The Legal landscape (Life Science in the US & EU)

23 August 2019

Ian Dodds-Smith is head of Arnold & Porter’s European Product Liability practice and also co-head of the Food, Drug and Medical Device practice. Ian has primary responsibility for the European Union market. He advises companies and trade associations on all aspects of the regulatory framework within Europe.

Angela Vicari has considerable experience in product liability and mass tort defense and complex litigation. Her work and growing presence in the industry has been widely recognized. In her product liability and mass tort practice, she has defended product manufacturers in lawsuits in state and federal courts, including the coordination of the nationwide defense and multidistrict litigation proceedings of hundreds of cases involving medical devices, pharmaceutical products and consumer products, among others.

Together, Ian and Angela discuss the legal landscape in the life science industry in the US and the EU.

The US

The Plaintiffs bar

The plaintiffs’ bar is an informal designation for attorneys who generally represent plaintiffs. The bar in the US is very organised, regularly sharing information. They aggressively advertise online and are extremely well funded with hedge funds emerging as some of the biggest investors in litigation financing deals.

Over half of civil cases, 52% in 2018, in federal courts are multidistrict litigation (MDLs). There is also a trend emerging of claimants being much more selective as to which state they will file a case, given previous success rates in the region. However, MDL reform could be on the horizon which should challenge plaintiffs’ litigation decisions. The potential reforms include:

• Mandatory disclosures by plaintiffs
• Pathway for interlocutory appellate review of certain motions
• Procedure to ensure parties’ consent to each bellwether trial
• Require disclosure of third-party financing agreements to the court and parties
• Provide a common standard for determining whether plaintiffs in an MDL proceeding should be joined or if, instead, a separate complaint should be submitted for each one
• Amend Rule 7 to include master complaints and individual complaints in consolidated cases

Preemption

The purchase of goods by one person or a party before the opportunity is offered to others, otherwise known as Preemption, is an important defense in US product liability litigation against medical device and pharmaceutical life science companies. When patients injured by FDA-approved devices and drugs sue manufacturers under state law for failing to warn of dangerous side effects or design defects, manufacturers often raise preemption as a defence. If successful, this defence could allow manufacturers to avoid liability for making and selling FDA-approved devices and drugs that are alleged to have injured patients.

There are number of recent US Supreme Court cases which exemplify this in practice for example the following cases provide invaluable insight:

• Merck Sharp & Dohme Corp. v. Albrecht (2019, branded prescription drugs)
• Mutual Pharmaceutical v. Bartlett (2013, generic drugs)
• Pliva v. Mensing (2011, generic drugs), Wyeth v. Levine (2009)
• Riegel v. Medtronic, Inc., 552 U.S. 312 (2008) (medical devices)

Liability: be prepared

Other areas which are receiving attention is the scope around innovator liability and D&O cases are becoming increasingly well publicised.

Life sciences litigation demonstrates a vicious cycle – where does it stop? The key is to ensure that life science companies are being as proactive as possible – pre-litigation and during litigation. Companies want to know what their strongest defences are early.

Pre-Litigation checklist:

• Sales representative training
• Compliance policies
• Strong and transparent FDA record
• Responsible communications
• Document hygiene
• Early case assessment

Litigation checklist:

• Develop company story early
• Strategic forum selection
• Cede no ground on jurisdiction
• Retain good local counsel
• Retain strong experts early
• Educate the judge early
• Build a cohesive trial team
• Be tech savvy
• End game strategy

Peter Tillmans – head of liability underwriting specialties, HDI Global says:
“Defence costs and plaintiff sophistication are both on the rise – the more transparent the defence pre-litigation strategy, the better our confidence and the more prepared we can be for the outcomes.”

Lee Farrow – EVP, life sciences industry practice leader, Chubb adds:
“Regarding the pre-litigation points, we ask those when we’re reviewing an underwriting submission – it’s a really good ‘to do’ list. The more companies that actively adopt those techniques, the easier it is for us to take on more risk.”

Finally, Linda Schultz – SVP, health, science and technology group, Navigators concludes:
“Looking at the US, where you get sued is a really big deal. Defence costs never go away and the type of environment in the US is that they favour the plaintiff as we’ve seen with the MDL stats. It’s not uncommon for there to be high running discovery costs before companies even get to deposition. When it comes to insurance, the question to ask is: ‘How can all this be done as efficiently as possible to ensure companies don’t eradicate their insurance reserves?’”

Real-world data (RWD) and real-world evidence (RWE)

These two elements are playing an increasing bigger role in health care decisions. The FDA uses RWD and RWE to monitor post-market safety and adverse events and to make regulatory decisions. The health care community is using this data to support coverage decisions and to develop guidelines and decision support tools for use in clinical practice.

Medical product developers are using RWD and RWE to support clinical trial designs (eg, large simple trials, pragmatic clinical trials) and observational studies to generate innovative, new treatment approaches.

The 21st Century Cures Act, passed in 2016, places additional focus on the use of these types of data to support regulatory decision making, including approval of new indications for approved drugs. Congress defined RWE as data regarding the usage, or the potential benefits or risks, of a drug derived from sources other than traditional clinical trials. The FDA has expanded on this definition.

Why is this happening now?

The use of computers, mobile devices, wearables and other biosensors to gather and store huge amounts of health-related data has been rapidly accelerating. This data holds potential to allow us to better design and conduct clinical trials and studies in the health care setting to answer questions previously though infeasible. In addition, with the development of sophisticated, new analytical capabilities, we are better able to analyse these data and apply the results of our analyses to medical product development and approval.

Digital health: striking a balance between innovation and regulation

The FDA’s Centre for Devices and Radiological Health (CDRH) has established the Digital Health Program which seeks to better protect and promote public health and provide continued regulatory clarity by: Fostering collaborations and enhancing outreach to digital health customers and developing and implementing regulatory strategies and policies for digital health technologies.

The report outlines that providers and other stakeholders are using digital health in their efforts to:

• Reduce inefficiencies
• Improve access
• Reduce costs
• Increase quality
• Make medicine more personalised for patients

Patients and consumers can use digital health to better manage and track their health and wellness related activities. The use of technologies such as smart phones, social networks and internet applications is not only changing the way we communicate, but is also providing innovative ways for the industry and regulators to monitor our health and well-being and giving us greater access to information. Together these advancements are leading to a convergence of people, information, technology and connectivity to improve health care and health outcomes.

Many medical devices now have the ability to connect to and communicate with other devices or systems. Devices that are already FDA approved or cleared are being updated to add digital features. New types of devices that already have these capabilities are being explored.

Many stakeholders are involved in digital health activities, including patients, health care practitioners, researchers, traditional medical device industry firms, and firms new to FDA regulatory requirements, such as mobile application developers.

The following are topics in the digital health field on which the FDA has been working to provide clarity using practical approaches that balance benefits and risks:

• Wireless Medical Devices
• Mobile medical apps
• Health IT
• Telemedicine
• Medical Device Data Systems
• Medical device Interoperability
• Software as a Medical Device (SaMD)
• General Wellness
• Cybersecurity

Europe

The EU is a completely different legal landscape to US. Key contributors to this include:

• no juries
• no punitive damages/modest compensatory levels
• varying disclosure rules
• several countries have no fault medical accident schemes

The UK is the most litigious member state for life science cases, but following the demise of legal aid for pharma/device claims, things have slowed down. However, there have been several initiatives in the UK and Ireland to re-open ‘old’ cases/issues often using Parliamentary pressure groups to promote inquiries which is “not good news”. Inquiries have been documented around the following:

• thalidomide: UK, Ireland
• blood products for Factor VIII deficiency: UK
• Primodos (hormone pregnancy test): threatened
• Epilim (sodium valproate) treatment for epilepsy: threatened
• surgical mesh for treatment of urinary incontinence

The advantage for claimants is that the government is pouring millions into these cases which have led to claims years later and the risk of further claims. “You can understand where they’re coming from but, make no mistake, this is about compensation,” said Ian Dodds-Smith from Arnold & Porter

Hands on regulation

There has never been a more detailed and more hands-on regulatory process in the EU than there is now. Governments are wanting to give people “a voice” further than what the regulation process allows which is why there are more class actions and group actions appearing in the legal system.

Case study: Gee & others v DePuy International – Liability claims were brought forward by 312 UK patients against the producer, relating to a type of hip transplant. Up until 2002 hip prosthesis generally had a metal-on-polyethylene bearing, lasting about 10 years and metal-on-metal was introduced to improve device survival rates. The claim was around the notion that the new prosthesis was defective because a particular debris had led to early revision surgery.

First major case which uses/tests the EU product liability directive, making it an important case. The ruling notes that the balance of risks and benefits must be assessed. The safety the public is entitled to expect is not a no risk environment.

Other regulatory initiatives and product issues in the EU

Nearly every case is prompted by changes in regulatory status – so this could be linked to regulatory initiatives and/or product issues in the EU. The impact of changes/amendments to Penalties Regulation, include broadening the scope of responsibility of MA holder for actions of group companies eg, in PhV.

Specific product action that may provoke claims could include:

• smooth versus textured breast implants; France/EU: reassessment of risks
• opioids; UK: more prominent warnings of habituation risks
• restrictions on use of recently authorised treatments

The EU Medical Device Directive means first importers into EU from outside (which will now include the UK) will be treated as the manufacturer and responsible for product safety. The UK will adopt the same approach post Brexit.

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