SZD Health Law Scan : Health Care Lawyers & Attorneys : Schottenstein Zox & Dunn Law Firm : Strategic Planning, Managed Care, Insurance : Columbus, Cleveland, Cincinnati, Central Ohio

President Obama recently ordered federal agencies to perform a comprehensive review of all regulations released in the past ten years to determine if federal "preemption" was improperly implemented in any of these regulations. 

President Obama's order represents yet another major departure from the policies/philosophy of the Bush Administration.  The Bush Administration encouraged federal agencies to add preemption language to their respective regulations.  This position was grounded in the policy that plaintiffs were being given too many opportunities to circumvent federal laws and bring state law tort claims against corporations. 

Although "next step" guidance has yet to be provided to federal agencies, and specific industries have yet to be fingered as prime offenders, the Obama order could have a significant impact on the life sciences industry. 

This order comes on the heels of the Supreme Court's decision in Wyeth v. Levine, where the Supreme Court determined that state law tort claims against pharmaceutical companies were not preempted by FDA approval of those companies' drugs.  The Obama order may have the effect of widening the gateway provided by the Supreme Court to sue pharma companies, and may further have the effect of opening the gateway against medical device companies and other players in the industry. 

This Life Sciences segment of the SZDHealthLawScan has kept a close eye on preemption cases in the industry, and we will provide ample commentary on the effects of President Obama's recent order. 

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Merck & Co. claimed victory in California recently, as Judge Victoria Cheney rejected a proposed class action suit against the drug manufacturer for the ill effects of its Vioxx product.  Merck, presently defending lawsuits across the globe for Vioxx, was spared from what could have been billions in liability exposure in California.  

Judge Cheney stated that the patients who consumed Vioxx had too many differences, including medical histories and the length of time each patient took the drug, in order to sue jointly.  Judge Cheney's ruling comes on the heels of another class action denial in Vioxx litigation in New Jersey.  With the fervor over the injuries caused by Vioxx still high, one can only speculate if there will be similar such decisions in the near future. 

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The recently passed economic stimulus bill will create a 15 person research council to compare the efficacy of different treatments for the same illness.  According to an article in the New York Times published last week, the program "responds to growing concerns that doctors have little or no solid evidence of the value of many treatments."  The inclusion of comparative effectiveness research in the stimulus bill should, according to supporters, curb the costs of health care in the long-run, as it will discourage patients and providers from using less effective, but very costly treatments.  Reaction from major players in the life sciences community will surely be mixed.  If the council is successful, its findings may result in a windfall for some companies, but may have the opposite effect for those companies whose treatments are dubbed "less effective."

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This fall the United States Supreme Court will hear Wyeth v. Levine - a case that may close the loop on whether pharmaceutical manufacturers are immune from state law tort claims. The case is highly anticipated in the life sciences industry as it comes on the heels of two recent U.S. Supreme Court decisions regarding state law tort immunity for manufacturers in the industry.

In February, the Supreme Court heard Riegel v. Medtronic, Inc.  and determined that federal law preempts state law tort claims against medical device manufacturers. Just a few weeks after its decision in Medtronic, the U.S. Supreme Court heard Warner-Lambert, Co. v. Kent and, in a 4-4 deadlock, did not extend preemption immunity to pharmaceutical companies.

Based upon existing law in the medical device arena, the Court’s decision in Medtronic was not terribly unpredictable. The question of state law tort immunity for pharmaceutical companies, however, is a much more difficult issue as existing law in this arena is more ambiguous.
The life sciences industry will surely watch the Supreme Court this fall in anticipation of the Wyeth decision. 

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