On The Case

How a seven-month-old Supreme Court ruling revived a seven-year-old case against GSK

(Reuters) - In December 2017, U.S. District Judge Cynthia Rufe of Philadelphia seemingly drove a stake through the heart of litigation by two employee healthcare funds suing GlaxoSmithKline over its marketing of the diabetes drug Avandia. The plans, which sued back in 2010, alleged that GSK had falsely touted Avandia as a boon to the cardiovascular health of diabetes patients, which is why health plans were willing to cover the drug’s high cost. But in 2007, the Food and Drug Administration required the company to change Avandia’s label to add a black-box warning that the drug may exacerbate heart conditions in some patients and was available only through a restricted distribution program.

Since that first label change – and while the litigation was ongoing – the FDA has come to believe that the entire body of clinical evidence does not indicate that Avandia is associated with increased risk of myocardial ischemia, or blocked blood flow to the heart. In 2014, the FDA directed GSK to remove information about restricted distribution from Avandia’s label. GSK, at the FDA’s direction, also removed language about myocardial ischemia from Avandia’s black box warning, although that warning continued to advise that the drug may cause or exacerbate congestive heart failure.

In her 2017 ruling, Judge Rufe granted summary judgment to GSK on the health plans’ state-law claims. She found that they were preempted under the doctrine of “impossibility preemption”: GSK is bound by state laws, but it is ultimately required to defer to the FDA on drug labeling. Judge Rufe found GSK had proved that in 2006 and 2007, when the company and the FDA were discussing new studies on Avandia’s associated risk of myocardial ischemia, the FDA would not have approved a label change. (The judge also granted GSK summary judgment on the healthcare plans’ claims under the federal racketeering statute, but I’m focusing on the state law preemption issue.)

On Tuesday, two years after Judge Rufe’s summary judgment decision and seven years after the litigation began, the 3rd U.S. Circuit Court of Appeals issued an opinion (2019 WL 6873681) reviving the healthcare plans’ case. (The court entered the opinion on Dec. 3 but did not publish it until this week.) The 3rd Circuit’s preemption analysis hinged on the U.S. Supreme Court’s ruling last May in Merck v. Albrecht (139 S.Ct. 1668) – which means that a seven-month-old decision salvaged a seven-year-old case. Conventional wisdom is that time favors defendants. Not in this case.

In Merck, the Supreme Court built upon the drug labeling preemption base it established in 2009’s Wyeth v. Levine (129 S.Ct. 1187), in which the justices held that FDA authority does not categorically trump state failure-to-warn claims. The Merck decision provided a two-part test for drug company defendants to show that federal law prohibited them from adding a warning that would satisfy state law: They must prove that they kept the FDA fully informed of the justifications for adding a warning required by state law and they must show that the FDA, in turn, barred them from changing the label to include the warning required by state law.

“In other words,” the 3rd Circuit said in its Avandia decision, “the upshot of Merck is that a drug manufacturer must show that the FDA made a fully informed decision to reject a change to a drug’s label.”

The Supreme Court’s Merck decision – as Judge Luis Restrepo pointed out in Tuesday’s opinion for a panel that also included Judges Brooks Smith and Thomas Ambro – was actually issued after oral arguments last March in the 3rd Circuit’s Avandia case. The 3rd Circuit called for both sides to address how Merck affected their arguments.

GSK’s lawyers at Kirkland & Ellis said in their brief (2019 WL 2369681) that the company met both prongs of the Merck test. GSK said that as soon as meta-analysis of clinical data suggested an elevated risk for cardiac complications, it went to the FDA with a proposal to change Avandia’s label. The FDA, in GSK’s telling, said in a 2007 letter that it wouldn’t change the label without more information – but, according to GSK, such information didn’t exist at the time. GSK also argued that it could not have used an alternative process to add a warning on its own because it was on notice, from that 2007 letter, that the FDA would not approve the change.

The 3rd Circuit said GSK could not use that 2007 FDA call for more information as a shield. Under Merck, the appeals court said, the 2007 letter was proof that the FDA was not fully informed about whether cardiac risk required a change in Avandia’s label. By the very words of the letter, according to the 3rd Circuit, GSK failed the first prong of the Merck test.

GSK had argued that it had supplied the FDA with all of the existing data that was material to the FDA’s inquiry. The 3rd Circuit, citing a 2005 meta-analysis that produced results similar to the 2006 study that prompted GSK to go to the FDA, said the company’s argument “turns the regulatory regime on its head,.” Judge Restrepo wrote. Judge Restrepo wrote “GSK is not the arbiter of which data and information is or is not ‘material’ to the FDA’s decision to approve or reject a change to a drug’s label. The FDA, and only the FDA, can determine what information is ‘material.’”

The company also failed the second prong of the Merck test, the 3rd Circuit said, because the FDA did not say it would not approve a label change. The agency said in that 2007 letter that it needed more information and that GSK needed to address the data and information deficiencies – not, according to the 3rd Circuit, that it would reject a label change when it had the requisite information.

“At most, the letter indicates that it is possible that the FDA could have rejected the label change after receiving the various data and information it requested from GSK, but as the Supreme Court has reiterated, the ‘possibility of impossibility (is) not enough,’” the 3rd Circuit said, quoting Merck.

The appeals court reversed Judge Rufe’s summary judgment grant on the health funds’ state-law claims, as well as on the RICO claims. (The 3rd Circuit held that the trial judge hadn’t given the funds an adequate chance to show GSK was part of a racketeering enterprise.)

GSK counsel Jay Lefkowitz of Kirkland did not respond to an email request for comment. Nor did lead counsel for the funds, Thomas Sobol of Hagens Berman Sobol Shapiro.