriate to estop governmental agencies tasked with administrating licensure in highly regulated industries, which include the marijuana industry. In conclusion, the Supreme Court of Missouri affirmed the circuit court’s judgment. View "MO CANN Do, Inc. vs. Missouri Department of Health and Senior Services" on Justia Law

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This case was before the United States Court of Appeals for the Fourth Circuit where the City of Huntington and Cabell County Commission (plaintiffs) brought a suit against AmerisourceBergen Drug Corporation, Cardinal Health, Inc., and McKesson Corporation (defendants), three distributors of opioids. The plaintiffs alleged that these companies perpetuated the opioid epidemic by repeatedly shipping excessive quantities of opioids to pharmacies, thus creating a public nuisance under West Virginia common law. The district court ruled in favor of the distributors, holding that West Virginia’s common law of public nuisance did not cover the plaintiffs’ claims.After a bench trial in 2021, the district court held that the common law of public nuisance in West Virginia did not extend to the sale, distribution, and manufacture of opioids. The court found that the application of public nuisance law to the sale, marketing, and distribution of products would invite litigation against any product with a known risk of harm, regardless of the benefits conferred on the public from proper use of the product. The court also rejected the plaintiffs’ proposed remedy, a 15-year “Abatement Plan” developed by an expert in opioid abatement intervention. The court held that this relief did not qualify as an abatement as it did not restrict the defendants' conduct or their distribution of opioids but generally proposed programs and services to address the harms caused by opioid abuse and addiction.The plaintiffs appealed the decision to the United States Court of Appeals for the Fourth Circuit, which certified the following question to the Supreme Court of Appeals of West Virginia: Under West Virginia’s common law, can conditions caused by the distribution of a controlled substance constitute a public nuisance and, if so, what are the elements of such a public nuisance claim? View "City of Huntington v. Amerisourcebergen Drug Corporation" on Justia Law

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The United States Court of Appeals for the Second Circuit heard a case initiated by Adam Hart, who filed a qui tam action under the False Claims Act (FCA) against pharmaceutical distributor McKesson. Hart alleged that McKesson provided business management tools to its customers for free in exchange for commitments to purchase drugs, which he claimed violated the federal anti-kickback statute (AKS) and several analogous state laws. The district court dismissed Hart's FCA claim, determining he failed to allege McKesson acted "willfully" as required by the AKS.On appeal, the Second Circuit held that to act "willfully" under the AKS, a defendant must knowingly act in a way that is unlawful. The court found that Hart failed to provide sufficient facts to meet this standard. However, the court disagreed with the district court's assertion that Hart's state claims were premised solely on a violation of the federal AKS. Consequently, the Second Circuit affirmed the dismissal of Hart’s federal FCA claim, vacated the dismissal of the remaining state claims, and remanded for further proceedings. View "United States, ex rel. Hart v. McKesson Corp." on Justia Law

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The case involves appellant Soleiman Mobarak, who appealed the judgment of the Tenth District Court of Appeals dismissing his petition for a writ of mandamus against appellee, Franklin County Court of Common Pleas Judge Jeffrey M. Brown. Mobarak had sought to vacate his criminal convictions for lack of subject-matter jurisdiction in the trial court. The court of appeals held that the trial court had jurisdiction over Mobarak’s criminal case and that Mobarak had an adequate remedy in the ordinary course of the law.In 2012, Mobarak was indicted on charges of engaging in a pattern of corrupt activity, aggravated trafficking in drugs, and aggravated possession of drugs. The charges alleged that Mobarak had possessed and sold a controlled-substance analog commonly known as bath salts. In his petition, Mobarak asserted that the trial court lacked subject-matter jurisdiction over his criminal case on several grounds including that there was no statute prohibiting the possession or sale of bath salts at the time his offenses were alleged to have occurred, and that the controlled-substance-analogs law was unconstitutionally vague.The Supreme Court of Ohio affirmed the Tenth District Court of Appeals' judgment dismissing Mobarak’s petition. The court held that Mobarak’s petition failed to state a mandamus claim because he had an adequate remedy in the ordinary course of the law and failed to show that the trial court had patently and unambiguously lacked jurisdiction over his criminal case. The court found that by virtue of the Ohio Constitution and R.C. 2931.03, the trial court had jurisdiction over Mobarak’s criminal case. The court also noted that Mobarak’s arguments were similar to those raised and rejected in his prior appeals. The court stated that extraordinary writs may not be used as a substitute for an otherwise barred second appeal or to gain successive appellate reviews of the same issue. View "State ex rel. Mobarak v. Brown" on Justia Law

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In the case of Wages and White Lion Investments, L.L.C., doing business as Triton Distribution; Vapetasia, L.L.C., versus the Food & Drug Administration, the court found that the FDA acted arbitrarily and capriciously in its denial of Premarket Tobacco Product Applications (PMTAs) for flavored e-cigarette products.The petitioners, Triton Distribution and Vapetasia, are manufacturers of flavored e-cigarette liquids. They filed PMTAs for their products, as required by the Family Smoking Prevention and Tobacco Control Act, which prohibits the sale of any “new tobacco product” without authorization from the FDA. The FDA, after issuing detailed guidance on the information it required for approval of e-cigarette products, subsequently denied all flavored e-cigarette applications, including those of the petitioners, on the grounds that they failed to predict new testing requirements imposed by the FDA without notice.The court found that the FDA had failed to provide the manufacturers with fair notice of the rules, had not acknowledged or explained its change in position, and had ignored the reasonable and serious reliance interests that manufacturers had in the pre-denial guidance. Furthermore, the FDA attempted to cover up its mistakes with post hoc justifications at oral argument.As a result, the court granted the petitions for review, set aside the FDA's marketing denial orders, and remanded the matters to the FDA. The court rejected FDA's argument that even if it arbitrarily and capriciously denied petitioners’ applications, that error was harmless, stating that the harmless error doctrine is narrow and does not apply to discretionary administrative decisions. The court also rejected FDA's contention that it gave manufacturers fair notice of their obligations to perform long-term scientific studies in its pre-denial guidance documents. View "Wages and White Lion Invest v. FDA" on Justia Law

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Vepuri is the de facto director of KVK-Tech, a generic drug manufacturer. He employed Panchal as its director of quality assurance. KVK-Tech manufactured and sold Hydroxyzine, a prescription generic drug used to treat anxiety and tension. The government alleges that Vepuri, Panchal, and KVK-Tech sourced active ingredient for the Hydroxyzine from a facility (DRL) that was not included in the approvals that they obtained from the FDA and that they misled the FDA about their practices.An indictment charged all three defendants with conspiracy to defraud and to commit offenses against the United States and charged KVK-Tech with an additional count of mail fraud. The district court dismissed the portion of the conspiracy charge that alleges that the three conspired to violate the Food, Drug, and Cosmetic Act (FDCA), which prohibits introducing a “new drug” into interstate commerce unless an FDA approval “is effective with respect to such drug,” 21 U.S.C. 355(a).The Third Circuit affirmed, rejecting an argument that a deviation from the approved drug application means that the approval is no longer effective. The approval ceases being effective only when it has been withdrawn or suspended. The indictment does not include any allegations that the KVK-Tech Hydroxyzine manufactured with active ingredients from DRL had a different composition or labeling than the KVK-Tech Hydroxyzine with the effective approval. View "United States v. Vepuri" on Justia Law

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The Butter! Spray is a butter-flavored vegetable oil dispensed in pump-action squirt bottles with a spray mechanism. The front label on the product states that the Butter! Spray has 0 calories and 0 grams of fat per serving. Plaintiffs are a class of consumers who brought their lawsuit against the then-manufacturer, Unilever United States, Inc., contending that the product’s label makes misrepresentations about fat and calorie content based on artificially low serving sizes. The district court found that Plaintiffs failed to plausibly allege that Butter! Spray was not a “spray type” fat or oil under Food and Drug Administration (FDA) regulations. The district court further held that the FDCA preempted plaintiffs’ serving size claims.   The Ninth Circuit affirmed the district court’s Fed. R. Civ. P. 12(b)(6) dismissal. The panel held that, as a matter of legal classification, Butter! Spray was a “spray.” In common parlance, a “spray” refers to liquid dispensed in the form of droplets, emitted from a mechanism that allows the product to be applied in that manner. In addition, the notion that Butter! Spray could be housed under the FDA’s legal classification for “butter” is implausible. The panel also rejected Plaintiffs’ argument that Butter! Spray is a “butter substitute” based on how it is marketed so it should be treated as “butter” for serving size purposes, too. The court explained that because Plaintiffs’ challenge to the Butter! Spray serving sizes would “directly or indirectly establish” a requirement for food labeling that is “not identical” to federal requirements, the FDCA preempts their serving size claims. View "KYM PARDINI, ET AL V. UNILEVER UNITED STATES, INC." on Justia Law

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The Food and Drug Administration (“FDA”) approved mifepristone to be marketed with the brand name Mifeprex under Subpart H (the “2000 Approval”). In January 2023, FDA approved a modified REMS for mifepristone, lifting the in-person dispensing requirement.  Plaintiffs (physicians and physician organizations) filed a suit against FDA, HHS, and a several agency heads in the official capacities. Plaintiffs challenged FDA’s 2000 Approval of the drug and also requested multiple grounds of alternative relief for FDA’s subsequent actions. Plaintiffs moved for a preliminary injunction ordering FDA to withdraw or suspend (1) FDA’s 2000 Approval and 2019 Generic Approval, (2) FDA’s 2016 Major REMS Changes, and (3) FDA’s 2021 Mail-Order Decision and its 2021 Petition Denial of the 2019 Citizen Petition. The district court entered an order staying the effective date of the 2000 Approval and each of the subsequent challenged actions.   The Fifth Circuit granted Defendants’ motions for a stay pending appeal. The court wrote that at this preliminary stage, and based on the court’s necessarily abbreviated review, it appears that the statute of limitations bars Plaintiffs’ challenges to the Food and Drug Administration’s approval of mifepristone in 2000. However, Plaintiffs brought a series of alternative arguments regarding FDA’s actions in 2016 and subsequent years. And the district court emphasized that its order separately applied to prohibit FDA’s actions in and after 2016 in accordance with Plaintiffs’ alternative arguments. As to those alternative arguments, Plaintiffs’ claims are timely. Defendants have not shown that Plaintiffs are unlikely to succeed on the merits of their timely challenges. For that reason, Defendants’ motions for a stay pending appeal are denied in part. View "Alliance Hippocratic Medicine v. FDA" on Justia Law

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The Supreme Court affirmed the order of the circuit court dismissing Appellants' complaint alleging that the Arkansas Medical Marijuana Commission had granted a marijuana cultivation license to a corporate entity that had been dissolved, holding that the circuit court correctly dismissed this appeal on the merits.Appellants, existing cultivation license holders, challenged the Commission's decision to allegedly grant a license to a dissolved corporate entity, arguing that the circuit court erred by holding that it lacked subject-matter jurisdiction and wrongly held that Appellants lacked standing. The Supreme Court reversed, holding that the circuit court (1) erred by not finding that it lacked subject-matter jurisdiction and that Appellants lacked standing; but (2) properly dismissed the complaint because it failed to allege facts sufficient to mount the State's sovereign immunity defense. View "Osage Creek Cultivation, LLC v. Ark. Dep't of Finance & Administration" on Justia Law