Federal Court Reinstates Claim Redux, commonly known as "Fen-Phen ", Should Have Not Been Offered to American Public

A Ohio Federal Court of Appeals Reaffirms that Diet-Drug Redux, commonly known as "Fen-Phen" Should Never Have Been Marketed to the American Public. 

Why?  The Court of Appeals indicated that the Plaintiff's death was due in part to Wyeth's pre-approval...

TIME MAGAZINE Cover re: Redux

The Court of Appeals reinstated a deceased victim's claim that the recalled diet drug Redux (commonly called fen-phen) linked to her death should never have been marketed to the American people by Wyeth due in part to its pre-approval concerns about potentially lethal side effects. 

 In the same ruling, the Court held that Federal regulation does not preempt state consumer-protection law

In remanding the case to the trial court, the Court of Appeals held that Federal drug regulations do not preempt state law negligence claims, and indicated that the Supreme Court's 2009 landmark pharmaceutical manufacturer preemption decision (Wyeth v. Levine) may apply beyond inadequate warning-label claims.

Importance?  This prevents drug companies being shielded from appropriate state neglignce claims from millions of Americans who get seriously injured taking these prescription medications that do not display adequate warnings due to misrepresentations about these serious lethal side effects to the FDA during the drug approval process. 

In its decision, the appeals Court stated, "...we are not persuaded that it is always impossible to comply with both state law duties and FDA regulations in the process leading up to FDA approval." It added, "...we cannot agree with the district court's conclusion as, not only is there a presumption against preemption, but the case law supports the conclusion that Congress did not intend to preempt state tort law claims when it passed the Food, Drug, and Cosmetics Act (FDCA)."

Punitive Damages

The Court of Appeals also reinstated and remanded to the trial court Plaintiff's claim for punitive damages.


In reversing key sections of the trial court's finding for the defendant on summary judgment in Wimbush v. Wyeth et.al., 6th Cir. No. 09-3380, the three-judge appeals panel held that the trial judge erred in concluding that the U.S. Food and Drug Administration (FDA) preempted the Buchanan family's negligence claims that the drug should never have been made available to Americans given Wyeth-Redux's known health risks, particularly Primary Pulmonary Hypertension (PPH).

 Redux/ Fen-Phen Causes Primary Pulmonary Hypertension

Although Redux was on the market  for a relatively short period, it is estimated that Wyeth has paid thousands of victims of Redux and its predecessor, Pondimin – and/or their survivors – more than $20 billion in damages. In evaluating the potential side effects of Redux, researchers noted that Primary Pulmonary Hypertension (PPH) is a devastating pulmonary disease for which there is still no cure, and the associated heart-valve problems may and often did require high-risk heart surgery. The controversial, high-risk diet drug had previously been evaluated and pulled from pharmacies overseas and it was banned in some individual states before the total recall.
The drug company, which spent more than $50 million marketing the wildly popular and profitable drug after its launch in April 1996, pulled it on September 15, 1997 at the request of the FDA and under mounting criticism by independent researchers and reports in respected medical journals.

 Mrs. Buchanan, the Plaintiff, was a dedicated 66- year-old nurse from Maple Heights, Ohio who took the weight-loss drug during 1996 and 1997, who lost her life to PPH in 2003 within a few months after filing her complaint.

See also:
http://www.pbs.org/wgbh/pages/frontline/shows/prescription/hazard/fenphen.html

Court Documents Show Wyeth Paid Writers of Hormone Therapy Articles

In a front-page story last week on August 5th, the New York Times reported that "Newly unveiled court documents show that ghostwriters paid by [Wyeth] played a major role in producing 26 scientific papers backing the use of hormone replacement therapy in women, suggesting that the level of hidden industry influence on medical literature is broader than previously known."

The articles were uncovered by lawyers suing Wyeth over the hormone therapy written about.

The articles were drafted by a medical communications firm paid by Wyeth, and were "published in 18 medical journals including The American Journal of Obstetrics and Gynecology and The International Journal of Cardiology. between 1998 and 2005." The articles did not disclose Wyeth’s role in initiating and paying for the work.

The articles "emphasized the benefits and de-emphasized the risks of taking hormones to protect against maladies like aging skin, heart disease and dementia."

The "supposed medical consensus" created by the papers is said to have helped sales of Wyeth's hormone drugs Premarin (conjugated estrogens) and Prempro (conjugated estrogens/medroxyprogesterone acetate) rise "to nearly $2 billion in 2001."

That "consensus fell apart in 2002 when a huge federal study on hormone therapy was stopped after researchers found that menopausal women who took certain hormones had an increased risk of invasive breast cancer, heart disease, and stroke."

Update: Alabama Drug Pricing Lawsuit Case in Juries Hands

Watson Pharmaceuticals, a manufacturer of generic and brand name prescription drugs, is one of the 70 pharmaceutical companies Alabama Attorney General Troy King sued over pricing allegations in 2005.

Watson is accused of inflating prices on lists used to determine how much the state should reimburse pharmacists for drugs provided to people on Medicaid Article Controls.

After more than two weeks of testimony in the complicated case, Montgomery County Circuit Judge Charles Price sent the case to jurors around 1:30 p.m. on Wednesday. They deliberated until about 4:30 p.m. when Judge Price called a recess until Monday morning and told the lawyers to keep working on a resolution.

Jere Beasley representing the state in closing argued that Watson cheated Alabama's Medicaid program out of $23 million from 1991 to 2005. "Nothing so far has gotten their attention," Beasley told the panel of nine women and three men. "I would suggest that you take the $23.8 million as a base and say three times or five times that amount as the punitive damage award."

Beasley also said the alleged "boardroom fraud" is common in the industry, and the country's neediest citizens have been ripped off for years. Change will only come through hitting drug makers in their pocketbooks, he said.

The state claimed it was led to believe it was paying below wholesale prices for medication, but the company said Medicaid officials should have known they were paying higher prices.

Watson attorney James Matthews countered that the state knew for more than a decade that it wasn't being charged the below-wholesale price.

He told jurors the state had plenty of clues, including those in its own documents, to see it wasn't paying the lowest price.

"These are the state's own documents," Matthews said. "Ask yourself -- should that have made them suspicious? Did they really rely on the belief that those were net prices in light of all of that?".

Beasley questioned why Watson didn't bring any of its CEOs or other top executives to testify about its pricing policy and why a liability expert who was present during the trial was never called to the stand.

Matthews said the company expert wasn't needed under oath, and dismissed a state expert as someone who did shoddy work going through files and employee depositions that Watson provided.

"The real truth here is that there is no fraud," he said. "The evidence doesn't support the claims."

Last month, Alabama announced it had settled drug pricing lawsuits against six pharmaceutical companies for $89 million. They included lawsuits against Abbott Laboratories of Chicago and Forest Laboratories, with corporate headquarters in New York City. Both were scheduled to be tried with the Watson case.

The state had previously settled with 10 companies for almost $35 million. Alabama's lawsuits against four companies have gone to trial, with the state winning judgments against each totaling $352.4 million. Those verdicts are being appealed.

Sources:

http://www.forbes.com/feeds/ap/2009/07/09/ap6635121.html

http://www.businessweek.com/ap/financialnews/D99ATL880.htm

Financial Fraud Gives Former Healthsouth CFO 3 Months in Prison

On Tuesday, Tadd McVay, a former HealthSouth Corp. finance chief, was ordered to spend three months in federal prison for his role in the $2.6 billion financial fraud that nearly wrecked the company.

Although Scrushy was acquitted of criminal charges, last month a judge's ruling in a shareholder lawsuit held Scrushy liable for fraud which ordered him to pay $2.9 billion in damages. When the fraud was uncovered in 2003, HealthSouth was nearly forced into bankruptcy.

Despite McVay's pleas to stay out of prison, U.S. District Judge Inge Johnson ordered him to 3 months in prison after McVay had pleaded guilty in a scheme to inflate earnings six years ago and served five years on probation and six months of house arrest.

Since the 11th U.S. Circuit Court of Appeals agreed with prosecutors that the penalty was too lenient, Judge Johnson ordered McVay to prison.

McVay was among five finance chiefs who pleaded guilty to crimes while working under Richard Scrushy, the former HealthSouth CEO. The fraudulent reports, aimed at meeting Wall Street forecasts, were sent to federal regulators between 1996 and 2002.

McVay has said he was promoted to chief financial officer at HealthSouth in late 2002 and signed a phony earnings statement rather than lose his job, which paid him $400,000 a year.

Sources:

http://www.al.com/newsflash/index.ssf?/base/lottery-5/124653284323960.xml&storylist=alabamanews

http://www.nwanews.com/adg/Business/263341/

$10.4 Million Jury Verdict returned in Breach of Contract & Fraud case

A jury ordered Cello Energy to pay $10.4 million over allegations the firm fraudulently claimed it could produce cheap fuel from hay, waste wood and other material.

Cello Energy is based out of Bay Minette and owned by the former head of the Alabama Ethics Commission, Jack Boykin.

The federal lawsuit was filed by Cello Energy bio fuel investors, Parsons & Wittemore Enterprises; a New York based paper company which also owns a pair of pulp mills in southwest Alabama.

Although Cello Energy built and staffed a plant, Parsons & Wittemore insisted the plant never accomplished what Boykin had long promised—deriving motor fuel from wood chips, crop residue and other biomass.

The jury ruled Monday that Cello Energy and Boykin Trust, the partnership that owned it, were liable for $2.8 million for breach of contract with Parsons & Whittemore. The jurors also decided that the companies, along with Jack Boykin and his son Allen Boykin, were personally liable for another $104,537 for fraud and awarded $7.5 million in punitive damages against all the defendants.

Boykin vowed to move forward with his process for producing fuel. His attorney, Forrest Latta, said Boykin's method has the potential to transform the world.

Parsons & Whittemore invested $2.5 million in Cello Energy and had another $10 million option for a one-third ownership share. Unknown to Parsons & Whittemore, however, Boykin struck a deal with a California firm, Khosla Ventures, which invested $10 million in the construction of a plant in Bay Minette to turn wood chips, hay and other cellulosic material into diesel fuel.

Parsons & Whittemore claimed the deal diluted the value of its investment. And George Landegger, CEO of Parsons & Wittemore, described Boykin's promises about the fuel plant as being lies.

"The jury has spoken clearly in condemning the Boykins' fraud against Parsons & Whittemore. I am gratified that the jury has put a stop to the Boykins' deceit," he said.

Parsons & Whittemore also sued Khosla, accusing the company of interfering in its business relationship with Cello Energy; however, the jury found in favor the Silicon Valley company, Khosla.

Source: Mercury News