As we’ve been following since January 2012, the DOJ announced yesterday the final settlement with generic drug manufacturer Ranbaxy, bringing to a close the DOJ’s investigation of claims that the company introduced certain batches of adulterated drugs into the U.S. marketplace years ago. Ranbaxy is probably best known for the sale of the generic version of the blockbuster drug Lipitor. The $500 million settlement is being touted as the “largest drug safety settlement to date.”
As part of the settlement, Ranbaxy pled guilty to three felony Food, Drug and Cosmetic Act counts and four felony counts of knowingly making material false statements to the FDA, according to the DOJ press release. According to Rod J. Rosenstein, U.S. Attorney for the District of Maryland, “This is the largest false claims case ever prosecuted in the District of Maryland, and the nation’s largest financial penalty paid by a generic pharmaceutical company for FDCA violations.” As we highlighted in our previous post, the international component of this investigation — all manufacturing facilities at issue were located in India — seem particularly noteworthy and suggest a more aggressive international stance on the part of the FDA. As acting assistant attorney general for the DOJ Civil Division, Stuart F. Delery, stated, “We will continue to work with our law-enforcement partners to ensure that all manufacturers of drugs approved by the FDA for sale in the United States, both domestic and foreign, follow the FDA guidelines that protect all of us.”
Ranbaxy will pay a criminal fine and forfeiture totaling $150 million and civil settlement of $350 million, $231.8 million of which will go to the federal government, $118.2 million to the participating states, and approximately $48.6 to the qui tam whistleblower, a former Ranbaxy executive. Whether the Ranbaxy settlement indicates a growing trend in broad-reaching international enforcement of FDA violations remains to be seen, but it is likely that the DOJ and FDA will continue to work together if these are the results they can achieve. Companies thus should be ever more vigilant in their risk management assessments and consider proactive measures to eliminate, or at least reduce, their exposure to aggressive government FCA actions.
Here at Weil’s Product Liability Monitor, we keep a close eye on developments relating to hydraulic fracturing — more commonly known as “fracking.” In a nutshell, “fracking” is a well stimulation technique that employs high-pressure fluids to break up gas trapped in shale rock formations. My colleague, Sylvia Simson, is a frequent contributor on the subject. For a recent analysis Ms. Simson wrote along with Arvin Maskin on the subject of fracking in New York State, please click here.
Now comes news from the EPA that one of the controversies relating to fracking — air pollution from the release of the “greenhouse gas” methane during natural gas production – may be of less concern than originally estimated.
Today, the Supreme Court heard arguments in FTC v. Activis, Inc. on whether reverse settlement or so-called “pay for delay” agreements between branded and generic drug manufacturers violate U.S. antitrust laws. Hinting at a ruling that could have significant legal and financial implications for the pharmaceutical industry, the justices seemed skeptical of the legality of such agreements. Continue reading
Many out-of-state litigators are surprised to learn that Texas has no equivalent to Federal Rule of Civil Procedure (FRCP) 12(b)(6). But that is about to change.
In 2011, the 82nd Texas Legislature passed House Bill 274 (HB 274). HB 274 called upon the Texas Supreme Court to promulgate four sets of procedural rule amendments in order to implement certain legislative policy initiatives. One of the things HB 274 did was add Government Code § 22.004(g), which calls for rules “for the dismissal of causes of action that have no basis in law or fact on motion and without evidence … [to be] granted or denied within 45 days of the filing of the motion to dismiss.” On November 13, 2012, the Texas Supreme Court published its proposed (the rules are subject to change based on comments received by February 1, 2013) rules in response to its legislative mandate: Texas Rule of Civil Procedure (TRCP) 91a.
The guts of TRCP 91a are contained in TRCP 91a.1, requiring dismissal of a cause of action that “has no basis in law or fact”:
Motion and Grounds. Except in a case brought under the Family Code or a case governed by Chapter 14 of the Texas Civil Practice and Remedies Code [relating to inmate litigation], a party may move to dismiss a cause of action on the grounds that it has no basis in law or fact. A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A cause of action has no basis in fact if no reasonable person could believe the facts pleaded.
Other rules contained in the new TRCP 91a include:
- The motion must be filed within 60 days after the first pleading containing the challenged cause of action is served on the movant, and at least 21 days before the motion is heard. It must be granted or denied within 45 days after the motion is filed.
- Any response to the motion must be filed no later than 7 days before the date of the hearing.
- A respondent may avoid a ruling on the motion if, at least seven days before the date of the hearing, he files a nonsuit of challenged cause of action, or the movant files a withdrawal of the motion.
- A respondent may amend the challenged cause of action at least seven days before the hearing date. If he does, then the movant may either withdrawal his motion or amend it to address the amended cause of action.
- Each party is entitled to 14 days notice of the hearing on the motion to dismiss.
- The court may, but is not required to, conduct an oral hearing on the motion.
- The court may not consider evidence in ruling on the motion and must decide the motion based solely on the pleading of the cause of action.
- Except in certain actions involving the government, the court “must award the prevailing party on the motion all costs and reasonable and necessary attorney fees incurred with respect to the challenged cause of action in the trial court.”
- Filing a motion to dismiss and obtaining a ruling on it does not waive any special appearance or motion to transfer venue.
Thus, subject to any amendments, Texas will soon have its equivalent to a FRCP 12(b)(6) motion. Indeed, FRCP 12(b)(6) is certain to inform the decisions of Texas judges deciding motions under TRCP 91a.
In a significant decision, the Supreme Court of Alabama ruled Friday that “it is not fundamentally unfair to hold the brand-name manufacturer liable for warnings on a product it did not produce[.]“ Rejecting the majority approach, Alabama now joins only two other courts — California and Vermont — in holding branded manufacturers liable for claims based on a generic drug. Continue reading