Consider this statistic: FDA has pursued more enforcement actions in the first four months of 2013 than in the previous five years combined.  Thus far this year, FDA has issued almost four dozen inspectional observations, which are often referred to as “Form 483s”  or “483s,” compared with approximately two dozen 483s and warning letters from 2008 through 2012.   FDA is authorized to perform inspections of compounding pharmacies under the Federal Food, Drug, and Cosmetic Act, SEC. 704 (21 USC §374) and uses 483s to document and communicate concerns discovered during these inspections.  Although Form 483s are not a final agency determination, they are often a precursor to regulatory action, which can include a formal warning letter, withholding of product approval, or plant shut down.  And 483s yield results: FDA’s stepped up oversight has lead to six voluntary recalls by compounders so far in 2013. 

There are questions about how long FDA can sustain its recent enforcement action pace, since focusing on compound pharmacies requires FDA to shift resources from other areas.  What is clear, though, is that regardless of pace, FDA is now very much engaged on the issue of regulatory oversight of compounding pharmacies and will continue to pay particular attention to this issue.  Whether that will result in more litigation remains to be seen but FDA tighter regulation often brings more private lawsuits in its wake.  We will continue to monitor developments in this area.

The immediate takeaway is that Behrend appears to increase the evidentiary burden that plaintiffs must satisfy at the class certification stage.  The Court’s interpretation of Rule 23(b)(3) suggests that a putative class of plaintiffs  may have to satisfy the rule’s predominance criterion with respect to the calculation of damages.  And districts courts are urged  to exercise their role as gatekeeper by conducting a rigorous analysis of whether Rule 23(b)’s prerequisites have been met — even if it entails an evaluation of the merits of the plaintiff’s claim.

This all suggests Behrend could present a potent line of attack for defendants fighting class certification, particularly where it can argued that damages vary among putative class members.  Indeed, it’s been less than a week and Behrend seems to be making waves already.  Just today, the Supreme Court remanded the case of Whirlpool Corp. v. Glazer (12-322) to the Sixth Circuit for review in light of Behrend.  Whirlpool had cited Behrend  in a supplemental brief filed the day after the case was decided, urging the Court to review the certification of a consumer class action over alleged defects in Whirlpool’s washing machines because a significant portion of class members did not experience any problems, and therefore plaintiffs could not satisfy Rule 23(b)(3)’s predominance criterion with respect to damages.  (See here for a more fulsome discussion of the case.)

Only time will tell how Behrend will be applied by district and circuit courts.  But at first glance it seems the decision has very real potential to make class certification more difficult to obtain for plaintiffs, particularly in light of the remand in Whirlpool.

CAFA provides the federal district courts with “original jurisdiction” to hear a “class action” if the class has more than 100 members, the parties are minimally diverse, and the “matter in controversy exceeds the sum or value of $5,000,000.”  See 28 U. S. C. §§1332(d)(2), (5)(B).  To “determine whether the matter in controversy” exceeds that sum, “the claims of the individual class members shall be aggregated.” §1332(d)(6).  And those “class members” include “persons (named or unnamed) who fall within the definition of the proposed or certified class.”  See§1332(d) (1)(D) (emphasis added).  Here, Greg Knowles filed a proposed class action in an Arkansas state court against the Standard Fire Insurance Company alleging that when the company had made certain homeowner’s insurance loss payments, it had unlawfully failed to include a general contractor fee. Knowles sought to certify a class of “hundreds, and possibly thousands” of similarly harmed Arkansas policyholders.  And in an attempt to avoid having the proposed class action heard in federal court, Knowles purported to stipulate in his complaint that he would not at seek damages for the class in excess of CAFA’s $5,000,000 threshold.  

The Court rejected Knowles’ attempt to escape CAFA, holding that a plaintiff who files a proposed class action does not have authority to legally bind members of the proposed class before the class is certified.  Indeed, a plaintiff’s pre-certification stipulation can only bind that plaintiff.  For these reasons, Knowles could not reduce the value of the putative class members’ claims so as to avoid CAFA jurisdiction.

Knowles effectively forecloses plaintiffs from using pre-certification stipulations to avoid CAFA jurisdiction, but it does not mean that we have seen the last of attempts to avoid CAFA.  What is clear, though, is that the Supreme Court is skeptical of attempts to undermine what it views as CAFA’s “primary objective:” “Federal court consideration of interstate cases of national importance.” §2(b)(2), 119 Stat. 5.

On January 22, CPSC Commissioner Robert Adler issued a statement on the agency’s Fiscal Year 2013 Operating Plan.  In the statement, the Commissioner made clear that even without the sequester, the agency’s budget appropriations were not sufficient for it to keep pace with the obligations imposed by the 2008 Consumer Product Safety Improvement Act.  The Commissioner identified a number of what he termed “Unfunded Worthy Projects” that have been slowed or postponed because of budgetary constraints, including: safety concerns with all-terrain vehicles (roll-over hazards), cooktops and electric portable heaters (fire hazards),  generators and furnaces (carbon monoxide hazards).  The Commissioner further suggested that any additional cuts would “gouge” the CPSC and its ability to fund safety projects and conduct regulatory oversight. Thus, were the sequester to occur, it appears that the CPSC would be greatly weakened in its ability to meet its statutory mandates.  And while the sequester could translate into decreased regulatory oversight by the CPSC, it could also mean that the CPSC responds more slowly to manufacturer and distributor concerns about reports of allegedly unsafe products posted on CPSC’s website.  Thus, a weakened CPSC would not necessarily be better for anyone, whether consumers or business.

Only time can tell whether the sequester will kick in, and even then the effects of the sequester will not be fully known until they play themselves out in the weeks and months ahead.  We will continue to monitor this situation and keep you posted.

The report identifies the federal agencies whose budgets would be cut and estimates the amount of the funding reductions.   For the Consumer Product Safety Commission (CPSC), the report estimates that going over the Cliff would results in cuts of $9M, or 8.2% of CPSC’s budget.   This may not seem like a particularly significant amount at first glance; however, it is important to stress that the actual amount of cuts — and how they will be implemented — has not yet been decided.   Indeed, the CPSC’s website does not contain any mention of the Cliff, much less CPSC plans to respond to the looming cuts.  Consequently, it is unclear where the cuts would be made within the CPSC and how the cuts might impact CPSC’s five strategic goals: leadership in safety; commitment to prevention; rigorous hazard identification; decisive response; and raising awareness.  Whether the cuts would be made across the board or targeted at specific goals remains to be seen.  So, as always, the devil is in the details.

We will continue to follow and report on the negotiations as they unfold.  In the meantime, best wishes for 2013!

In late July, authorities from the Colorado Pharmacy Board forwarded a complaint about NECC to the Massachusetts Pharmacy Board.   The Colorado regulators reported that NECC had been distributing drugs to hospitals in Colorado and Massachusetts in violation of its license.  The head of the Massachusetts Pharmacy Board, however, did not take any action at that time, or at any time before reports of a meningitis outbreak began to surface.

The dismissal is a notable event.  It is not often that regulators are held accountable for perceived lapses in oversight, particularly during the immediate aftermath.  Furthermore, it’s clear that the dust has not yet settled: hearings are currently scheduled before the House and the Senate, where the Commissioner of FDA will testify, the former head of the Massachusetts Pharmacy Board has  been invited to appear, and the co-owner of NECC has been subpoenaed to testify.

Meanwhile, regulators back in Massachusetts have turned their sights on other compounding pharmacies by conducting snap inspections across the state.  Those inspections led to the voluntary surrender of its compounding license by Infusion Resources, another compounding pharmacy.

As we previously noted, compounding pharmacies are not subject to the same level of FDA oversight as regular drug manufacturers.  That, however, could change, particularly in light of the upcoming hearings before Congress.  We will continue to follow this issue as it unfolds and keep you posted here.

Some background information is in order.   In 2008 several domestic well owners near the town of Pavillion, Wyoming reported adverse changes in the taste and odor of domestic well water.  The wells were located in an area where natrual gas fracking production was underway.  In response, EPA initiated a ground water investigation, conducted four rounds of water quality sampling, and released a draft report on December 8, 2011 for public and peer review.  EPA’s testing  revealed elevated levels of methane and dissolved hydrocarbons, as well as synthetic compounds not expected to occur naturally in ground water.  EPA suggested the contamination was caused by nearby fracking activities, thus sparking a heated debate among industry, federal, state, and local authorities, and residents about EPA’s test methodology and results.  A chief criticism was that the  groundwater contaminants discovered by EPA could in fact have been introduced by EPA when it drilled monitoring wells as part of  its investigation.  In the end, after meeting with state officials to discuss objections that had been lodged, EPA agreed to conduct a re-sample and compare the results.

In the report it released this past Wednesday, EPA stated that the results of the  re-sample are consistent with data it obtained in its December 2011 report.   The report further noted that the re-sample was conducted in a manner intended to minimize the potential effect of negative and positive bias.  Put a different way, EPA stated that it tailored the re-sample to minimize the possibility of introducing contaminants during water quality testing.  And while it is important to note that the report does not state that the contamination was caused by fracking, and that no final determination regarding the cause has been made, opponents of fracking will likely attempt to seize on the EPA’s interim results to argue their case.   One can also envision scenarios in which the plaintiff’s bar might try to co-opt EPA’s testing to prove causation in future fracking-related ground water contamination cases.

What is certain, though, is that EPA’s recent report is likely to keep alleged fracking-related impacts in the spotlight.  The investigation in Pavillion is not the first time that allegations have been made about fracking and ground water contamination, nor is it likely to be the last.  Thus, the developments in Wyoming should be of particular interest to those in the natural gas industry, especially given the growing number of fracking operations across the country. Likewise, we will continue to follow and discuss this topic here at the Monitor.

Citing 43 reports of burns linked to the use of OTC muscle and joint pain relievers, FDA contends  there’s no way to predict whether a consumer will have an adverse “burn” reaction or not.  FDA also stated that the severity of the burns suffered ranged from mild to severe, with anecdotal reports of blistering.

It’s important to note, however, that FDA has not stated that the creams are unsafe, nor has it asked manufacturers to implement a recall.  In fact, FDA explicitly noted in its statement that reports of burns are rare and very small in comparison to the number of times the creams have been used.  It’s also notable that FDA did  not provide any specifics about the reported cases.  For example, FDA did not say whether the users followed the manufacturer’s instructions or their doctor’s instructions.  Common sense dictates that safe medical products can cause harm when not used properly.

It remains to be seen what the regulatory response of FDA will be to these reports.  Whether and how FDA chooses to respond – if at all – could have an impact on whether litigation begins cropping up.  We will keep an eye on this situation as it continues to develop.

On July 25, the Senate Committee on Environment and Public Works voted 10-8 to send S. 847, Safe Chemicals Act of 2011 (SCA), to the floor for consideration by the full Senate.  As drafted at the time it was passed out of committee, the SCA would require:

• Chemical companies to develop and submit a minimum data set for each chemical they produce, while EPA would have  authority to require submission of data beyond the minimum data set needed to determine safety of a chemical;
• EPA to prioritize chemicals based on three classes  of risk: immediate risk management, safety standard determination, and no immediate action;
• EPA to establish a public database that will house both chemical information submitted to EPA and decisions made by EPA about chemicals; and
• EPA to establish a program to develop market and other incentives for safer alternatives, and a research grant program targeted at priority hazardous chemicals for which alternatives do not presently exist.

The SCA is not without critics.  The American Chemistry Council has asserted that the SCA’s ”proposed decision-making standard may be legally and technically impossible to meet” because it is not feasible to establish  “reasonable certainty of no harm… from aggregate exposure.”  (By contrast, under the current TSCA regime, the onus is on EPA to establish that a new chemical creates a risk of harm.)  The government’s analysis of “safety” also would change under the SCA; instead of relying on the classic risk assessment approach—which looks at a “hazard plus” exposure—the SCA focuses on “aggregate exposure.” From a practical and regulatory standpoint, the feasibility of satisfying the  ”no harm” and “aggregate exposure” standards turns on how these terms are defined.  Consequently, should the SCA pass the Senate, the battle lines likely will be drawn during the rulemaking process  – when EPA ostensibly will decide the definitions of these critical terms.

Stepping back further and looking at the bigger picture, it’s not clear that the SCA will even come to — let alone pass — a full vote on the Senate floor.  Nonetheless, we will continue to follow this potentially landmark legislation and report on developments as they arise.

Since the current standards were implemented in 1996, cellphone usage  in the United States has increased exponentially.  By way of illustration, recent estimates suggest there are now more cellphones  than people living in the country.  In addition, the number and duration of calls made using mobile phones also have exploded.  At the same time, however, a debate has been simmering over whether the radiation emitted by cellphones during normal use poses any health risks.   The National Cancer Institute, the FCC and the FDA have all stated that testing has not shown any link between cellphone radiation and cancer.   But in 2011, the World Health Organization classified the radiation emitted by cellphones “possibly carcinogenic” because scientific data gave “some indications” of a link between heavy cellphone use and an increased risk of glioma, a brain cancer.  FDA subsequently reviewed the WHO data and reached the opposite conclusion.

For its part, the FCC maintains that the proposed review is routine, and that the current cellphone emission guidelines in the US are the most conservative in the world.  It also bears noting that the proposal does not automatically mean that the current limits will change; indeed, it is anticipated that FCC will seek public comment.  What is likely, though, is that  the FCC notice of inquiry will reinvigorate the debate about cellphone safety, with both industry and consumer groups expected to weigh in.