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Drug & Device News

By ALM Staff | Law Journal Newsletters |
July 31, 2008

PhRMA Announces New Voluntary Code of Conduct

The American pharmaceutical manufacturers' trade association, the Pharmaceutical Research and Manufacturers of America (PhRMA) announced July 10 that its board of directors had adopted changes to its PhRMA Code on Interactions with Healthcare Professionals. The changes, to go into effect in January 2009, will change the way pharmaceuticals salespeople sell their products to doctors. Significantly, they will no longer give away small promotional items, such as pens, coffee mugs and calendars; and they would stop paying for restaurant meals, recreation and entertainment for doctors and their staff members. Each member company will be asked to state whether it will comply with the new code.

Fake Cancer 'Cure' Manufacturers Warned to Cease and Desist

In letters sent to 23 U.S. companies, the Food and Drug Administration (FDA) in June warned manufacturers of several purported cancer cures to stop selling their untested and unproven products. The subject products run the gamut from pill-form drugs to teas and lotions, all sold over the Internet. 'Although promotions of bogus cancer 'cures' have always been a problem, the Internet has provided a mechanism for them to flourish,' said Margaret O'K. Glavin, the FDA's associate commissioner for regulatory affairs. Consumers are being urged, after consultation with their health care providers, to discontinue use of any of the products they are now taking. A list of the 125 suspect products and their manufacturers is available at: http://www.fda.gov/bbs/topics/factsheets/fakecancercures.html.

FDA Proposes New Monitoring System

The FDA has released a white paper outlining what it says will be major changes to the federal system that ensures medical device and drug product safety. The new program would entail the development of an electronic system to allow the FDA to monitor already existing electronic-claims and medical-record data for evidence of adverse reactions to drugs and devices. This information would supplement that obtained through the current voluntary reporting scheme. 'This initiative will tremendously increase the FDA's capacity to monitor the use of medical products on the market,' Health a Human Services Secretary Mike Leavitt said in an FDA release. 'We are moving from reactive dependence on voluntary reporting of safety concerns ' to proactive surveillance of medical products on the market. In addition, Medicare data on prescription drug use will be available to help government agencies and academic researchers improve the safety, quality and efficiency of health care services.' The white paper describing the proposed system is titled 'The Sentinel Initiative ' A National Strategy for Monitoring Medical Product Safety,' and is available at: http://www.fda.gov/oc/initiatives/advance/reports/report0508.html.

FTC Fines Defunct Online Pharmacy for False Advertising

The U.S. Federal Trade Commission has fined the owners and operators of an online pharmaceuticals distributor for making fraudulent claims about the drugs their now-closed business sold. The fine of $15.8 million was levied against the National Urological Group (doing business as Warner Laboratories), the National Institute for Clinical Weight Loss Inc., Hi-Tech Pharmaceuticals Inc. (doing business as Planet Pharmacy, Global Pharmacy and others), and four of their corporate officers. A doctor associated with the pharmacies was also held liable for $15,454, to be paid to consumers duped by the companies' false advertising for the weight-loss drugs ThermaLean, Lipodrene and Spontane-ES. These products, sold by the Norcross, GA-based companies, were weight-loss and erectile-dysfunction drugs that promised extraordinary results the companies could not substantiate, including a 90% success rate with use of the erectile dysfunction product and a fat loss of 600% with use of one of the weight-loss products.

Product Liability Suit May Proceed Against Contract Packager of Drug Product

In a case of first impression, a New Jersey appellate court has held that a company that packaged and labeled the recalled diet drug Acutrim can be sued for products liability even though it was not the seller of the product. Judge Anthony Parrillo of New Jersey's Appellate Division, ruled in Smith v. Alza Corp., A-4277-06, that a packager of a product is a 'manufacturer' and not a 'product seller' ' a 'product seller' is immune from suit on a products liability theory under Section 9 of New Jersey's Product Liability Act (PLA). 'Section 9 carves out a very limited exception to the PLA's overarching principle of imposing strict liability upon all entities in the chain of distribution, exempting only those whose exclusive role is to make the finished, packaged and labeled product available to consumers,' wrote Judge Parrillo. Thus, Steritek Inc., a contract packager of health care, beauty and pharmaceutical products, is a manufacturer under the PLA. The ruling reversed the dismissal of Steritek from a lawsuit filed by an Alabama man who suffered a brain hemorrhage after taking an Acutrim tablet, which contained the active ingredient phenylpropanolamine (PPA). PPA lost FDA approval in 2001 after the agency received numerous adverse event reports saying it caused high blood pressure, hemorrhagic strokes, hypertension and seizures.

FDA Requests Boxed Warnings on Older Class of Antipsychotic Drugs

With its new authority under the Food and Drug Administration Amendments Act of 2007 (FDAAA), the FDA in June began requiring manufacturers of “conventional” antipsychotic drugs to put warnings on their products telling physicians and consumers of the increased risk of death associated with the off-label use of these drugs to treat behavioral problems in older people with dementia. Such warnings could be required on newer (known as atypical) antipsychotic drugs as of 2005, but only after passage of the FDAAA could the FDA reach the older 'conventional' antipsychotic drug manufacturers. Manufacturers of both classes of drugs are being asked to change labeling so that all of antipsychotic drugs, both 'conventional' and 'atypical,' carry uniform warning language.

New Jersey Limits Medical Monitoring Remedy in Products Liability Cases

Many suits against drug manufacturers are brought in New Jersey, the corporate headquarters of numerous drug companies. Because of the state's prominence in the drug products liability field, a June 4 ruling by New Jersey's Supreme Court is particularly significant. That holding, set out in Sinclair v. Merck & Co. Inc., says that the remedy of medical monitoring is not available to defective product claimants who have not yet shown signs of injury, because the states' Product Liability Act does not provide for any such remedy.

The named plaintiffs in the lawsuit were former Vioxx users who asked for medical monitoring of their future health under the Products Liability Act (PLA), N.J.S.A. 2A:58C-1 to -11, and the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -106. They filed the action on behalf of a proposed national class of those who used Vioxx for a prolonged period and are, therefore, allegedly at greater risk of developing what are currently undiagnosed and unrecognized myocardial infarctions and other latent injuries. The New Jersey Supreme Court determined that the definition of 'harm' under the PLA requires a personal physical injury. Since plaintiffs alleged no such injury, they could not state a product liability claim under the PLA and their claim for medical monitoring must fail.

PhRMA Announces New Voluntary Code of Conduct

The American pharmaceutical manufacturers' trade association, the Pharmaceutical Research and Manufacturers of America (PhRMA) announced July 10 that its board of directors had adopted changes to its PhRMA Code on Interactions with Healthcare Professionals. The changes, to go into effect in January 2009, will change the way pharmaceuticals salespeople sell their products to doctors. Significantly, they will no longer give away small promotional items, such as pens, coffee mugs and calendars; and they would stop paying for restaurant meals, recreation and entertainment for doctors and their staff members. Each member company will be asked to state whether it will comply with the new code.

Fake Cancer 'Cure' Manufacturers Warned to Cease and Desist

In letters sent to 23 U.S. companies, the Food and Drug Administration (FDA) in June warned manufacturers of several purported cancer cures to stop selling their untested and unproven products. The subject products run the gamut from pill-form drugs to teas and lotions, all sold over the Internet. 'Although promotions of bogus cancer 'cures' have always been a problem, the Internet has provided a mechanism for them to flourish,' said Margaret O'K. Glavin, the FDA's associate commissioner for regulatory affairs. Consumers are being urged, after consultation with their health care providers, to discontinue use of any of the products they are now taking. A list of the 125 suspect products and their manufacturers is available at: http://www.fda.gov/bbs/topics/factsheets/fakecancercures.html.

FDA Proposes New Monitoring System

The FDA has released a white paper outlining what it says will be major changes to the federal system that ensures medical device and drug product safety. The new program would entail the development of an electronic system to allow the FDA to monitor already existing electronic-claims and medical-record data for evidence of adverse reactions to drugs and devices. This information would supplement that obtained through the current voluntary reporting scheme. 'This initiative will tremendously increase the FDA's capacity to monitor the use of medical products on the market,' Health a Human Services Secretary Mike Leavitt said in an FDA release. 'We are moving from reactive dependence on voluntary reporting of safety concerns ' to proactive surveillance of medical products on the market. In addition, Medicare data on prescription drug use will be available to help government agencies and academic researchers improve the safety, quality and efficiency of health care services.' The white paper describing the proposed system is titled 'The Sentinel Initiative ' A National Strategy for Monitoring Medical Product Safety,' and is available at: http://www.fda.gov/oc/initiatives/advance/reports/report0508.html.

FTC Fines Defunct Online Pharmacy for False Advertising

The U.S. Federal Trade Commission has fined the owners and operators of an online pharmaceuticals distributor for making fraudulent claims about the drugs their now-closed business sold. The fine of $15.8 million was levied against the National Urological Group (doing business as Warner Laboratories), the National Institute for Clinical Weight Loss Inc., Hi-Tech Pharmaceuticals Inc. (doing business as Planet Pharmacy, Global Pharmacy and others), and four of their corporate officers. A doctor associated with the pharmacies was also held liable for $15,454, to be paid to consumers duped by the companies' false advertising for the weight-loss drugs ThermaLean, Lipodrene and Spontane-ES. These products, sold by the Norcross, GA-based companies, were weight-loss and erectile-dysfunction drugs that promised extraordinary results the companies could not substantiate, including a 90% success rate with use of the erectile dysfunction product and a fat loss of 600% with use of one of the weight-loss products.

Product Liability Suit May Proceed Against Contract Packager of Drug Product

In a case of first impression, a New Jersey appellate court has held that a company that packaged and labeled the recalled diet drug Acutrim can be sued for products liability even though it was not the seller of the product. Judge Anthony Parrillo of New Jersey's Appellate Division, ruled in Smith v. Alza Corp., A-4277-06, that a packager of a product is a 'manufacturer' and not a 'product seller' ' a 'product seller' is immune from suit on a products liability theory under Section 9 of New Jersey's Product Liability Act (PLA). 'Section 9 carves out a very limited exception to the PLA's overarching principle of imposing strict liability upon all entities in the chain of distribution, exempting only those whose exclusive role is to make the finished, packaged and labeled product available to consumers,' wrote Judge Parrillo. Thus, Steritek Inc., a contract packager of health care, beauty and pharmaceutical products, is a manufacturer under the PLA. The ruling reversed the dismissal of Steritek from a lawsuit filed by an Alabama man who suffered a brain hemorrhage after taking an Acutrim tablet, which contained the active ingredient phenylpropanolamine (PPA). PPA lost FDA approval in 2001 after the agency received numerous adverse event reports saying it caused high blood pressure, hemorrhagic strokes, hypertension and seizures.

FDA Requests Boxed Warnings on Older Class of Antipsychotic Drugs

With its new authority under the Food and Drug Administration Amendments Act of 2007 (FDAAA), the FDA in June began requiring manufacturers of “conventional” antipsychotic drugs to put warnings on their products telling physicians and consumers of the increased risk of death associated with the off-label use of these drugs to treat behavioral problems in older people with dementia. Such warnings could be required on newer (known as atypical) antipsychotic drugs as of 2005, but only after passage of the FDAAA could the FDA reach the older 'conventional' antipsychotic drug manufacturers. Manufacturers of both classes of drugs are being asked to change labeling so that all of antipsychotic drugs, both 'conventional' and 'atypical,' carry uniform warning language.

New Jersey Limits Medical Monitoring Remedy in Products Liability Cases

Many suits against drug manufacturers are brought in New Jersey, the corporate headquarters of numerous drug companies. Because of the state's prominence in the drug products liability field, a June 4 ruling by New Jersey's Supreme Court is particularly significant. That holding, set out in Sinclair v. Merck & Co. Inc. , says that the remedy of medical monitoring is not available to defective product claimants who have not yet shown signs of injury, because the states' Product Liability Act does not provide for any such remedy.

The named plaintiffs in the lawsuit were former Vioxx users who asked for medical monitoring of their future health under the Products Liability Act (PLA), N.J.S.A. 2A:58C-1 to -11, and the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -106. They filed the action on behalf of a proposed national class of those who used Vioxx for a prolonged period and are, therefore, allegedly at greater risk of developing what are currently undiagnosed and unrecognized myocardial infarctions and other latent injuries. The New Jersey Supreme Court determined that the definition of 'harm' under the PLA requires a personal physical injury. Since plaintiffs alleged no such injury, they could not state a product liability claim under the PLA and their claim for medical monitoring must fail.

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