North Carolina Preemption Bill Is Closer To Reality
16 CommentsBy Ed Silverman // April 15th, 2011 // 8:33 am
North Carolina lawmakers moved a step closer yesterday to passing a bill that would protect drugmakers and and those selling medications from liability in lawsuits, so long as the med was approved by the FDA. The House Select Committee on Tort Reform voted to send the legislation to the full House for a vote, which may be held next week (read the bill)*.
Opponents say the provisions are among the most restrictive in the nation and would, effectively, prevent state citizens from recovering damages from any harm. The only exceptions refer to drugmakers that continue to sell a med after a government agency ordered a withdrawal or altered the med in a way that would have avoided an alleged injury, intentionally withheld or misrepresented info that led to approval by a government agency, or bribed a government official in order to obtain product approval.
At issue is preemption, which is the notion that FDA approval of a drug supercedes state law claims challenging safety, efficacy, or labeling. Drugmakers and the FDA unsuccessfully argued two years ago before the US Supreme Court that preemption exists by maintaining the agency’s actions are the final word on safety and effectiveness. Opponents of the legislation argue that North Carolina citizens will lose the right to recover damages from harm that citizens elsewhere are allowed to pursue.
Among those that have lined up to oppose the bill is the North Carolina Advocates for Justice, a non-profit group that represents attorneys (see this). However, they were joined yesterday by North Carolina Attorney General Ray Cooper, who worries the state would be precluded from recovering damages from drugmakers that commit fraud, but are shielded due to FDA approval.
“North Carolina’s work to uncover wrongdoing and get reimbursements is at risk, and creating this huge loophole is foolish,” Cooper says in a statement. “Instead of increasing the effort to crack down on Medicaid fraud this bill sets our state apart as a place with no rules and no consequences.”
However, Michigan has a preemption law that restricts product-liability lawsuits and, effectively, grants immunity to drugmakers if their med has been approved by the FDA, although Michigan does not have an exception when fraud is committed on the FDA. As an example, Michigan appeals court recently ruled that the state cannot sue Merck in an effort to recover millions of dollars spent on the Vioxx painkiller (read here and here).
For this reason, Cooper argues that North Carolina could become only the second state in the country where drugmakers “could be allowed to do or say anything about a drug as long as it has basic FDA approval.” He notes that, over the past decade, the state has recovered more than $400 million through its Medicaid investigations unit, many of which came from settlements with drugmakers. And, he adds, the settlements resolve allegations ranging from failure to properly disclose side effects, withholding negative clinical trial data, marketing drugs for improper uses and marketing to children drugs that are only safe for adults, among other things.
* - This is an older version of the bill, which refers to any state or federal agency. The newer version, which is not yet available on the state web site, should be available next week.
MsPiggy
This is another fine example of how an out of control & under regulated pharmaceutical industry buys a state legislature so much of the accountability for the crimes they commit are quashed permanently.
You would wonder how a special interest law/loophole like this for big pharma (even in the furthest reaches of one’s imagination); serves the people of North Carolina.
Welcome to the Corptopian States of America
AnneS
Ditto what MsPiggy said.
Stupid move, NC. Don’t fall for it.
Salient point
Not sure if I understand the Mr Cooper’s logic when he says that a company can “say anything about a drug” if this becomes law, especially as it builds into failure to disclose & off-label use. If the premise of the legislation is built around the FDA-approved label, surely the marketing of these products must continue to reflect the label, or else the pre-emption is nullified.
If you were to market a product for children, for instance, even though it’s not approved for pediatrics, you couldn’t inoculate yourself by saying it’s FDA approved because pediatrics is not part of that approval, I would imagine.
Certainly this legislation goes far beyond this communications issue, but it would be great if anyone has insights on this point (especially if I have it completely wrong).
Jaynesday
What would you think?
A person goes to the hospital for outpatient surgery. An implanted membrane is put in her abdomen to possibly reduce pain from adhesions after the operation. She then has to spend 3 agonizing weeks in intensive care where she passes away due to a reaction to the membrane. The product is known to cause over 250 (and counting) severe adverse events and at least 8 deaths that are known of. (ie. have been reported) In multiple MAUDE written accounts the doctors say that the reactions have been caused by the product. The company’s stance on the issues is that no sample of the product was returned and we cannot bother with further investigations due to this.
You go to see a lawyer who says this is not right. We have a case. However, Medical Device Preemption is passed into law and everything changes. The lawyer admits that the firm would not have taken the case if Preemption had been law before they were contacted. After a number of tries to convince the judge to hear the case, it boils down to this.
You have no case because this product is FDA approved. Case dismissed.
There are thousands of cases like this and if North Caroline chooses to embrace preemption there will be thousands more.
Think about it – Your complaint can not be heard, regardless of the criminality of it, because the product is FDA approved.
We ascribe infallibility to the FDA who readily admits that it doesn’t do a good job at product approval, who admits that it is understaffed, underfunded and overworked. If the people of North Caroline allow FDA Preemption there is only one explanation. They don’t know what they are doing.
ex-FDAer
Having worked on a several Glaxo drugs (a North Carolina drug company) I can tell you that in addition to false, misleading, or no information being submitted. If anything is detected by an FDA reviewer, the reviewer is retaliated against, told to tone down the review, or is simply overruled. In fact in some cases there is open admissions of conspiring between the company and FDA management to suppress issues. However since there is de facto no way to report this internally or have anything taken care of fraud on the FDA as well as Fraud and corruption by FDA officials is rampant. This bill would allow corrupt FDA officials to effectively preempt any ability to bring this to light by outside lawsuits where the information might indicate corruption within the FDA on behalf of the company.
A company may not submit data to the FDA and then comes in
JaT
Most people believe in the abilitiy of a legislature or a vote of the people to decide issues.
My opinion is that, unless you can fully comprehend the potential damages, you cannot make a fully informed decision - and should not be deciding for others what they can do legally. There are still areas where individual rights should apply. This is one of them because such damages are personalized by the extent of losses to quality of life and personal finances.
You have to wonder too why a state would prefer the tax payers support severely damaged people instead of the responsible party taking care of the losses. No wonder Medicaid and Social Security (by way of SSDI) is in a precarious situation. Hmm?
Cynic
In this era of tea party cost cutting frenzy, I’m waiting for an intelligent state to get a good actuary and figure out how to (easily) do much better than the FDA regarding drug safety. A state could, over and above this ineffectual agency, require a warning symbol for 7 years post release of a new drug. It could require a percentage of the profits from a drug in the state for those 7 years to go to a drug safety unit in state gvernment or academia. It could, as it should, go after individuals in a pharmaceutical company who promulgated the crimes which now get a slap on the wrist and a fine. Think of all the money that would, in the end, be saved - with less people ending up with chronic, drug-induced chronic conditions such as diabetes, less people in “chemical straightjackets” from lethal psyc. drugs, etc.
Justice in MI
This in response to Salient point and to clarify Ed’s summary above re: the Michigan law.
Both in Michigan, and in the proposed North Carolina, there is no “fraud exception” _unless_ the FDA follows through a prosecution of felony fraud. That is, only the FDA can determine fraud against itself as upheld in the Buckman case. And it must be felony fraud because of the word “intentional” in both the MI and proposed NC law (as opposed to misdemeanor counts or any other malfeasance).
As I’ve noted many times here, that essentially never happens in the context of big pharma. Rather, there are settlements, fines, CIAs, and perhaps admission to misdemeanor counts.
The reason it never happens, as we’ve discussed, is that felony fraud would remove that company from federal contracts–Medicare, Tricare, etc. The FDA’s own website on CIAs notes that one of their purposes is to avoid felony prosecution and thus remove the company’s products from federal use.
So, in answer to Salient Point’s question, even when a company is busted for off-label promotion–as in the big Lilly and Pfizer cases (including precisely the kind of situation SP describes) there would be no exception to immunity because there was no relevant felony fraud conviction. The Pfizer cases came closest, because there were fraud counts against Pharmacia and Upjohn. However, since neither of these companies still exist–and Pfizer itself was not so convicted–there is no felony fraud and thus no liability. None.
To be honest, I’m getting tired of having to repeat these points. But I would welcome anyone who has good cause to challenge them.
Justice in MI
Whoops. My apology. I see that Ed notes that Michigan does _not_ have a fraud exception.
Actually, the MI and NC laws are virtually identical. There is what appears to be a fraud exception “on paper” in both statutes. However, as discussed above, it is in both cases meaningless in the context of higher court decisions. Those decisions have occurred in the specific instance of MI. Given that they rest largely on a Supreme Court precedent (Buckman case), the result would almost certainly be the same re: the NC law.
Thus, in both states, what appears to be a “fraud exception” is itself a fraud.
rhett daniels
Wow - this makes me feel confident about taking drugs - NOT!
Justice in MI
MI and NC are probably only the beginning. I think we are likely to see similar initiatives in every state where there is a legislature/governor who look “malleable.”
Salient point
JiM-So the AG is saying that the marketers would have a free hand de facto because his hands are tied without an FDA action that never occurs, with the inappropriate marketing of Neurontin establishing the best known boundary for what FDA would tolerate. Is that correct?
Vic
Folks,
As JiM noted above, the basic issue is set up through the Supreme Court’s decision in Buckman. However, the Supreme Court’s decision is based _entirely_ upon the actual language of the statute (21 USC). The legislative statute is very specific:
Prosecutions for violation of the Food, Drug & Cosmetics Act “are to be prosecute by and in the name of the United States.”
Effectively the Supreme Court ruled that the attempt to go after a drug company for violating the FDCA is a “private” action and the legislation recognizes no such private right.
If you don’t like the fact that the pharma and device industries have essentially complete immunity (and I do wonder whether or not the MI or NC statutes would stand if ever challenged in the current situation after Buckman and Riegel) then the change needs to come from WASHINGTON, DC and the Congress and Senate of the United States. This is not something that a “state” is going to easily be able to enforce and more importantly, it is likely, IMHO, that these statutes should they ever be challenged, will be struck down unless 21 USC is changed. Even “parallel claims” are almost impossible to prove because you would require a violation of a law that DOES NOT implicate violation of 21 USC before a state-level court action can even commence from my understanding.
Peter
Let’s discuss why liability reform must be addressed. After a drug receives FDA approval, the said drug has only been “tested” in a realively small sample.(10-50,000 patients) However, the cost to get to the point of marketing may exceed $1 billion. Once the agent is approved for all folks that’s when unseen side effects and reactions may occur. We need to have a post marketing time period - where no liabilty charges can be placed towards a company that has followed all the rules and the FDA agreed that the product was safe and effective during clinical trials. Not sure how long that period should be but long enough to determine standards that protect patients legal rights but also allows for innovation to flourish without the fear of outlandish lawsuits that only enrich the trial bar.
ex-FDAer
Peter’s get out of jail free card for Pharma assumes we have an honest broker in the FDA and that the companies behave honestly.
Honest is the last thing that eitherof them are.
Salient point
Vic-
The state AG does have the ability to take same action against drug companies. This post notes that, in the past, Mr Cooper’s office recovered $400MM through its Medicaid investigations unit. Of course, criminal charges seem to be reserved for the feds, per the statute you cited.
The gist of his statement seems to be that his hands would now be tied both civilly & criminally. Still not convinced that this means a company can “say anything,” but perhaps he feels this is true as far as his office is concerned.