Over the last few months we have been reporting on developments in the litigation against New
England Compounding Pharmacy, also known as the New England Compounding Center
(NECC). Numerous lawsuits have resulted from an outbreak of fungal meningitis
traced to NECC’s injectable steroid medication methylprednisolone acetate, a
steroid typically used by physicians to treat back pain. The outbreak has killed
36 people and sickened at least 510 nationwide, according to the Centers for
Disease Control. Since September, NECC has voluntarily ceased operations,
surrendered its license to the Massachusetts Board of Registration in Pharmacy,
and recalled all of its products. NECC is facing numerous lawsuits in state and
federal court, as well as a criminal probe and a congressional
investigation.
On the litigation front, a key question is how the multitude of claims will be adjudicated, given that affected plaintiffs hail from at least 19 states. On Jan. 31, 2013, the U.S. Judicial Panel on Multidistrict Litigation will consider just that when it decides whether to consolidate the federal suits against NECC (In re New England Compounding Pharmacy Products Liability Litigation, J.P.M.L., MDL No. 2149). Plaintiffs Brenda and Robert Bansale have sought consolidation of the cases against NECC, urging the MDL panel to send the suits to the U.S. District Court for the District of Minnesota. NECC supports consolidation, but not the plaintiffs’ choice of forum. In response to the plaintiffs’ petition, NECC asked the panel to transfer litigation to the District of Massachusetts.
Since the Judicial Panel was created in 1968, multidistrict litigation under 28 U.S.C. § 1407 has become somewhat routine: as of September 2012, 59,657 civil actions were pending in 293 MDL dockets. In most cases, the MDL panel’s decisions are not especially controversial. 28 U.S.C. § 1407 provides that civil actions may be transferred for coordinated or consolidated pretrial proceedings when they (1) “involv[e] one or more common questions of fact”; (2) the transfers “will be for the convenience of the parties and witnesses”; and (3) the transfers will promote the just and efficient conduct of such actions.” This standard is fairly lenient, and will frequently be satisfied where numerous plaintiffs bring related cases against a single corporate defendant. The more controversial consolidation decisions are made in cases where plaintiffs seek coordinated proceedings against multiple defendants who are alleged to have engaged in the same or similar misconduct. Consolidation in these cases can cause numerous problems for individual defendants, and in those instances the MDL panel will be more likely to deny transfer and consolidation. Given that the lawsuits here are all against NECC and involve the same drug and adverse effects, and that NECC itself supports consolidation, the MDL panel will almost certainly agree to consolidate the cases.
In the meantime, a Massachusetts federal judge recently rejected NECC’s motion to stay lawsuits against it pending a decision by the MDL panel. In rejecting the stay, U.S. District Judge Dennis Saylor also decided to coordinate the 12 NECC cases currently before him, and is allowing discovery to proceed in federal court in Massachusetts. He agreed with the plaintiffs’ argument that early case proceedings such as document preservation discussions and answers to plaintiffs’ complaints would need to be accomplished regardless of whether the suits are centralized.
Widespread litigation has not been the only reaction to the deadly meningitis outbreak. Congress and the FDA have been investigating the NECC and other compounding pharmacies, and legislative action is underway. This particular outbreak sparked added controversy because compounded medications – such as the steroid manufactured by NECC – tend to exist in a regulatory gray area. Under the current regulatory scheme, if a licensed practitioner is tailoring drugs to fit individual patients’ needs (the practice known as compounding: compounded medications are so named because they are made by altering the ingredients of an existing drug), the federal agency generally leaves oversight to state pharmacy boards. Thus, in response to criticism that the FDA did not act when it was made aware of NECC’s alleged sterility problems as early as 2006, the agency argued that NECC fell through the cracks of a “patchwork” system that does not clearly give it authority over compounding pharmacies.
Lawmakers are currently working to fill the gaps in this regulatory scheme. H.R. 6638, introduced earlier this month by Reps. Rosa DeLaura, D-Conn., and Nita Lowey, D-N.Y., would require that compounding pharmacies register their facilities with the FDA and would establish an FDA database of information on registered compounders. The proposed law would also require specific labeling for compounded drugs and would improve communication between state and federal regulators.
Meanwhile, a host of serious allegations against NECC and other compounding pharmacies is the subject of an ongoing federal investigation. Most recently, a bipartisan group of representatives from the House Energy & Commerce Committee asked the International Academy of Compounding Pharmacists (IACP) to release any documents showing it may have encouraged NECC to impede the FDA from evaluating the efficacy and safety of their products. The IACP responded by attacking the Massachusetts board of pharmacy and the FDA, both of whom have received heavy criticism over their alleged inaction against NECC.
Without a doubt, the NECC saga has been one of the biggest products liability news items in 2012, and we will continue to monitor developments as we enter the new year.
On the litigation front, a key question is how the multitude of claims will be adjudicated, given that affected plaintiffs hail from at least 19 states. On Jan. 31, 2013, the U.S. Judicial Panel on Multidistrict Litigation will consider just that when it decides whether to consolidate the federal suits against NECC (In re New England Compounding Pharmacy Products Liability Litigation, J.P.M.L., MDL No. 2149). Plaintiffs Brenda and Robert Bansale have sought consolidation of the cases against NECC, urging the MDL panel to send the suits to the U.S. District Court for the District of Minnesota. NECC supports consolidation, but not the plaintiffs’ choice of forum. In response to the plaintiffs’ petition, NECC asked the panel to transfer litigation to the District of Massachusetts.
Since the Judicial Panel was created in 1968, multidistrict litigation under 28 U.S.C. § 1407 has become somewhat routine: as of September 2012, 59,657 civil actions were pending in 293 MDL dockets. In most cases, the MDL panel’s decisions are not especially controversial. 28 U.S.C. § 1407 provides that civil actions may be transferred for coordinated or consolidated pretrial proceedings when they (1) “involv[e] one or more common questions of fact”; (2) the transfers “will be for the convenience of the parties and witnesses”; and (3) the transfers will promote the just and efficient conduct of such actions.” This standard is fairly lenient, and will frequently be satisfied where numerous plaintiffs bring related cases against a single corporate defendant. The more controversial consolidation decisions are made in cases where plaintiffs seek coordinated proceedings against multiple defendants who are alleged to have engaged in the same or similar misconduct. Consolidation in these cases can cause numerous problems for individual defendants, and in those instances the MDL panel will be more likely to deny transfer and consolidation. Given that the lawsuits here are all against NECC and involve the same drug and adverse effects, and that NECC itself supports consolidation, the MDL panel will almost certainly agree to consolidate the cases.
In the meantime, a Massachusetts federal judge recently rejected NECC’s motion to stay lawsuits against it pending a decision by the MDL panel. In rejecting the stay, U.S. District Judge Dennis Saylor also decided to coordinate the 12 NECC cases currently before him, and is allowing discovery to proceed in federal court in Massachusetts. He agreed with the plaintiffs’ argument that early case proceedings such as document preservation discussions and answers to plaintiffs’ complaints would need to be accomplished regardless of whether the suits are centralized.
Widespread litigation has not been the only reaction to the deadly meningitis outbreak. Congress and the FDA have been investigating the NECC and other compounding pharmacies, and legislative action is underway. This particular outbreak sparked added controversy because compounded medications – such as the steroid manufactured by NECC – tend to exist in a regulatory gray area. Under the current regulatory scheme, if a licensed practitioner is tailoring drugs to fit individual patients’ needs (the practice known as compounding: compounded medications are so named because they are made by altering the ingredients of an existing drug), the federal agency generally leaves oversight to state pharmacy boards. Thus, in response to criticism that the FDA did not act when it was made aware of NECC’s alleged sterility problems as early as 2006, the agency argued that NECC fell through the cracks of a “patchwork” system that does not clearly give it authority over compounding pharmacies.
Lawmakers are currently working to fill the gaps in this regulatory scheme. H.R. 6638, introduced earlier this month by Reps. Rosa DeLaura, D-Conn., and Nita Lowey, D-N.Y., would require that compounding pharmacies register their facilities with the FDA and would establish an FDA database of information on registered compounders. The proposed law would also require specific labeling for compounded drugs and would improve communication between state and federal regulators.
Meanwhile, a host of serious allegations against NECC and other compounding pharmacies is the subject of an ongoing federal investigation. Most recently, a bipartisan group of representatives from the House Energy & Commerce Committee asked the International Academy of Compounding Pharmacists (IACP) to release any documents showing it may have encouraged NECC to impede the FDA from evaluating the efficacy and safety of their products. The IACP responded by attacking the Massachusetts board of pharmacy and the FDA, both of whom have received heavy criticism over their alleged inaction against NECC.
Without a doubt, the NECC saga has been one of the biggest products liability news items in 2012, and we will continue to monitor developments as we enter the new year.
Read more: http://product-liability.weil.com/legislation/update-courts-lawmakers-to-decide-fate-of-necc-in-wake-of-deadly-meningitis-outbreak/#ixzz2FTGuyFmU
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