Justia Drugs & Biotech Opinion Summaries

The case involves a Massachusetts psychiatrist who owned and operated a clinic providing treatment for addiction with imported drugs. The drugs included naltrexone and disulfiram in forms not approved by the FDA for use in the United States. The shipments were brought in from Hong Kong and falsely described on import documents as “plastic beads in plastic tubes,” with their value understated. The government charged the defendant with several crimes, including international money laundering, unlawful importation of merchandise, and receipt and delivery of misbranded drugs. The jury found the defendant guilty on some counts but acquitted him on others, including all counts against his wife.The United States District Court for the District of Massachusetts conducted the trial. After the jury’s verdict, the court sentenced the defendant to 36 months’ imprisonment on each count, to be served concurrently, and calculated the sentence using the fraud guideline in the United States Sentencing Guidelines. The defendant appealed, arguing that the district court erred in its evidentiary rulings, in admitting or excluding certain testimony, and in its application of the Sentencing Guidelines.The United States Court of Appeals for the First Circuit reviewed the case. It affirmed the defendant’s convictions, finding no reversible error in the district court’s evidentiary decisions or in its exclusion of expert testimony. The appellate court vacated the sentence for the misdemeanor misbranding conviction because it exceeded the statutory maximum. The court retained jurisdiction over the appeal and remanded to the district court for clarification regarding the application of the fraud guideline, specifically instructing the lower court to explain the basis for its use of that guideline and to address the impact of recent amendments related to acquitted conduct. View "US v. Shafa" 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

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

The First Circuit affirmed the district court’s dismissal of this putative class action alleging violations under sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The district court concluded that the initial amended complaint failed to meet the heightened pleading requirements of the Private Securities Litigation Reform Act (PSLRA). Thereafter, the court denied Plaintiffs’ subsequent motion to vacate the judgment and for leave to file a second amended complaint to include purportedly new evidence. The First Circuit held, on de novo review, that (1) the initial amended complaint failed to plead particularized facts giving rise to a strong inference of scienter, as required by the PSLRA; and (2) the district court did not abuse its discretion in denying the motion to vacate the judgment and for leave to file a second amended complaint. View "In re Biogen Inc. Securities Litigation" on Justia Law

Zafgen Inc.’s investors (Investors) brought a securities fraud class action suit against Zafgen and its Chief Executive Officer (collectively, Defendants) following a significant drop in the share price of the company. Specifically, Investors alleged that the Defendants made several misleading statements regarding Zafgen’s anti-obesity drug Beloranib. The district court granted Defendants’ motion to dismiss, concluding that the complaint did not contain facts giving rise to a “cogent and compelling” inference of scienter as required under the Private Securities Litigation Reform Act. The First Circuit affirmed, holding that the district court properly dismissed Investors’ claims because the complaint, considered as a whole, did not present allegations giving rise to a cogent and compelling inference of scienter. View "Brennan v. Zafgen, Inc." on Justia Law

Amphastar Pharmaceuticals Inc. and its wholly owned subsidiary (collectively, Amphastar) and Sandoz Inc. were competitors in the U.S. market for generic enoxaparin, an anticoagulant. Momenta Pharmaceuticals Inc. served as Sandoz’s contract laboratory. Amphastar filed a complaint alleging antitrust violations by Sandoz and Momenta based on Defendants’ alleged misrepresentations to the United States Pharmacopeial Convention, a private standard-setting organization charged with ensuring the quality of drugs. Defendants brought an infringement suit against Amphastar, resulting in a temporary restraining order (TRO) and preliminary injunction prohibiting Amphastar from selling enoxaparin. The preliminary injunction was later vacated, but it did prevent Amphastar from selling its generic enoxaparin for approximately three months. Amphastar then filed this suit under the Sherman Act seeking damages for lost profits during the pendency of the TRO and injunction. The district court dismissed the complaint under the Noerr-Pennington doctrine, which immunizes good-faith petition of government entities from antitrust liability. The First Circuit reversed, holding that the district court erred in applying Noerr-Pennington. Remanded for the district court to consider Defendants’ other arguments in the first instance. View "Amphastar Pharmaceuticals, Inc v. Momenta Pharmaceuticals, Inc." on Justia Law

In 2009, Pfizer, settled claims that it had violated the False Claims Act (FCA), 31 U.S.C. 3729, and entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services. Months later, Booker and Hebron, former Pfizer sales representatives, brought a qui tam action, allegedly on behalf of the United States and several states, asserting that Pfizer had continued to violate the FCA and state analogues. They alleged that Pfizer had continued to knowingly induce third parties to file false claims for payment for Pfizer drugs with government programs like Medicaid by marketing the drug Geodon for off-label uses, in violation of 21 U.S.C. 301, and paying doctors kickbacks for prescribing the drugs Geodon and Pristiq, in violation of the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), (g). They also alleged that Pfizer had violated the FCA "reverse false claims" provision, 31 U.S.C. 3729(a)(1)(G), by failing to pay the government money owed it under Pfizer's Agreement with HHS, and that Pfizer had violated the FCA's anti-retaliation provision, by terminating Booker's employment. All of these claims were resolved against relators, one on a motion to dismiss and the rest on summary judgment. None of the sovereigns intervened. The First Circuit affirmed the merits decisions and found no error in its management of discovery. The court found relators’ data “woefully inadequate to support their FCA claim.” View "Booker v. Pfizer, Inc." on Justia Law

Plaintiff filed filed a qui tam action against a corporation and its subsidiary, both of whom manufacture and market medical devices, alleging that Defendants violated the False Claims Act in selling two particular medical devices to hospitals that seek reimbursement from the federal government through, for example, the Center for Medicare and Medicaid Services. Through two subsequent amendments, both with permission of the court, Plaintiff added several defendants and retooled his claims. Plaintiff then requested leave to amend fourth amended complaint. The district court applied the “good cause” standard from Fed. R. Civ. P. 16(b) to that request and struck the amended complaint. The First Circuit originally held that the district court should have evaluated Plaintiff’s fourth amended complaint under the standard set forth in Fed. R. Civ. P. 15(a). On remand, the district court concluded that Plaintiff’s desired amendment failed under that standard. The First Circuit affirmed, holding that Plaintiff’s request for leave to file his fourth amended complaint was properly denied as futile because none of the claims in Plaintiff’s fourth amended complaint was adequately pled. View "D'Agostino v. EV3, Inc." on Justia Law

Plaintiff brought a qui tam action against Takeda Pharmaceutical Company and its affiliates (collectively, Takeda) and Eli Lilly and Company (Eli Lilly) (collectively, Defendants) under the False Claims Act (FCA) and the False Claims Acts of several different states, alleging that Defendants engaged in an illegal marketing campaign for Actos, a brand name drug approved by the FDA for improving blood sugar control in adults with Type 2 diabetes, and used illegal kickbacks to support that campaign. Plaintiff further alleged that through this campaign, Defendants knowingly caused third parties to submit false reimbursement claims to government entities for off-label uses of Actos. The district court dismissed Plaintiff’s claims, concluding that Plaintiff had failed to plead his claims with the particularity required by Fed. R. Civ. P. 9(b). The First Circuit affirmed, holding (1) the district court correctly dismissed Plaintiff’s complaint under Rule 9(b); and (2) the district court similarly did not err when it dismissed Plaintiff’s state claims with prejudice. View "Lawton v. Takeda Pharmaceutical Co." on Justia Law

AstraZeneca, a drug manufacturer that owns the patents covering Nexium, a prescription heartburn medication, sued Ranbaxy for patent infringement after Ranbaxy announced that it sought to market a generic version of Nexium. The two companies reached a settlement agreement under which Ranbaxy agreed to delay the launch of its generic until a certain date in return for various promises from AstraZeneca. Plaintiffs - pharmaceutical retail outlets and certified classes of direct purchasers and end payers - filed suit, arguing that the terms of the settlement agreements violated federal antitrust laws and state analogues. The jury found that although Plaintiffs had proved an antitrust violation, Plaintiffs had not shown that they suffered an antitrust injury that entitled them to damages. The First Circuit affirmed, holding (1) the district court did not commit reversible error in its evidentiary rulings, the formulation of the special verdict form and jury instructions, or its judgment as a matter of law on overarching conspiracy; and (2) the jury verdict rendered harmless any error that may have occurred during the summary judgment proceedings. View "In re Nexium Antitrust Litigation" on Justia Law