Top 10 Food And Drug Product Law Developments For By Anand Agneshwar and Paige Sharpe Arnold & Porter LLP

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1 Published by Appellate Law360, California Law 360, Food & Beverage Law360, Life Sciences Law360, New Jersey Law360, New York Law360, Product Liability Law360, and Public Policy Law360 on January 8, Top 10 Food And Drug Product Law Developments For By Anand Agneshwar and Paige Sharpe Arnold & Porter LLP Law360, New York (January 8, 2016, 11:31 AM ET) -- Well, that s it: another year is in the books. But as we embark on predictions and resolutions for 2016, we re also taking a look back at what we see as the most notable developments in product liability law in And so our countdown begins. 10. Bauman Shakes up Jurisdiction Jurisprudence The Supreme Court s ruling in Daimler AG v. Bauman[1] topped our list last year of product liability developments, because it reformulated the test for personal jurisdiction to far more limited circumstances. Under Bauman, general jurisdiction in most cases extends only to those states in which a corporation is incorporated or has its principal place of business.[2] While the significance of Bauman was immediately clear more than 400 lower courts cited the opinion in 2015 alone courts have grappled with the scope and precise application of the case. For example, the question of whether registering to do business in a state equates to consent to jurisdiction has met with mixed results.[3] Courts also have split on whether marketing and selling a product within a state is alone enough to establish specific jurisdiction over a corporate defendant.[4] Given the high stakes of personal jurisdiction law in products cases, we ll be keeping an eye on how Bauman jurisprudence develops in D.C. Circuit Provides Food for Thought in POM Wonderful In a closely watched decision on the FTC s advertising enforcement powers, the D.C. Circuit Court of Appeals in POM Wonderful LLC v. Federal Trade Commission[5] largely upheld the FTC s standard for what constitutes adequate scientific evidence to substantiate disease-related claims. Under the Federal Trade Commission Act (FTCA), advertising and promotional materials must be truthful, nonmisleading and substantiated.[6] The FTC has determined that competent and reliable scientific evidence requires statistically significant results from a randomized and well-controlled clinical trial (RCT), a position that the court upheld in POM. But, based on the facts of that case, the court rejected the FTC s requirement that POM have at least two RCTs before making a disease-related claim. Because the First Amendment protects truthful and nonmisleading speech, the court found that the FTC had failed adequately to justify a categorical floor of two RCTs for any and all disease claims. [7] While the decision was based on the factual record before the court, it sheds light on the level of substantiation that a company should consider before making a disease-related claim. 8. Tide Turns in Accutane Litigation in New Jersey State Court The Accutane litigation has been pending in Atlantic County since 2003, and those cases have been bitterly fought over the years. After Judge Nelson Johnson took over as mass torts judge in Atlantic County last year, however, the New Jersey litigation may finally be catching up with the rest of the country. Early in the year, Judge Johnson rejected the testimony of two experts whom he found to be cherry picking evidence rather than basing their opinions on reliable data.[8] The parties went on to agree that the ruling thwarted the claims of roughly 2,000

2 plaintiffs, or nearly a third of the pool. Then, in April, Judge Johnson granted summary judgment for defendants upon finding the post-april 2002 Accutane label adequate as a matter of law.[9] After so many years of hard-fought litigation, the defense must feel its persistence is finally paying off. 7. Alabama Falls in Line on Innovator Liability In 2014, the Alabama Supreme Court affirmed the state s status as an outlier on innovator liability, holding in Wyeth Inc. v. Weeks[10] that a branded manufacturer may be liable for injuries suffered by a plaintiff who ingested a generic version of the drug. That ruling proved short-lived, however. In May 2015, Alabama Governor Robert Bentley signed into law a bill that limits liability to entities in the chain of commerce for the product that allegedly caused injury.[11] In other words, a plaintiff must prove that the defendant designed, manufactured, sold or leased the specific product that allegedly caused the harm, meaning a generic drug cannot provide the basis for claims against the branded manufacturer. Note, however, that the law took effect six months after signature and is not retroactive. 6. District Court Clarifies Clear Evidence Standard for Conflict Preemption... In the first of three preemption decisions to make our list, the Southern District of California applied the clear evidence standard of Wyeth v. Levine[12] to find that conflict preemption precluded failure to warn claims when the FDA would have rejected the very warning that the plaintiffs advocated. The Supreme Court in Levine held that absent clear evidence that the FDA would not have approved a change, conflict preemption does not apply.[13] The plaintiffs in the Incretin-Based Therapies Products Liability Litigation[14] alleged that several diabetes drugs increased the risk of pancreatic cancer and that the drug labels should have referenced the risk. The defendants, however, pointed to seven different instances in which the FDA reviewed data and concluded that any causal connection between the drugs and pancreatic cancer was indeterminate. The FDA s failure to act coupled with its substantial review of the issue convinced the court that the FDA would have rejected the plaintiffs proposed labeling change and that conflict preemption thus applied. The decision is part of an emerging pattern of cases that breathes new life into the conflict preemption defense in the wake of Levine.[15] While First Circuit Extends Mensing Preemption to Branded Manufacturers... In the Celexa & Lexapro Marketing & Sales Practices Litigation,[16] the First Circuit faced the question of whether a branded manufacturer could be liable for omitting efficacy information from a label in violation of state law. In holding the plaintiffs claims to be preempted, the court extended the rationale of PLIVA Inc. v. Mensing,[17] which immunized generic manufacturers from liability based on failure to warn claims. The labeling change plaintiff sought in Celexa was based on data that the FDA reviewed before it approved the label. Accordingly, as in Mensing, the manufacturer could not independently change the label to comply with state law and the claims were preempted.[18] In addition to bringing branded manufacturers into the Mensing fold, the decision bolsters the preemption defense when plaintiffs argue that the FDA never would have approved a drug based on subsequently learned information And Sixth Circuit Does the Same for Bartlett Preemption In Yates v. Ortho-McNeil-Janssen Pharmaceuticals Inc.,[19] the Sixth Circuit became the first federal appellate authority to recognize impossibility preemption of design defect claims against brand-name drug manufacturers. As in Celexa, the court did so by extending protections

3 first afforded to generic manufacturers to branded manufacturers. The plaintiff in Yates alleged two design defects: post-approval design defect, based on the allegation that the manufacturer should have lowered the dosage after FDA approval, and preapproval design defect, because the manufacturer allegedly should have created a different form of the drug in the first place. Applying the rationale of Mutual Pharmaceutical Co. v. Bartlett,[20] the Sixth Circuit found both claims preempted. First, the FDA reviews changes to drug design post-approval, making compliance with a different state law duty impossible. Second, speculation about whether an alternative design would have received FDA approval and then been used by the plaintiff is too attenuated a task for courts. In any event, that alternative design also would have required FDA review and approval. 3. Pharma Prevails Over FDA in First Amendment Case... Staking out new ground on the contours of free speech in the pharmaceutical context, the Southern District of New York ruled in Amarin Pharma Inc. v. FDA[21] that the First Amendment protects a drug manufacturer s truthful and nonmisleading statements about off-label uses. The decision rejected a narrow reading of the Second Circuit s ruling in United States v. Caronia,[22] which held that truthful off-label promotion could not form the basis of a criminal prosecution for misbranding under the federal Food, Drug and Cosmetic Act. The district court s decision could free pharmaceutical manufacturers to promote drugs more broadly so long as statements are truthful and not misleading. For evidence of the ruling s impact, one need look no further than the next development on our list And Leads FDA to Rethink Regulatory Stance on Off-Label Promotion In the wake of Amarin, the FDA settled a suit challenging its ability to take enforcement action against a pharmaceutical company s truthful and nonmisleading promotion of an approved drug.[23] As part of the settlement, the FDA rescinded a 2014 warning letter that accused Pacira Pharmaceuticals of off-label promotion of its painkiller Exparel as a pain treatment beyond the two surgeries studied in clinical trial. The FDA had previously taken the position that promotional materials suggesting that Exparel could be used in other surgical procedures misbranded the drug in violation of the FDCA. The fact that the FDA backed down under pressure signals that it, too, recognizes that developments in First Amendment case law are narrowing the scope of actionable pharmaceutical promotions. 1. Changes to Federal Rules Usher in New Era in Discovery The number one development on our list is not limited to the product liability field, but it portends major changes in how products cases are litigated due to the massive discovery typically required of defendants. Amendments to the Federal Rules of Civil Procedure took effect on Dec. 1, 2015, and two changes to Rule 26 in particular should help rein in discovery. First, revised Rule 26(b)(1) limits the scope of discovery to matters specifically relevant to the claims and defenses asserted in the case, with an additional requirement that discovery be proportional to the needs of the case. A change to Rule 26(c)(1)(B) buttresses the proportionality and scope considerations by authorizing protective orders that include allocation of expenses arising from discovery. This provides potential recourse to parties who face abusive discovery designed to drive up the costs of litigation. Together, these revisions require parties to contemplate their true needs for discovery and should result in a new approach to discovery in the product liability realm.

4 Anand Agneshwar is a partner in Arnold & Porter s New York office, where he is co-chairman of the firm s product liability litigation practice group and represents pharmaceutical and consumer product companies as national, strategic, trial and appellate counsel in product liability and related litigation. Paige Sharpe is an associate in Arnold & Porter s Washington, D.C., office, where her practice focuses on product liability litigation. The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. [1] U.S., 134 S. Ct. 746 (2014). [2] See id. at 754 (the relevant inquiry for general jurisdiction purposes is whether a corporation s affiliations with the state are so continuous and systematic as to render [it] essentially at home in the forum state. ) [3] Compare, e.g., Gracey v. Janssen Pharma. Inc., No. 4:15-cv-407, (E.D. Mo. May 4, 2015), with Keeley v. Pfizer Inc., No. 4:15-cv-00583, (E.D. Mo. July 1, 2015). [4] Compare, e.g., Sullick v. United Pet Group Inc., Nos & , (E.D. Pa. June 12, 2015), with Pitts v. Ford Motor Co., F. Supp. 3d, (S.D. Miss. Aug. 26, 2015). [5] 777 F.3d 478 (D.C. Cir. 2015). [6] FTC Act 5(a)(1); FTC Act 12(a). [7] 777 F.3d at 502. [8] In re Accutane Litig., Civil Action No. 271 (MCL) (N.J. Super. Ct. Feb. 20, 2015). [9] In re Accutane Litig., Civil Action No. 271 (MCL) (N.J. Super. Ct. April 2, 2015). [10] 159 So.3d 649 (Ala. 2014). [11] Act , S.B. No. 80. [12] 555 U.S. 555 (2009). [13] Id. at 571. [14] F. Supp. 3d, (S.D. Cal. Nov. 9, 2015). [15] See id. at *5-6 (citing cases). [16] 779 F.3d 34 (1st Cir. 2015). [17] U.S., 131 S. Ct (2011). [18] Id. at 43.

5 [19] No , (6th Cir. Dec. 11, 2015). [20] U.S., 133 S. Ct (2013). [21] F.3d, (S.D.N.Y. Aug. 7, 2015). [22] 703 F.3d 149 (2d Cir. 2012). [23] See Pacira Pharma. Inc. v. FDA, No. 1:15-cv (S.D.N.Y.).