Justia Drugs & Biotech Opinion Summaries

The dispute centers on allegations by a Minnesota-based health insurer that several related pharmaceutical companies carried out an unlawful scheme involving the distribution and sale of repackaged and adulterated oncology drugs. The scheme allegedly involved breaking sterile seals on medication vials, pooling overfill amounts—which were not intended for patient use—and creating pre-filled syringes that were then sold to healthcare providers. These syringes were ultimately administered to cancer patients, including many insured under programs operated by the plaintiff. The defendants did not themselves submit claims for reimbursement, but the plaintiff asserts it paid for treatments using these adulterated drugs, unaware of their compromised quality.Prior to this lawsuit, the scheme was the subject of other civil actions and federal investigations, including qui tam actions and a federal criminal prosecution. The defendants disclosed these investigations in annual reports filed with the Securities and Exchange Commission and the events received media attention beginning in 2012. In 2017, a related company pleaded guilty to federal charges, admitting to the repackaging scheme, and paid significant fines and settlements. The plaintiff filed suit in 2023, asserting claims for common-law fraud, unjust enrichment, and violations of several Minnesota consumer protection statutes. The United States District Court for the District of Minnesota dismissed the complaint, finding the claims were barred by the applicable six-year statute of limitations, and that the plaintiff had failed to sufficiently plead fraudulent concealment to toll the limitations period.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s dismissal de novo. It concluded that publicly available disclosures and the plaintiff’s own allegations established that the plaintiff should have discovered its causes of action no later than 2016. Because the plaintiff did not file suit until 2023, its claims were untimely. The court affirmed the district court’s judgment, holding that all claims were barred by the statute of limitations. View "United HealthCare Services, Inc. v. AmerisourceBergen Corporation" on Justia Law

A pharmaceutical manufacturer participating in the federal 340B Drug Pricing Program challenged a Missouri law that prohibits manufacturers from restricting the delivery of discounted 340B drugs to contract pharmacies associated with covered entities. The manufacturer argued that its policy of limiting deliveries to only one contract pharmacy conflicted with Missouri’s statute, which requires delivery to all contract pharmacies designated by covered entities. The manufacturer sought declaratory and injunctive relief, claiming the Missouri statute violated the dormant Commerce Clause and was preempted by federal law.The United States District Court for the Western District of Missouri granted a motion to dismiss the manufacturer’s preemption claims, finding Missouri’s statute did not conflict with federal patent or drug exclusivity laws or the 340B Program, and that Eighth Circuit precedent foreclosed the field preemption argument. The court denied the motion to dismiss the dormant Commerce Clause claim, but ultimately denied the manufacturer’s motion for a preliminary injunction, concluding the manufacturer was unlikely to succeed on the merits of its claims, had not shown irreparable harm, and that the balance of equities and public interest weighed against preliminary relief.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s denial of preliminary injunction under the abuse of discretion standard. The appellate court affirmed the district court’s decision, holding that the Missouri statute regulates only in-state delivery of 340B drugs and does not impermissibly control extraterritorial commerce, discriminate against interstate commerce, or impose excessive burdens in relation to local benefits. The court also found the manufacturer’s preemption claims foreclosed by Eighth Circuit precedent and concluded the statute is neither field nor conflict preempted. The district court’s denial of preliminary injunctive relief was affirmed. View "Novartis Pharmaceuticals Corp. v. Hanaway" 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

Evan Brown Bull was convicted by a jury of conspiracy to distribute 500 or more grams of methamphetamine. The government presented evidence from thirteen witnesses and various forms of documentation, including videos and Facebook messages, detailing Brown Bull's drug dealings from 2016 to 2023. The Probation Office's Presentence Investigation Report (PSR) recommended a base offense level of 32, with adjustments that increased the total offense level to 40, resulting in an advisory guidelines sentencing range of 360 months to life imprisonment. Brown Bull objected to the PSR's findings and requested a downward variance to 180 months.The United States District Court for the District of South Dakota overruled Brown Bull's objections and applied three sentencing enhancements: a two-level increase for obstruction of justice, a four-level increase for being an organizer or leader of a criminal activity involving five or more participants, and a two-level increase for committing the offense as part of a pattern of criminal conduct engaged in as a livelihood. The court ultimately sentenced Brown Bull to 400 months imprisonment and five years of supervised release.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court's decision. The appellate court found no clear error in the district court's application of the sentencing enhancements. The court held that Brown Bull's pretrial jail messages and Facebook post constituted obstruction of justice, that he was an organizer or leader of the drug conspiracy, and that his criminal conduct was part of his livelihood. The court concluded that the district court's findings were supported by the evidence and upheld the 400-month sentence. View "United States v. Bull" on Justia Law

The Eighth Circuit affirmed the dismissal of relator's False Claims Act (FCA), 31 U.S.C. 3729 et seq., suit based on the public disclosure bar. Relator alleged that CSL Behring conspired with pharmacies to submit false claims to the United States for reimbursement for prescription drugs. The Eighth Circuit concluded that, viewed collectively, the public disclosures provided enough information about the participants in the scheme to directly identify the defendants and the subject drugs; the disclosures would have set the government squarely on the trail of the defendants' participation in the purported fraudulent reporting; and the essential elements of relator's claims -- the purported fraud -- were publicly disclosed prior to him filing suit. View "Lager v. CSL Behring" on Justia Law

Plaintiff filed a shareholder derivative action on behalf of Medtronic, Inc., against current and former directors and officers of Medtronic, and against Medtronic as a nominal defendant. Plaintiff's complaint alleged various bad acts and false and misleading statements stemming from Medtronic's alleged improper promotion to physicians of the "off-label" use of its "Infuse" product. The district court dismissed the action based on a report by a special litigation committee (SLC). The court concluded that defendants' motion to terminate the litigation based on the SLC report could not be construed as a motion under Rule 12(b)(6) nor one arising under Rule 56; the court agreed with the district court and the Eleventh Circuit that the closest fit for a motion to terminate in the Federal Rules was Rule 23.1(c); the proper standard of review was for an abuse of the district court's discretion; the district court did not err in deferring to the SLC under Minnesota's business judgment rule (BJR) where the SLC possessed a disinterested independence, and the SLC's investigative methodologies and procedures were adequate, appropriate, and pursued in good faith; and the district court did not abuse its discretion by denying plaintiff's motion for discovery. Accordingly, the court affirmed the judgment. View "Kokocinski v. Collins, Jr." on Justia Law