Supreme Court issues opinion in contraceptive mandate challenge

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Today, the Supreme Court issued its opinion in Zubik v. Burwell. The per curiam opinion does not reach a decision on the merits of the case, in which religious employer petitioners argued that the Affordable Care Act’s contraceptive mandate substantially burdens the exercise of their religions in violation of the Religious Freedom Restoration Act. The Court remanded the consolidated cases, directing the Courts of Appeals to afford the parties “an opportunity to arrive at an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans ‘receive full and equal health coverage, including contraceptive coverage.'”

In a concurring opinion, Justice Sotomayor, joined by Justice Ginsburg, reminded lower courts that they should not construe the per curiam opinion or the Court’s earlier request for supplemental briefing as providing an indication of the Court’s views on the merits of this and related cases. Sotomayor noted that the Court has made similar disclaimers before, but”some lower courts have ignored those instructions.” She warned, “on remand in these cases, the Courts of Appeals should not make the same mistake.”

A full analysis of the decision is forthcoming; for additional information about the oral arguments in this case, see High court weighs government’s interest in protecting women’s health against hijacking religious organizations’ insurers, Health Reform WK-EDGE, March 24, 2016. For information about the supplemental briefing requested by the Court, see SCOTUS asks for supplemental briefing on alternative accommodations in Zubik, Health Reform WK-EDGE, April 1, 2016.

You can refer to Wolters Kluwer’s Health Reform Topic Page on Contraceptive Coverage for all developments related to the Affordable Care Act’s contraceptive mandate.

Second Missouri jury hits J&J with $55M verdict after linking talc to ovarian cancer

Another Missouri jury awarded $55 million to a woman who sued the company over allegations that she developed ovarian cancer after decades of using talc body powder for feminine hygiene. The verdict includes $5 million in actual damages and $50 million in punitive damages, according to a press release issued by Beasley Allen, the law firm representing the woman’s family.

The complaint, which was filed on behalf of over 60 plaintiffs, including the 62-year-old woman, alleged that each woman had developed ovarian cancer as a direct result of using Johnson’s® Baby Powder and its Shower to Shower® body powder—both of which contained talc—for more than 40 years. Specifically, the women all alleged that they had used Johnson & Johnson’s talcum powder products to dust their perineum for feminine hygiene purposes. It was asserted in the case that this was an intended and foreseeable use of these products based on the manufacturer’s advertising, marketing, and labeling of them. It was alleged that her development of ovarian cancer was directly and proximately caused by the unreasonably dangerous and defective talc products and the manufacturer’s “wrongful and negligent conduct in the research, development, testing, manufacture, production, promotion, distribution, marketing, and sale of talcum powder.” According to the timeline outlined in the complaint, Johnson & Johnson knew in 1971 about a study’s suggestion that there was a possible link between ovarian cancer and talc.

It was further alleged that at all pertinent times, cornstarch presented a feasible alternative to the use of talcum powder. Cornstarch is an organic carbohydrate that is quickly broken down by the body with no known health effects. Cornstarch powders have been sold and marketed for the same uses with nearly the same effectiveness.

“This second jury verdict affirms that Johnson & Johnson knew that its talcum powder products posed a risk to women’s health, but they did nothing to warn the public,” said Beasley Allen lawyer Ted Meadows.

Jury’s finding

The jury found Johnson & Johnson and Johnson & Johnson Consumer Companies, Inc. equally liable on the consumer’s claims for product liability failure to warn and negligence, and conspiracy. However, the jury found in favor of these two companies on the woman’s conspiracy claims. The jury also found in favor of Imerys Talc America, Inc., which has been in the business of mining and distributing talcum powder for use in talcum powder-based products, including the products at issue, on the negligence claim (the strict liability failure to warn claim had been withdrawn).

After agreeing that the products contributed to the woman’s development of ovarian cancer, the jury rendered a $55 million verdict for the woman’s family. The verdict included $5 million in actual damages and $50 million in punitive damages ($35 million against Johnson & Johnson; and $15 million against Johnson & Johnson Consumer Companies, Inc.).

Prior verdict

In February, another City of St. Louis Circuit Court jury awarded a woman’s family $72 million after agreeing the products contributed to the development of her ovarian cancer. That verdict included $10 million in actual damages and $62 million in punitive damages (see J&J gets hit with $72M verdict over link between Talc powder and cancer, Health Law Daily, February 26, 2016).

PharMerica requests Supreme Court review of FCA’s first-to-file bar

PharMerica Corporation, a provider of long-term care pharmacy services, asked the Supreme Court to change its position on the “first-to-file” bar under the False Claims Act (FCA). In a petition for a writ of certiorari, the pharmacy company asked the high court to review its May 2015 ruling in Kellogg Brown & Root Services, Inc. v. U.S. ex rel. Carter (Carter), in which the court ruled that an earlier FCA suit based upon substantially the same subject matter ceases to bar related and subsequent FCA suits after the earlier suit is dismissed. PharMerica objects to the 2015 ruling because it led to the revival of a whistleblower case brought against the company by a former employee. PharMerica’s petition warns that the Supreme Court needs to review its earlier decision to prevent the “neutering of the first-to-file bar.”

Trial court

The dispute arose from the qui tam action of a pharmacist formerly employed by PharMerica. Because a similar case was pending in Wisconsin (Wisconsin case) when the whistleblower’s case was filed, a district court dismissed the case on the grounds that it was barred under 31 U.S.C. §3730(b)(5). The trial court concluded that dismissal under the first-to-file bar was appropriate because the two actions were based on substantially the same facts and conduct.

First Circuit

After the case was dismissed, the Supreme Court handed down its decision in the Carter case, changing the outlines of the FCA’s first-to-file bar. Subsequent to that decision, the Wisconsin case that barred the whistleblower action was settled and dismissed. As a result, the whistleblower filed a motion to remand, seeking to either have the appeals court supplement his complaint with additional facts or have the case remanded to allow for supplementation. The First Circuit granted the whistleblower’s request to supplement his complaint (see FCA action dismissed under first-to-file bar may get another chance on remand, Health Law Daily, December 17, 2015).

Certiorari

PharMerica objected to the First Circuit’s decision in its petition, asserting that the Carter decision and the appellate court’s holding will allow copycat lawsuits to “circumvent the plain terms of the first-to-file bar.” The pharmacy service provider argued that the whistleblower should not have been able to resurrect his case simply by keeping it on the docket until the prior case was inevitably dismissed. PharMerica asserted that review is necessary to prevent copycat relators from “bringing placeholder suits, certain in the knowledge that earlier-filed actions will one day conclude.”

FTC files first court action to address authorized generic pay-for-delay pharmaceutical agreements

After years of challenging pay-for-delay settlements, the Federal Trade Commission (FTC) is taking strong action in court for the first time against arrangements between pharmaceutical companies that prevent generic alternatives from entering the market. The agency filed a complaint against Endo Pharmaceuticals, Inc., (Endo), Teikoku Pharma USA, Inc. (Teikoku Pharma), Watson Laboratories, Inc., Allergan PLC, and Impax Laboratories, Inc., alleging that Endo paid the first manufacturers that filed for generic approval to delay marketing drugs that competed with its branded drugs Opana® ER and Lidoderm®.

Reverse-payment agreements

The FTC challenges Endo’s “reverse-payment agreements,” which the government categorizes as anticompetitive, to prevent authorized generic drugs from entering the market. The agency points out that Opana ER and Lidoderm make up about 64 percent of the company’s annual revenues. Endo paid companies millions to delay market entrance of authorized generics (AGs), with a promise that it would allow the other company to be the only generic seller for several months before Endo entered with its own generic version. The first generic applicant is granted 180 days of generic exclusivity under federal law, except when a branded drug manufacturer decides to make its own generic. The FTC believes that these no-AG agreements are valuable to the first generic applicant, who is guaranteed to be the only producer for the 180-day period and can corner the market while charging higher prices.

In its complaint, the FTC pointed out generic drugs save patients, health plans, and government-sponsored health programs billions of dollars per year. It also noted that retail pharmacies often stock the brand and one generic, and that competition exists among generic suppliers, which serves to drive down the price. The FTC alleged that Endo’s actions eliminated the risk of generic competition for years, depriving the market of reduced prices. The agency requested a declaration that the agreements violated the FTC Act (15 U.S.C. §41 et seq.) and a permanent injunction preventing the companies from entering into similar agreements in the future.

Stipulated injunction

Along with its complaint for injunction, the FTC filed a stipulated order for permanent injunction against both Teikoku Seiyaku Co., Ltd., and Teikoku Pharma, Endo’s partners, prohibiting them from entering into prohibited brand/generic settlement agreements for 20 years. During that time, they may not pay a generic filer to stop researching, developing, manufacturing, marketing, and selling a drug unless the FTC approves the agreement.