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In a significant victory for pharmaceutical companies, the New Jersey Superior Court has granted summary judgment to Wyeth in two hormone therapy cases that had been scheduled for trial last fall. These two cases were Bailey v. Wyeth, Inc., No. L-9999-06 MT (N.J. Law Div. July 11, 2008) and Deboard v. Wyeth, Inc., No. L-1147-06 MT (N.J. Law Div. July 11, 2008).
The plaintiffs, Dora Bailey and Loretta Deboard, alleged that they developed breast cancer as a result of using Premarin, Provera, and Prempro to treat menopausal symptoms. Wyeth and co-defendant Upjohn manufactured the medications. The plaintiffs alleged that the products were defective under the New Jersey Products Liability Act because they failed to include an adequate warning of a risk of breast cancer. The plaintiffs also asserted claims under the New Jersey Consumer Fraud Act, and fraudulent and negligent misrepresentation. Previously, they had voluntarily dismissed claims alleging design defect, breach of implied warranty, breach of express warranty, and negligence.
Presumption of Adequacy Under New Jersey Law
The Honorable Jamie D. Happas, the mass tort judge assigned to case-manage all of the New Jersey hormone therapy cases, granted Wyeth and Upjohn summary judgment and dismissed all of the plaintiffs' claims. With respect to the inadequate warning claims, the court held that the New Jersey Products Liability Act creates a presumption that warnings on drugs approved by the FDA are adequate. The Products Liability Act provides, “if the warning or instruction given in connection with a drug ' has been approved or prescribed by the federal Food and Drug Administration ' a rebuttable presumption shall arise that the warning or instruction is adequate.” This presumption can only be rebutted by a specific type of evidence. Applying the New Jersey Appellate Court's recent decision in McDarby v. Merck, No. A-0076-07TI, 2008 N.J. Super. LEXIS 116, at *94-95 (N.J. App. Div. May 29, 2008), the court held that the presumption of adequacy may only be rebutted by substantial evidence of manipulations of the post-market regulatory process, unlike the typical presumption which can be rebutted by “some evidence tending to disprove” it. Thus, the presumption in a Products Liability Act failure-to-warn action is stronger and should be afforded greater evidentiary weight.
The court held that “the presumption of an adequate warning based on compliance with FDA regulations will be deemed rebutted only if the following proof is presented: (i) deliberate concealment or nondisclosure of after-acquired knowledge of harmful effects ' or (ii) manipulation of the post-market regulatory process ' ” This holding represents a fusion of prior cases which had defined the kind of evidence necessary to overcome the presumption of adequacy established by the Products Liability Act. First, in Perez v. Wyeth Lab., Inc., 161 N.J. 1, 24 (N.J. 1999), the court held that “for all practical purposes, absent deliberate concealment or nondisclosure of after-acquired knowledge of harmful effects, compliance with FDA standards should be dispositive” in a failure to warn claim. The New Jersey Supreme Court affirmed the Perez exception to the presumption of adequacy in Rowe v. Hoffman-LaRoche, Inc., 189 N.J. 615, 626 (N.J. 2007). In applying Perez, the court explicitly rejected the plaintiffs' contention that Perez only controls direct-to-consumer prescription drug advertising cases and is inapplicable to failure-to-warn claims. The McDarby court was the first to recognize that the presumption may also be rebutted by evidence of a pharmaceutical company's “economically-driven manipulation of the post-market regulatory process.” 2008 N.J. Super. LEXIS 116, at *81 (N.J. App. Div. May 29, 2008). As explained in McDarby v. Merck, manipulation of the post-market regulatory process includes actions that cause dilution of the product's warning or delay in dissemination of information required by the FDA via the product's label.
Plaintiffs Failed to Provide Evidence of Intentional Concealment or Nondisclosure
In Bailey and Deboard, the court found that the plaintiffs had failed to introduce substantial evidence of intentional concealment or nondisclosure of after-acquired knowledge of harmful effects. The plaintiffs' own expert had testified that neither defendant had withheld any evidence from the FDA. The court also was persuaded by the manufacturers' history of cooperation and compliance with the FDA. It noted that the FDA “has been continuously involved in the development, review, and approval of Premarin and Prempro, including ongoing review and approval of their labels” and that “Wyeth promptly addressed all recommendations and concerns raised by the FDA.” The court found similarly regarding Upjohn's dealing with the FDA concerning Provera.
Plaintiffs Failed to Prove Manipulation of the Post-Marketing Regulatory Process
The court then methodically reviewed and rejected each of the plaintiffs' proofs concerning the alleged “manipulation of the post-marketing regulatory process.” The court refused to accept advisory pre-review letters from the FDA as evidence of manipulation of the regulatory process because these letters represented a dialogue between the manufacturer and the FDA about draft ads or promotional materials, which had been voluntarily submitted by the manufacturer prior to public dissemination for the purpose of attaining FDA comment. The court also discounted the evidentiary value of untitled letters from the FDA.
Moreover, the court refused to consider promotional materials unrelated to the plaintiffs' use of the drugs as evidence of manipulation of the post-marketing regulatory process. The plaintiffs had pointed to documents concerning drugs other than Provera and manufacturer conduct that occurred after the plaintiff discontinued Provera. The court found these documents, and four promotional pieces which prompted untitled letters from the FDA, were “unrelated to plaintiffs' claim of failure to warn about the risk of breast cancer.” The untitled letters failed to reveal any intentional misconduct by the manufacturer.
The court rejected the plaintiffs' claims that the manufacturers failed to test their drugs adequately, as well as the argument that the FDA had no authority to require the companies to conduct studies. In rejecting the plaintiffs' failure to test allegation, the court noted that “the risk of breast cancer was not newly discovered, the FDA was knowledgeable of the risk, and neither the FDA nor any of its advisory committees requested Wyeth conduct specific testing.” Bailey, No. L-9999-06 MT, slip. op. at 35 (N.J. Law Div. July 11, 2008). Echoing the McDarby court's recognition that the FDA's “pre-market approvals of drugs are generally thorough in nature,” the court held that failure to test claims during the pre-approval period cannot constitute manipulation of the post-marketing regulatory process for purposes of rebutting the presumption of adequacy. 2008 N.J. Super. LEXIS 116, at *81 (N.J. App. Div. May 29, 2008).
The court was equally unmoved by the plaintiffs' claims that Wyeth was not under FDA authority until its new drug application in 1994, and could not have been required to conduct testing until that time. Finding that Premarin and Prempro had been “extensively regulated” by the FDA since 1942, the court held that the FDA could have required additional studies at least as early as Wyeth's 1986 application for an additional indicated use for Premarin. Further, the court observed that under the plaintiffs' incorrect theory of manufacturer liability for inadequate testing prior to a new drug application, “the presumption of adequacy accorded an FDA-approved drug labeling could be nullified by a plaintiff contending that the FDA would have approved a different warning had the defendant manufacturer done additional tests before filing its NDA.”. Bailey, No. L-9999-06 MT, slip. op. at 36-37 (N.J. Law Div. July 11, 2008).
With respect to labeling, the court found the evidence did not support the plaintiffs' assertion that Wyeth included misrepresentations and downplayed studies that showed an increased risk of breast cancer. The plaintiffs failed to produce any evidence of intentional misconduct by Wyeth, such as including misrepresentations it knew to be untrue in the label or minimizing or discounting studies which indicated an increased breast cancer risk. This kind of evidence is a necessary requirement to rebut the presumption of adequacy.
The court also refused to accept evidence of the current labels' stronger warnings as evidence rebutting the presumption of adequacy. Because drugs are initially tested on “a relatively small population of patients,” the court recognized that revision and fortification of warnings over time is “inherent in the drug approval process.” Further, the court noted that “there is no reason to believe that the New Jersey Legislature was not aware of this fact when it created the presumption of adequacy.” Bailey, No. L-9999-06 MT, slip. op. at 37 (N.J. Law Div. July 11, 2008).
Regarding prescriptions for off-label uses of Provera, the court found that the plaintiffs' physicians' decision to prescribe Provera off-label and the fact that the FDA had not yet approved Provera for the particular indication for which it was prescribed does not rebut the statutory presumption of adequacy. The court noted that Provera had been subject to both scientific and regulatory scrutiny. It noted that the FDA was “well informed of the prevalent practice of prescribing Provera off-label in combination with Premarin for treatment of menopausal symptoms,” sufficiently knowledgeable of the risk of breast cancer to determine if a warning was necessary, and equipped with the authority to require any necessary warning about breast cancer. Bailey v. Wyeth, No. L-9999-06 MT, slip. op. at 44 (N.J. Law Div. July 11, 2008). It therefore rejected the plaintiffs' argument that because Provera was prescribed off-label, the “FDA could not possibly have concluded there was no need for Upjohn to warn about the safety of Provera and estrogen on the risk of breast cancer.”
Last, the court rejected the argument that Wyeth manipulated the regulatory process by “ghostwriting” articles. Plaintiffs alleged that conceived and drafted medical articles relating to hormone therapy that were then published in peer-reviewed journals by authors who did not acknowledge Wyeth's involvement. Because these articles were peer-reviewed and “factually and medically sound,” the court found they did not delay “the implementation of what the FDA requested be in the Premarin or Prempro labeling,” and did not dilute the warnings on these drugs, or “pollute” the information regarding hormone replacement therapy already available to the FDA. Bailey, No. L-9999-06 MT, slip. op. at 38-39 (N.J. Law Div. July 11, 2008).
Because the plaintiffs had not overcome the presumption of adequacy, the court ruled that the warnings that accompanied the hormone therapy drugs were adequate as a matter of law.
Plaintiffs' Claims Outside the Products Liability Act Subsumed
The court also dismissed all of the plaintiffs' claims outside the Products Liability Act, including claims under the New Jersey Consumer Fraud Act and common law claims of fraudulent misrepresentation and negligent misrepresentation. The plaintiffs alleged under the Consumer Fraud Act that the manufacturers misled physicians and the public about the safety of their drugs, and that this fraudulent misrepresentation caused the plaintiffs to purchase those drugs and receive less than what was promised. In dismissing these claims, the court found that the New Jersey Products Liability Act was intended to “provide the exclusive remedy for harm caused by a product.” The court rejected the plaintiffs' claims that this “purely economic loss is separate and distinct from” the damages they suffered as a result of their physical injuries, finding instead that “the essential nature of” the plaintiffs' consumer fraud and common law claims was that the manufacturers failed to warn of the alleged dangers of their drugs. The court, therefore, found that these were, at their core, product liability claims and subsumed under the Products Liability Act. The court noted that “to allow plaintiffs to seek damages for loss of their co-payments as a result of purchasing defendants' drugs under the theory of consumer fraud will create a cause of action entirely inconsistent with the PLA's legislative scheme.” Bailey, No. L-9999-06 MT, slip. op. at 52-53 (N.J. Law Div. July 11, 2008).
The plaintiffs' common law causes of action, including fraudulent misrepresentation and negligent misrepresentation, were similarly dismissed, with the court holding that the Products Liability Act was the plaintiffs' exclusive remedy. Because these claims involved harm caused by a product, the court held that they too were subsumed by the PLA. The court refused to permit the plaintiffs to “recast a products liability claim as a fraudulent or negligent misrepresentation claim.”
Conclusion
The ruling in Bailey and Deboard is a boon to pharmaceutical manufacturers. The court has made abundantly clear that plaintiffs who allege harm caused by a product are limited to a single cause of action in New Jersey ' recovery under the Products Liability Act. At the same time, it strictly interpreted the presumption of adequacy in the Act and limited the nature of the proofs that will be sufficient to rebut that presumption in the case of labeling on FDA-approved drugs. It has reinforced the New Jersey legislature's intention for the Products Liability Act: re-balancing the law in favor of manufacturers. This opinion represents a significant victory for pharmaceutical manufacturers in New Jersey and may at long last shut the door to plaintiffs around the country who have long sought refuge in New Jersey's mass tort courts. The opinion is currently on appeal to the New Jersey Appellate Division.
The holding in Bailey and Deboard has significant persuasive value for practitioners throughout the nation because it confines plaintiffs to recovery exclusively under a product liability cause of action. Moreover, its increased deference to the FDA is especially important for practitioners mounting a preemption argument, particularly if affirmed by the New Jersey Appellate Division.
Christopher P. DePhillips, a member of this newsletter's Board of Editors, is a Principal of Porzio, Bromberg & Newman, and a Member of the Complex Tort Practice Group and the Governmental Affairs Group. He concentrates his practice in the areas of product liability, toxic tort, pharmaceutical liability, general liability defense and governmental affairs/lobbying. Katharine A. Muscalino is an associate, practicing in the firm's Land Use Practice Group.
In a significant victory for pharmaceutical companies, the New Jersey Superior Court has granted summary judgment to Wyeth in two hormone therapy cases that had been scheduled for trial last fall. These two cases were Bailey v.
The plaintiffs, Dora Bailey and Loretta Deboard, alleged that they developed breast cancer as a result of using Premarin, Provera, and Prempro to treat menopausal symptoms. Wyeth and co-defendant Upjohn manufactured the medications. The plaintiffs alleged that the products were defective under the New Jersey Products Liability Act because they failed to include an adequate warning of a risk of breast cancer. The plaintiffs also asserted claims under the New Jersey Consumer Fraud Act, and fraudulent and negligent misrepresentation. Previously, they had voluntarily dismissed claims alleging design defect, breach of implied warranty, breach of express warranty, and negligence.
Presumption of Adequacy Under New Jersey Law
The Honorable Jamie D. Happas, the mass tort judge assigned to case-manage all of the New Jersey hormone therapy cases, granted Wyeth and Upjohn summary judgment and dismissed all of the plaintiffs' claims. With respect to the inadequate warning claims, the court held that the New Jersey Products Liability Act creates a presumption that warnings on drugs approved by the FDA are adequate. The Products Liability Act provides, “if the warning or instruction given in connection with a drug ' has been approved or prescribed by the federal Food and Drug Administration ' a rebuttable presumption shall arise that the warning or instruction is adequate.” This presumption can only be rebutted by a specific type of evidence. Applying the New Jersey Appellate Court's recent decision in McDarby v. Merck, No. A-0076-07TI, 2008 N.J. Super. LEXIS 116, at *94-95 (N.J. App. Div. May 29, 2008), the court held that the presumption of adequacy may only be rebutted by substantial evidence of manipulations of the post-market regulatory process, unlike the typical presumption which can be rebutted by “some evidence tending to disprove” it. Thus, the presumption in a Products Liability Act failure-to-warn action is stronger and should be afforded greater evidentiary weight.
The court held that “the presumption of an adequate warning based on compliance with FDA regulations will be deemed rebutted only if the following proof is presented: (i) deliberate concealment or nondisclosure of after-acquired knowledge of harmful effects ' or (ii) manipulation of the post-market regulatory process ' ” This holding represents a fusion of prior cases which had defined the kind of evidence necessary to overcome the presumption of adequacy established by the Products Liability Act. First, in
Plaintiffs Failed to Provide Evidence of Intentional Concealment or Nondisclosure
In Bailey and Deboard, the court found that the plaintiffs had failed to introduce substantial evidence of intentional concealment or nondisclosure of after-acquired knowledge of harmful effects. The plaintiffs' own expert had testified that neither defendant had withheld any evidence from the FDA. The court also was persuaded by the manufacturers' history of cooperation and compliance with the FDA. It noted that the FDA “has been continuously involved in the development, review, and approval of Premarin and Prempro, including ongoing review and approval of their labels” and that “Wyeth promptly addressed all recommendations and concerns raised by the FDA.” The court found similarly regarding Upjohn's dealing with the FDA concerning Provera.
Plaintiffs Failed to Prove Manipulation of the Post-Marketing Regulatory Process
The court then methodically reviewed and rejected each of the plaintiffs' proofs concerning the alleged “manipulation of the post-marketing regulatory process.” The court refused to accept advisory pre-review letters from the FDA as evidence of manipulation of the regulatory process because these letters represented a dialogue between the manufacturer and the FDA about draft ads or promotional materials, which had been voluntarily submitted by the manufacturer prior to public dissemination for the purpose of attaining FDA comment. The court also discounted the evidentiary value of untitled letters from the FDA.
Moreover, the court refused to consider promotional materials unrelated to the plaintiffs' use of the drugs as evidence of manipulation of the post-marketing regulatory process. The plaintiffs had pointed to documents concerning drugs other than Provera and manufacturer conduct that occurred after the plaintiff discontinued Provera. The court found these documents, and four promotional pieces which prompted untitled letters from the FDA, were “unrelated to plaintiffs' claim of failure to warn about the risk of breast cancer.” The untitled letters failed to reveal any intentional misconduct by the manufacturer.
The court rejected the plaintiffs' claims that the manufacturers failed to test their drugs adequately, as well as the argument that the FDA had no authority to require the companies to conduct studies. In rejecting the plaintiffs' failure to test allegation, the court noted that “the risk of breast cancer was not newly discovered, the FDA was knowledgeable of the risk, and neither the FDA nor any of its advisory committees requested Wyeth conduct specific testing.” Bailey, No. L-9999-06 MT, slip. op. at 35 (N.J. Law Div. July 11, 2008). Echoing the McDarby court's recognition that the FDA's “pre-market approvals of drugs are generally thorough in nature,” the court held that failure to test claims during the pre-approval period cannot constitute manipulation of the post-marketing regulatory process for purposes of rebutting the presumption of adequacy. 2008 N.J. Super. LEXIS 116, at *81 (N.J. App. Div. May 29, 2008).
The court was equally unmoved by the plaintiffs' claims that Wyeth was not under FDA authority until its new drug application in 1994, and could not have been required to conduct testing until that time. Finding that Premarin and Prempro had been “extensively regulated” by the FDA since 1942, the court held that the FDA could have required additional studies at least as early as Wyeth's 1986 application for an additional indicated use for Premarin. Further, the court observed that under the plaintiffs' incorrect theory of manufacturer liability for inadequate testing prior to a new drug application, “the presumption of adequacy accorded an FDA-approved drug labeling could be nullified by a plaintiff contending that the FDA would have approved a different warning had the defendant manufacturer done additional tests before filing its NDA.”. Bailey, No. L-9999-06 MT, slip. op. at 36-37 (N.J. Law Div. July 11, 2008).
With respect to labeling, the court found the evidence did not support the plaintiffs' assertion that Wyeth included misrepresentations and downplayed studies that showed an increased risk of breast cancer. The plaintiffs failed to produce any evidence of intentional misconduct by Wyeth, such as including misrepresentations it knew to be untrue in the label or minimizing or discounting studies which indicated an increased breast cancer risk. This kind of evidence is a necessary requirement to rebut the presumption of adequacy.
The court also refused to accept evidence of the current labels' stronger warnings as evidence rebutting the presumption of adequacy. Because drugs are initially tested on “a relatively small population of patients,” the court recognized that revision and fortification of warnings over time is “inherent in the drug approval process.” Further, the court noted that “there is no reason to believe that the New Jersey Legislature was not aware of this fact when it created the presumption of adequacy.” Bailey, No. L-9999-06 MT, slip. op. at 37 (N.J. Law Div. July 11, 2008).
Regarding prescriptions for off-label uses of Provera, the court found that the plaintiffs' physicians' decision to prescribe Provera off-label and the fact that the FDA had not yet approved Provera for the particular indication for which it was prescribed does not rebut the statutory presumption of adequacy. The court noted that Provera had been subject to both scientific and regulatory scrutiny. It noted that the FDA was “well informed of the prevalent practice of prescribing Provera off-label in combination with Premarin for treatment of menopausal symptoms,” sufficiently knowledgeable of the risk of breast cancer to determine if a warning was necessary, and equipped with the authority to require any necessary warning about breast cancer. Bailey v. Wyeth, No. L-9999-06 MT, slip. op. at 44 (N.J. Law Div. July 11, 2008). It therefore rejected the plaintiffs' argument that because Provera was prescribed off-label, the “FDA could not possibly have concluded there was no need for Upjohn to warn about the safety of Provera and estrogen on the risk of breast cancer.”
Last, the court rejected the argument that Wyeth manipulated the regulatory process by “ghostwriting” articles. Plaintiffs alleged that conceived and drafted medical articles relating to hormone therapy that were then published in peer-reviewed journals by authors who did not acknowledge Wyeth's involvement. Because these articles were peer-reviewed and “factually and medically sound,” the court found they did not delay “the implementation of what the FDA requested be in the Premarin or Prempro labeling,” and did not dilute the warnings on these drugs, or “pollute” the information regarding hormone replacement therapy already available to the FDA. Bailey, No. L-9999-06 MT, slip. op. at 38-39 (N.J. Law Div. July 11, 2008).
Because the plaintiffs had not overcome the presumption of adequacy, the court ruled that the warnings that accompanied the hormone therapy drugs were adequate as a matter of law.
Plaintiffs' Claims Outside the Products Liability Act Subsumed
The court also dismissed all of the plaintiffs' claims outside the Products Liability Act, including claims under the New Jersey Consumer Fraud Act and common law claims of fraudulent misrepresentation and negligent misrepresentation. The plaintiffs alleged under the Consumer Fraud Act that the manufacturers misled physicians and the public about the safety of their drugs, and that this fraudulent misrepresentation caused the plaintiffs to purchase those drugs and receive less than what was promised. In dismissing these claims, the court found that the New Jersey Products Liability Act was intended to “provide the exclusive remedy for harm caused by a product.” The court rejected the plaintiffs' claims that this “purely economic loss is separate and distinct from” the damages they suffered as a result of their physical injuries, finding instead that “the essential nature of” the plaintiffs' consumer fraud and common law claims was that the manufacturers failed to warn of the alleged dangers of their drugs. The court, therefore, found that these were, at their core, product liability claims and subsumed under the Products Liability Act. The court noted that “to allow plaintiffs to seek damages for loss of their co-payments as a result of purchasing defendants' drugs under the theory of consumer fraud will create a cause of action entirely inconsistent with the PLA's legislative scheme.” Bailey, No. L-9999-06 MT, slip. op. at 52-53 (N.J. Law Div. July 11, 2008).
The plaintiffs' common law causes of action, including fraudulent misrepresentation and negligent misrepresentation, were similarly dismissed, with the court holding that the Products Liability Act was the plaintiffs' exclusive remedy. Because these claims involved harm caused by a product, the court held that they too were subsumed by the PLA. The court refused to permit the plaintiffs to “recast a products liability claim as a fraudulent or negligent misrepresentation claim.”
Conclusion
The ruling in Bailey and Deboard is a boon to pharmaceutical manufacturers. The court has made abundantly clear that plaintiffs who allege harm caused by a product are limited to a single cause of action in New Jersey ' recovery under the Products Liability Act. At the same time, it strictly interpreted the presumption of adequacy in the Act and limited the nature of the proofs that will be sufficient to rebut that presumption in the case of labeling on FDA-approved drugs. It has reinforced the New Jersey legislature's intention for the Products Liability Act: re-balancing the law in favor of manufacturers. This opinion represents a significant victory for pharmaceutical manufacturers in New Jersey and may at long last shut the door to plaintiffs around the country who have long sought refuge in New Jersey's mass tort courts. The opinion is currently on appeal to the New Jersey Appellate Division.
The holding in Bailey and Deboard has significant persuasive value for practitioners throughout the nation because it confines plaintiffs to recovery exclusively under a product liability cause of action. Moreover, its increased deference to the FDA is especially important for practitioners mounting a preemption argument, particularly if affirmed by the New Jersey Appellate Division.
Christopher P. DePhillips, a member of this newsletter's Board of Editors, is a Principal of
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