For The Defense, October 2010 - DRI Today

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D R U G A N D M E D I C A L D E V I C Efines. The federal government alleged thatfrom 2005 until 2008 the defendants marketedand promoted mixing each of two ofits bone-growth stimulating products witha third product, a bone void filler, for bonerepairs, which the FDA had not approved,to boost sales. The two bone growth stimulatingproducts were approved only underFDA humanitarian device exemptionsThe FDA plans toexpand prosecutions ofpharmaceutical and foodindustry executives aspart of efforts to refocusits criminal division.(HDE) with a stated, permissible UnitedStates market of 4,000 people, and the otherproduct had clearance under section 510(k)of the Food, Drug, and Cosmetic Act.The government alleged that adverseevents resulted from the promoted offlabeluse of the products, which includedmigration of the combined products fromthe wound site, revision surgery, removalof bone growth, drainage, impaired woundhealing, and inflammation. The governmentfurther alleged that the promotion ofthe products to surgeons and surgical staffcontinued another two years, even thoughStryker knew about the adverse events,did not have FDA approval for the combineduse, which accounted for the vastmajority of sales of the products with theHDE approval, and admonitions of potentialexposure to the company and criminalprosecution of individuals for promotingthe mixture. The indictment also claimedthat despite a recommendation by a seniorsales manager that the company cease promotingthis use and notify surgeons in a“Dear doctor” letter about adverse experiences,two of the indicted sales managersargued against disclosure, in part, to avoidthe adverse effect on sales and the anger ofsurgeons, as well as to keep institutionalreview boards from pulling the products.50 n For The Defense n October 2010In addition, the indictment alleged thatthe president engaged in a scheme to concealthat Stryker sold the products withthe HDE approvals to more than 4,000patients per year. To that end, the governmentalleged that the president providedfalse information that Stryker could notaccurately estimate usage per patient to anoutside law firm to obtain a “bogus legalopinion” and obtained advice on how toword an annual report to the FDA, basedon the false information provided by thepresident. See Indictment in United Statesv. Stryker Biotech, LLC, et al., No. 09-CR-10330-GAO, Oct. 28, 2009 (D. Mass.). Theparties reported to the federal court onSeptember 14, 2010, that they had discussedthe possibility of an early resolutionof the case without trial but did notbelieve that any such resolution could beachieved. There have been various civillawsuits pending against Stryker since theinvestigation began. Stryker Biotech alsorecently agreed in a consent judgment topay $1.35 million to the Commonwealthof Massachusetts to resolve state allegationsof improper marketing of its bonegrowth products and related allegations,as reported by the Massachusetts AttorneyGeneral on August 26, 2010.Stryker executives are not the onlyexecutives facing criminal prosecution.In June 2009, another company, Synthes,Inc., a medical device manufacturer, andits wholly owned subsidiary, Norian Corporation,and four executives of Synthesentities, a president, senior vice presidentof global strategy, vice president of operations,and director of regulatory and clinicalaffairs, were indicted under allegationsof organizing and sponsoring an illegal testmarket for bone cement products for spinalrepairs rather than obtaining an investigationaldevice exemption (IDE) from theFDA. According to the indictment, in internalcommunications recommending thatSynthes pursue an IDE, which it did not,Synthes personnel stated that the company“is at an increased legal risk with regards toproduct liability and medical malpractice.”The allegations in this case include aclaim that three patients died after applicationof an unapproved mixture of thebone cement products to the spine duringprocedures when company sales representativeswere present. The governmentmaintains that Synthes failed and refusedto comply with the FDA’s Medical DeviceReporting (MDR) requirement regardingthe first death, concealing it from the FDA,spine surgeons, and from its own salesforce. The government further maintainsthat the company’s reports for the secondand third deaths were brief, vague, and didnot mention that the product was used offlabel,to conceal the offlabel use from theFDA and spine surgeons. The indictmentalso notes that the defendants concealedthat the label of one of the products specificallymentioned that it was not intendedfor the test treatment.Norian also faces 52 counts of conspiracyto defraud the United States and its agenciesby impeding, impairing, and defeatingthe lawful functions of the FDA toprotect the health and safety of the public,making false statements, concealing materialfacts in connection with the FDA, andintroducing into interstate commerce adulteratedand misbranded medical deviceswith the intent to defraud. The parent company,Synthes, is charged with 44 countsof introducing into interstate commerceadulterated and misbranded products thatlacked adequate directions for use withoutqualifying for exemption and securing therequired premarket approvals permittingmarketing for the intended uses. The executiveswere each charged with one count ofintroducing adulterated and misbrandedproducts. The indictment was based onan investigation that began in 2006. SeeIndictment in United States v. Norian Corporation,Synthes, Inc., et al., No. 2:09-cr-00403-LDD, June 16, 2009 (E.D. Penn.).The FDA Plans to IncreaseCriminal ProsecutionsAs mentioned, the FDA plans to expandprosecutions of pharmaceutical and foodindustry executives as part of efforts torefocus its criminal division in response tocriticism in a recent government report. Ina recent letter to Senator Charles Grassley,the ranking member of the Senate FinanceCommittee, the FDA described how itplanned to respond to the GovernmentAccountability Office (GAO) report titled,Food and Drug Administration: ImprovedMonitoring and Development of PerformanceMeasures Needed to Strengthen Oversightof Criminal Misconduct Investigations.
U.S. Gov’t Accountability Office, GAO-10-221 (2010), http://www.gao.gov/products/GAO-10-221. The report raised “concerns aboutthe oversight of the Office of CriminalInvestigations (OCI) by the FDA, in particularthe lack of performance measures toassess OCI’s success.” In the letter to SenatorGrassley, FDA Commissioner MargaretHamburg responded that the FDA wasputting in place “significant efforts thataddress the issues.” Letter from MargaretA. Hamburg, Comm., U.S. Food and DrugAdmin., to Sen. Charles A. Grassley (Mar.4, 2010). The FDA indicated that it planned“to increase the appropriate use of misdemeanorprosecutions… to hold corporateofficials responsible.” Id. Under a theoryof strict liability, the government assertedthat it had authority to prosecute corporateexecutives and that under that theory thegovernment did not have “to show intentto defraud.” Alicia Mundy, FDA CriminalDivision to Increase Prosecutions, Mundy,Wall St. J., Mar. 4, 2010, http://online.wsj.com/article/SB10001424052748703862704575099942109582112.html.Under a theory of strict liability, a defendantdoes not have to participate in oreven have knowledge of a violation; rather,a jury must find that a defendant had a “responsiblerelation” to the situation, and thedefendant had authority and responsibilityto address the conditions based on his or herposition. See United States v. Park 421 U.S.658, 673–74 (1975). The government mustshow that a drug or medical device wasadulterated or misbranded and shipped ininterstate commerce. 21 U.S.C.A. §331. Althoughonly a misdemeanor violation, iffound guilty, a person may be imprisonedfor up to one year and be subject to a monetaryfine. 21 U.S.C.A. §333. If a personcommits such a violation with the intent todefraud or mislead, that person can be imprisonedfor up to three years or fined up to$10,000, or both. Id. Companies may alsobe subject to large monetary penalties andother penalties. 21 U.S.C.A. §333.RecommendationsThe specter of a criminal action can rearits ugly head in many ways. Past criminalactions, detection of potential pastor ongoing criminal activity, governmentinvestigations, indictments against lowlevelemployees, and full, ongoing criminalprosecutions against past or currentcompany executives and the company allcan become situations that a civil litigatormust contend with.When potential or actual criminalactions are involved, you must heightenyour case evaluation. Following are 10 generalrecommendations for the civil litigatorto consider when confronting potential oractual criminal actions.Evidence DatabaseDeposition VideoManagementPocketVideo forDepositionsScanning and ImagingElectronic BriefsActively Preserve EvidenceOne recent case offers a cautionary notesignaling the need to take steps to preserveevidence, which can be difficultwith numerous disparate and geographicallydiverse actors involved. Even wellintentionedactors can find themselveswith “the short end of the stick” when theyact with apparently good intentions afterevidence has been destroyed.In the sentencing memorandum in arecent, well-known, criminal action againsta regional sales manager of a pharmaceuticalcompany, the government notedthe irony that the manager had been singledout. She was the lone sales managercharged with offlabel promotion, eventhough she was not the only employeeengaged in this activity. When she heardin September 2004 that three sales representativesin one of her districts haddeleted information from their computers,she immediately reported this informationto her direct superior. Her good faithact, reporting this to her supervisor, likelyled to the government investigation thatfocused on her region. She even testifiedvoluntarily before the federal grand jurywithout requesting immunity and readilysigned tolling agreements requestedby the government. Unfortunately for thisemployee, her cooperation did not dissuadethe government from charging her with offlabelpromotion. The charge was a strict liabilityoffense similar to the strict liabilityoffenses that the FDA recently stated thatit would pursue more aggressively. Crimi-CommunicationtechnologySeamless delivery in the courtroomis critical.Our technology consultants have an average ofover 10 years experience in the courtroom.They will support you throughout yourengagement, providing expertise in evidencedatabase development, video management,warroom logistics and trial support.Your trial team will have the ultimate flexibilityin the courtroom with a comprehensivedatabase operated by one of the mostexperienced professionals in the industry.1.800.781.3591 / www.resonantlm.comWASHINGTON D.C. | PRINCETON | SAN FRANCISCO | DALLASFor The Defense n October 2010 n 51
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