Friday, July 25, 2008

New PhRMA Voluntary Guidelines – Will No Good Deed Go Unpunished?

The Pharmaceutical Research and Manufacturers of America (“PhRMA”) released a new set of voluntary guidelines for the conduct of pharmaceutical marketing (called “Code on Interactions with Health Care Professionals”) on July 11.

That’s almost two weeks ago – an eternity in the blogosphere.

What can we say? We’re busy. We’re also lazy. So being both, we were hoping that somebody else would take the lead in synopsizing them for us.

And what can we say? We’re in luck. We’ve found two really good summaries going well beyond the general Internet pabulum about pens and meals and instead lay out the guts of the PhRMA guidelines in a way that us litigators can use. One comes courtesy of the folks over at the FDA law blog. The second summary, which includes a nifty side-by-side comparison of the new and old guidelines, was sent to us yesterday by our friends at Reed Smith.

So, if all you want is to find out what’s in the PhRMA guidelines, click on the links and we’ll see ya later.

We’ve said before, and we’ll say again – we’re not regulatory types here. Rather than having to parse through for ourselves exactly what the PhRMA guidelines say, we’d much rather do what we like to do best – think about the PhRMA guidelines with our litigators’ hats on.

A lot of what goes on in pharmaceutical mass torts (and a lot of other litigation) can best be understood by keeping the following in mind:

NO GOOD DEED GOES UNPUNISHED.

We've seen it more times than we can count. Our client finds out that its drug (say, DES - that's safely generic) has some unexpected risk (although perfectly safe for users, it causes a virtually unknown cancer in their children). So the client bites the bullet, and takes the drug off the market. It did the right thing, right?

We think so, but we're biased.

So the other side responds: You should have done that sooner! You should have paid attention to this or that red flag! You should have done this or that study sooner! You should have done a different study! You should have had a different warning from the beginning! You should have waited before putting the product on the market in the first place!

And that’s the way it goes, whether the product’s a drug or a medical device, and whether the client’s action is a market withdrawal, a warning change, compliance with an FDA directive, or releasing the results of an adverse study – you name it, they’ll sue over it.

And if they can’t find anything wrong with the product (or even if they can), they’ll go after our client’s marketing.

Anything to expand the scope (and the expense) of discovery. Because it’s almost inevitable – rummage through enough documents and emails of enough people (a quarter million or so will do) and eventually you’re very likely to discover somebody saying, or doing, or proposing something dumb. Or at least something that a jury probably won't like.

And because the other side looks at marketing, it’s also inevitable that they’ll look at the new PhRMA guidelines. Thus no good deed goes unpunished.

The guidelines are explicitly voluntary. The dictionary definition of “voluntary” includes “free will” and “subject to individual volition.” Also, the guidelines take effect in January, 2009. That means they're not in effect now and weren’t in effect last year.

But as litigators, we know what we’ll see:

First, courts will be asked to convert voluntary to mandatory – “Your client doesn’t follow the guidelines, therefore it’s liable.” That’s the “negligence per se” approach.

Second, courts will be asked to apply prospective guidelines retroactively – “Because you’re client didn’t follow the guidelines when my client was hurt, therefore it’s liable.” That's the "who cares about the state of the art" approach.

Needless to say, we don’t think either argument should fly.

As to the first point, there’s a lot of law out there holding that “violating” something that doesn’t have the force of law isn’t a basis for liability. In Ashworth v. Albers Medical, Inc., 410 F.Supp.2d 471 (S.D.W. Va. 2005), a case involving drug counterfeiting, the court refused to find the defendant liable for not following “certain proposed, but never implemented, FDA regulations.” Id. at 482. Likewise, in Schaerrer v. Stewart's Plaza Pharmacy, Inc., 79 P.3d 922, 31-32 (Utah 2003), the court refused to hold the defendant strictly liable because it had “run afoul” of an FDA “policy statement” that was “by no means binding.” There would be no liability “[s]o long as the pharmacy is acting within the rules and regulations set forth by the state and federal governments.” Id.

Those are only the most on-point situations. Liability has also been rejected where the defendant allegedly did not comply with the following materials that did not carry with them the force of law:
  • Internal agency manualsSloan v. HUD, 231 F.3d 10, 18 (D.C. Cir. 2000); Flechsig v. United States, 991 F.2d 300, 304 (6th Cir. 1993); Kugel v. United States, 947 F.2d 1504, 1508 (D.C. Cir. 1991); Gatter v. Nimmo, 672 F.2d 343, 347 (3d Cir. 1982); Jacobo v. United States, 853 F.2d 640, 641-42 (9th Cir. 1988); Young v. United States, 2002 WL 31340969, at *3 (E.D. Pa. Oct. 15, 2002); Shrieve v. United States, 16 F. Supp.2d 853, 858 (N.D. Ohio 1998); Marin v. United States, 814 F. Supp. 1468, 1482 (E.D. Wash. 1992); DFDS Seacruises (Bahamas) Ltd. v. United States, 676 F. Supp. 1193, 1205-06 (S.D. Fla. 1987); Kane v. Lamothe, 936 A.2d 1303, 1309 (Vt. 2007); Chisolm v. Mississippi Dept. of Transportation, 942 So.2d 136, 143 (Miss. 2006); Lugtu v. California Highway Patrol, 28 P.3d 249, 259 (Cal. 2001); Moorehead v. District of Columbia, 747 A.2d 138145 (D.C. 2000); Mervin v. Magney Construction Co., 416 N.W.2d 121, 124-125 (Minn. 1987); Haney v. Bradley County Bd. of Education, 160 S.W.3d 886, 891-93 (Tenn. App. 2004); City of Mission v. Cantu, 89 S.W.3d 795, 807 n.17 (Tex. App. 2002); Schonfeldt v. State of California, 72 Cal. Rptr.2d 464, 467 (Cal. App. 1998); McDaniel v. Sunset Manor Co., 220 269 Cal. Rptr. 196, 198 (Cal. App. 1990).
  • External agency manualsBrady v. Depew, 2005 WL 1667404, at *3 (M.D. Pa. July 15, 2005); Fondow v. United States, 112 F. Supp.2d 119, 131 (D. Mass. 2000); Spencer v. Lakeview School Dist., 2006 WL 1816452, at *3 (Ohio App. June 30, 2006); Christiansen v. Silfies, 667 A.2d 396, 403 (Pa. Super. 1995) (ruling manual inadmissible).
  • Informal agency policiesJones v. Otis Elevator Co., 861 F.2d 655, 660-61 (11th Cir. 1988); Simmons v. Osborne, 2005 WL 2000850, at *4 (W.D. Ky. Aug. 17, 2005); Staton v. United States, 566 F. Supp. 174, 179 (W.D. Va. 1983); Pollock v. Florida Dept. of Highway Patrol, 882 So.2d 928, 936-37 (Fla. 2004); District of Columbia v. Arnold & Porter, 756 A.2d 427, 435 (D.C. 2000).
  • Private industry standardization codesMutual Casualty Co. v. Collins & Aikman Floor Coverings, Inc., 2004 WL 840561, at *4-5 (S.D. Iowa Feb. 13, 2004); Knarr v. Chapman School of Seamanship, 2000 WL 433981, at *2 (E.D. Pa. April 14, 2000); Commonwealth, Transportation Cabinet v. Babbitt, 172 S.W.3d 786, 795 (Ky. 2005); Delaware Electric Co-op. v. Duphily, 703 A.2d 1202, 1209 (Del. 1997); Alabama Power Co. v. Marine Builders, Inc., 475 So.2d 168, 177 (Ala. 1985) (privately set standards inadmissible); Jorgensen v. Horton, 206 N.W.2d 100, 103 (Iowa 1973).
  • Internal policies of private entitiesCavcon, Inc. v. Endress & Hauser, Inc., 2008 WL 2004251, at *16 (S.D.W. Va. May 8, 2008); Gilson v. Metropolitan Opera, 841 N.E.2d 747, 749 (N.Y. 2005); Wal-Mart Stores, Inc. v. Wright, 774 N.E.2d 891, 894 (Ind. 2002); Morrison v. Mineral Palace Ltd. Partnership, 603 N.W.2d 193, 197 n.4 (S.D. 1999); Rupert v. Clayton Brokerage Co., 737 P.2d 1106, 1111 (Colo. 1987); Luckie v. Piggly-Wiggly Southern, Inc., 325 S.E.2d 844, 845 (Ga. App. 1984); Boone v. William W. Backus Hospital, 2003 WL 22332793, at *7 (Conn. Super. Sept. 26, 2003).
That's the first point. There ain't no basis for negligence per se, or some other way of creating a new duty out of whole cloth, because PhRMA isn't the government.

As to the second point, we’ve taken a look at whether a privately adopted standard can be retroactively applied to create liability for conduct taking place prior to the standard’s existence. Not only isn’t that allowed as a legal proposition, but the overwhelming majority of cases go further and hold that private policies – instituted only after the fact – are irrelevant and inadmissible. Thus, pharmaceutical defendants faced with the inevitable claims that they should have been doing all along what the 2008 PhRMA guidelines provide should respond by moving to have the guidelines declared inadmissible as to any prior conduct.
  • Alabama: Alabama Power Co. v. Brooks, 479 So.2d 1169, 1180 (Ala. 1985) (subsequently adopted private electrical safety code inadmissible); Benford v. Richards Medical Co., 792 F.2d 1537, 1539-1540 (11th Cir. 1986) (no abuse of discretion in refusing to admit evidence of 1981 industry standard where events material to plaintiff's claim occurred in early 1970s).
  • Arizona: George v. Fox West Coast Theatres, 519 P.2d 185, 190 (Ariz. App. 1974) (building codes not applicable to buildings built prior to their enactment not relevant in negligence action).
  • Georgia: Muncie Aviation Corp. v. Party Doll Fleet, Inc., 519 F.2d 1178, 1184 (5th Cir. 1975) (if “guidelines were not published until after the events in question occurred the court could properly exclude them for lack of relevancy”).
  • Indiana: Lueder v. Northern Indiana Public Service Co., 683 N.E.2d 1340, 1346-47 (Ind. App. 1997) (safety code “not yet adopted” properly excluded as “not relevant”).
  • Kansas: Rexrode v American Laundry Press Co., 674 F2d 826, 832 (10th Cir. 1982) (subsequent ANSI standard properly excluded “as irrelevant ‘post-sale’ evidence”).
  • Massachusetts: Dominick v. Brockton-Taunton Gas Co., 255 N.E.2d 370, 371-72 (Mass. 1970) (industry safety bulletin issued after events in question had “no relevance”); Touch v. Master Unit Die Products, Inc., 43 F.3d 754, 757 (1st Cir. 1995) (“evidence that the defendant designer or manufacturer met the pertinent industry safety standards prevailing at the time of manufacture would be material . . . even though its product’s design might not comport with safety criteria later embraced by the industry”) (emphasis original).
  • Michigan: Shears v. Pardonnet, 263 N.W.2d 373 375 (Mich. App. 1977) (to be admissible, private safety “standards must have been promulgated prior to the production or construction of the device in question”); Vroman v. Sears, Roebuck & Co., 387 F.2d 732, 737-738 (6th Cir. 1967) (error to admit industry standards published after sale of the product in question).
  • Mississippi: Fillingane v. Siemens Energy & Automation, Inc., 809 So.2d 737, 741-42 (Miss. App. 2002) (subsequently adopted standards properly excluded even though relevant language was same as applicable standard); Frazier v. Continental Oil Co., 568 F.2d 378, 383 (5th Cir. 1978) (“[t]he judge . . . could exclude . . . standards which were published after the incident in question occurred”).
  • Missouri: May v. Ernst-Eichman Machinery Co., 1990 WL 198832, at *13 (W.D. Mo. Nov. 26, 1990) (“[i]t would have been a waste of the Court’s and the jury's time to listen to evidence of post-[manufacturing ANSI] standards which was at best only slightly probative, at worst confusing”).
  • New Hampshire: Lemery v. O’Shea Dennis, Inc., 291 A.2d 616, 618 (N.H. 1972) (absent evidence that private safety code “had been promulgated by the council prior to the construction of the allegedly defective [structure]” it was “not relevant”).
  • New Jersey: Rodrigues v Elizabethtown Gas Co., 104 NJ Super 436, 250 A2d 408, (1969) (gas safety manual dated two years after accident “is not pertinent or relevant and we shall not consider it”).
  • Pennsylvania: Petrongola v. Comcast-Spectacor, L.P., 789 A.2d 204, 212 (Pa. Super. 2001) (subsequently promulgated standards inadmissible because “[n]owhere do the standards demand that all existing facilities be immediately reconfigured to conform to these newly promulgated standards”); Kiehner v. School District of Philadelphia, 712 A.2d 830, 832 (Pa. Cmwlth. 1998) (defendant “had no duty to retrofit or remodel its [property] to bring it in compliance with the current BOCA Code”); Wilson v. Savage Arms Corp., 305 F. Supp. 1163, 1165 (E.D. Pa. 1969) (objections sustained to questions addressing “present standards or principles prevailing at times subsequent to the time of manufacture of the [product]”).
  • South Dakota: Andrushchenko v. Silchuk, 744 N.W.2d 850, 857 (S.D. 2008) (plumbing code not adopted until after accident “was not relevant and had no tendency to establish a duty”).
Beyond that, there’s also a bunch of decisions holding government regulations – things having the force of law – inadmissible where they weren’t enacted until after the events involved in litigation (usually sale of the product). Since there’s usually a stronger argument for admitting something that has binding legal effect, we view these cases as a fortiori (in layman's parlance, "well, duh") where an after-adopted private standard of conduct is involved. See Kirk v. Hanes Corp., 16 F.3d 705, 711 n.6 (6th Cir. 1994) (after-enacted CPSC lighter regulations were “irrelevant”); Cover v. Cohen, 461 N.E.2d 864, 869 (N.Y. 1984) (admission of draft regulation, not finalized until after product was sold was “both improper . . . and highly prejudicial”); Turner v. General Motors Corp., 584 S.W.2d 844, 852 (Tex. 1979) (“post-event regulations are inadmissible”); Aller v. Rodgers Machinery Manufacturing Co., 268 N.W.2d 830, 841 (Iowa 1978) (standards promulgated after the sale of the product were “clearly irrelevant” and inadmissible); White v. Clark Equipment Co., 553 S.W.2d 280, 281 (Ark. 1977) (subsequent regulation “has no relevance to the question of whether [defendant] ordinary care”); Bennett v. Greeley Gas Co., 969 P.2d 754, 759 (Colo. App. 1998) (“absent evidence that a safety code or regulation was intended to apply retroactively, it has generally been held that evidence concerning them is not admissible to establish the standard of care at a time before their enactment”); Dunkle v. West Penn Power Co., 583 A.2d 814, 816 (Pa. Super. 1990) (“subsequently enacted regulations are irrelevant to establish an earlier duty of care”); Oberreuter v. Orion Industries, Inc., 398 N.W.2d 206 (Iowa App. 1986) (subsequent CPSC regulations inadmissible); Ball v. New Jersey Bell Telephone Co., 504 A.2d 29, 36 (N.J. Super. 1986); (“it can hardly be said that [defendant’s failure to comply with a regulatory standard that was not in existence at the time [of its conduct] constitutes proof of negligence”).

The new PhRMA marketing code is both voluntary and non-retroactive. We fully expect plaintiffs to try to get courts to ignore both of these features. Given what we’ve found, we’ve got good grounds to try to put a stop to such foolishness.

4 comments:

Max Kennerly said...

I've blogged a reply, as linked in this comment:

What about ordinary, post hoc negligence? Can voluntary industry codes be relevant to the standard of care?

Absolutely! For example, the Eastern District of Pennsylvania case they cited, Knarr v. Chapman Sch. of Seamanship, 2000 U.S. Dist. LEXIS 5351 (E.D.Pa. 2000)(interpreting Florida law), rejected the per se application of ANSI standards, but was happy to cite "Jackson v. H.L. Bouton Co., 630 So. 2d 1173, 1174-75 (Dist.Ct.App.Fl. 1994)(violation of ANSI standards is "merely evidence of negligence.)."

The same is true in Pennsylvania, where evidence of industry standards is clearly relevant to the reasonableness of a manufacturer's conduct, and is thus admissible, except in strict liability cases where reasonableness is irelevant. Lewis v. Coffing Hoist Div., Duff-Norton, 515 Pa. 334, 528 A.2d 590, 594 (Pa. 1987). As you'd expect, if the plaintiff brings in industry standards, so too can the defendant. Daddona v. Thind, 891 A.2d 786, 807 (Pa. Commw. Ct. 2006).

As for whether its plaintiffs or defendants are engaging in what D&D Law calls "foolishness," you can bet your bottom dollar that every PhRMA defendant from here on out will make their compliance with these new standards the centerpiece of future defenses, and that PhRMA took great pains to ensure these codes were easy to comply with and would play well in front of judges and juries.

Seriously, look at these codes and consider the state of the industry in 2008:

Promotional materials should:
(a) be accurate and not misleading;
(b) only make substantiated claims;
(c) reflect the balance between risks & benefits; and
(d) be consistent with all FDA requirements.

...

Decisions regarding the selection or retention of [health care providers] as consultants should be made based on defined criteria such as general medical expertise and reputation, or knowledge and experience regarding a particular therapeutic area.

...

Companies should not use consultant arrangements as inducements or rewards for prescribing a particular medicine or course of treatment.

...

Train representatives to ensure general science and product-specific information so that representatives can provide accurate, up-to-date information, consistent with FDA requirements.

That's voluntary? It should be mandatory. No praise will come from these quarters, I don't consider it a "good deed" to encourage member companies follow FDA requirements. It's the law.

In 2008 we have to remind (it wasn't part of the old code!) pharmaceutical companies not to mislead people with promotional materials. What a shame.

Beck/Herrmann said...

As to the law, we're not in that much disagreement witn Max Kennerly. We're just addressing different questions.

Max has raised, and proceded to knock down, a straw man - that being whether currently applicable private codes can be used simply as evidence of an existing duty.

As long as they temporally applicable, most courts have considered private standards as relevant evidence of a standard of care. We generally like admitting such standards, since far more often than not, there's going to be compliance).

What we object to is using voluntary, nonretroactive codes in a manner for which they were never intended. That's why we addressed only the two questions we did, which were: (1) creation of a mandatory duty/standard of care that did not otherwise exist (a la negligence per se), and (2) trying to apply the PhRMA code retroactively.

Max either doesn't or can't disagree with either of the points we've made - thus his straw man approach.

We're certainly not going to say that, after 1/1/2009, the PhRMA code isn't going to be viewed as relevant to an existing marketing standard of care, provided state law has created such an animal.

As both violation and compliance with an applicable voluntary code are generally considered evidence of negligence/non-negligence, respectively, I am certain that, just as plaintiffs will attack instances of post-2009 non-compliance, defendants will equally strenuously assert their compliance. But the PhRMA code isn't a binding document, so it's not going to be conclusive either way.

As to the specifically Pennsylvania comment, we need to remind Max that strict liability is inapplicable in that state to product liabilty claims involving prescription medical products - as Bexis successfully argued to the Pennsylvania Supreme Court in the Hahn v. Richter case.

Finally, it's rather peculiar for Max to criticize the PhRMA code for not being mandatory. A private organization can't make anything mandatory - only a governmental body can do that. If Congress or the FDA is dissatisfied with the PhRMA code, they have the power to supersede it(within the constraints of the First Amendment).

English Teache4r said...

"pablum" is spelled, well, "pablum."

Max Kennerly said...

I didn't mean to set up a straw man; I think you're right on the law regarding retroactivity and negligence per se. I was just pointing a big issuethat was left unspoken -- indeed, I thought you had set up a straw man, I just didn't call it that!

I'm curious how frequently you see the retroactivity and per se arguments, and much more curious how frequently a court actually buys it. Seems to me the law is well-settled there, and thus no reason for concern.