News from the FDA, DOJ and the stock market
November 16, 2022 – This week The New York Times published an article by investigative journalist Christina Jewett with some updates on the status of the Philips recall and the various lawsuits that are pending.
To review, the problems with their various breathing devices became apparent by 2015 and Philips Respironics didn’t do anything at the time. According to the Food and Drug Administration (FDA), years went by before the “company made cursory efforts to examine the problem.”
In April of 2021, the company claimed that it “realized the flaking foam contained potentially cancer-causing particles, setting off the largest and most disruptive medical device recall in more than a decade.” Since then, the recall of nearly fifteen million devices worldwide has caused patients to endure long waits for a replacement device. Some patients are receiving “refurbished” devices which they are reluctant to use.
“The F.D.A. shares the frustrations expressed by patients who are awaiting a resolution for this recall,” Dr. Jeff Shuren, director of the F.D.A.’s device center, said in a statement. “We have employed rarely used regulatory tools to hold Philips accountable and we will continue to communicate with the firm to assure they take appropriate steps to correct the product.”
The DOJ and Philips in Negotiations
The U.S. Justice Department is now negotiating the terms of a consent decree with Philips, “underscoring the deep concern about what the company knew – or should have known – before millions of people received devices that many believe caused devastating illnesses.”
Roy Jakobs, chief business leader for Philips’ Connected Care unit, told investors this past July that “We are in confidential discussions. We cannot disclose yet what the terms are and what impact they will have, but we understand that you are very much interested in that and the moment we can share we will share more details around this.”
Financial Impact and Layoffs
Fallout from the recall has resulted in the market value and stock plummeting by 70 percent and the company has been forced to lay off thousands of employees.
More than 69,000 complaints pertaining to cancer, difficulty breathing, and chest pain are being reviewed. There are 168 reported deaths, although experts say it may be difficult to determine whether the device caused any singular illness or death.
Finding and contacting patients who have these devices has been hampered by poor record-keeping and the industry-wide absence of a device tracking system.
The FDA has done extensive document reviews and has inspected the Philips Respironics facility in Murrysville, Pennsylvania. They found that by 2015, the company had learned that the foam in the devices was degrading. Emails and test reports showed that the foam could break down in as little as a year.
Philips finally began a formal internal investigation in 2019, and issued the recall in June 2021. By December 2021, their hazard assessment concluded that the device fumes presented a moderate risk for injury, rather than a serious risk. The FDA, however, considered their test methods flawed. Steve Klink, Philips spokesman, has said “At this stage, we can only apologize for the concern that has arisen, and we are working really hard to get to the bottom of the actual health risks.”
The DisabledVeterans.org blog reminds veterans about possible benefits offset
The Honoring our Promise to Address Comprehensive Toxics Act of 2022 (PACT Act) that the Biden administration signed into law in August 2022 does include the Camp Lejeune Justice Act. This act made it possible for veterans and affected civilians to receive compensation for injuries due to exposure to the contaminated water at Camp Lejeune between August 1, 1953 and December 31, 1987.
Prior to the PACT Act, the Federal Tort Claims Act and 38 USC § 1151 established that veterans cannot collect twice for the same injury. Therefore it is possible that an offset to compensation through the VA, Medicare, or Medicaid will apply if the medical malpractice claims against the Department of Veteran Affairs is successful. This is also true for civilians.
It’s not clear how the safeguards against “double dipping” will be applied, but the PACT Act states:
2) Health and disability benefits relating to water exposure–Any award made to an individual, or legal representative of an individual, under this section shall be offset by the amount of any disability award, payment, or benefit provided to the individual, or legal representative–
(i) any program under the laws administered by the Secretary of Veterans Affairs;
(ii) the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.); or
(iii) the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.); and
(B) in connection with health care or a disability relating to exposure to the water at Camp Lejeune.
PACT Act § 804(e)(2).
It’s possible that the offset provision in the PACT Act will incorporate benefits and health care already paid plus future projected benefits and health care services. If a veteran is awarded compensation through litigation, the possible PACT Act offset would not apply to any awards for pain and suffering and loss of income. However, until clear guidance comes from the VA and Social Security on how they plan to implement the offset, it’s speculation at this point.
Mediation session scheduled for October 3
A federal judge has ordered additional mediation sessions in the ongoing efforts to settle 3M earplug lawsuits that have been filed on behalf of more than 250,000 military veterans. The initial 3M earplug settlement talks were held on September 15 and 16, before Special Master Randi Ellis. U.S. District Judge Casey Rodgers in the Northern District of Florida, who has been presiding over the multidistrict litigation (MDL), has issued a statement saying that the mediation “was worthwhile and productive” and has ordered Ellis to schedule another session to be conducted by October 3, 2022.
Judge Rodgers is also preparing multiple tracks of claims for trial and issued a separate order, reinstating the deadline for claimants to provide their DD214 forms along with completing census forms and continuing transitioning claims from an administrative docket to an active docket. In reinstating the filing requirements, the Judge added 56 days to the initial deadline to get these materials submitted and/or transitioned.
The Combat Arms earplugs sold to the military by 3M Company and its Aearo Technologies unit proved to be defective and failed to provide adequate protection to the service members who used them between 2004 and 2015. Plaintiffs’ claims vary, and the expected payout per person will range, depending on the extent and duration of each veteran’s hearing loss. Estimates of the total cost of a 3M settlement range between $10 billion and more than $100 billion, depending on how future claims are handled.
New Lawsuits Filed at the State Level
On September 14, law firm Baum Hedlund Aristei & Goldman filed 88 new lawsuits against GSK, Pfizer, Boehringer Ingelheim, and Sanofi in Delaware court on behalf of more than 7,000 claimants who allege that ranitidine heartburn products caused a variety of cancers.
And law firm Keller Postman filed claims on behalf of more than 10,000 clients from Delaware, California, Illinois, and Pennsylvania involving cancers no longer designated in the multi-district litigation created in 2020. The MDL now includes five types of cancer alleged to have been caused by ranitidine use—bladder, esophageal, gastrointestinal, liver, and pancreatic. Plaintiffs with breast, kidney, colorectal, prostate, and lung cancers are now pursuing their cases in state courts.
A Sanofi spokesperson said the recent surge in state court filings are due to plaintiffs who exited the federal multi-district litigation, or whose alleged injuries have been dropped from the MDL and reiterated their claim that there is no scientific evidence Zantac causes cancer.
Haleon Rejects Indemnification Requests
As reported by Reuters last week, London-based Haleon rejected indemnification requests from GSK (formerly GlaxoSmithKline plc) and Pfizer, with CEO Brian McNamara saying Haleon believes it is not liable for any claims that may arise from U.S. litigation over the heartburn drug, Zantac.
Zantac was originally marketed by a forerunner of GSK, and has been sold by several companies over the years, including Pfizer, Sanofi, Boehringer Ingelheim and many generic drugmakers.
In July, Haleon spun out of GSK as an independent company and comprises consumer health assets once owned by GSK and Pfizer. However Haleon has repeatedly said that it never marketed Zantac in any form in the United States, either as Haleon or GSK Consumer Healthcare.
Following a loss of market value due to uncertainty surrounding the litigation, McNamara wanted to make Haleon shareholders aware that they never agreed to accept a share of any liabilities if damages are accrued as a result of U.S. litigation over Zantac.
“We do not agree with Haleon’s position,” a GSK spokesperson said. “GSK believes that there are grounds for it to bring indemnification claims in respect of certain potential liabilities, including against Haleon.”
Pfizer was not immediately available for comment.
Attorneys for plaintiffs in Roundup lawsuits are urging the federal judge who is presiding over the pretrial proceedings to start “wrapping up” the Multi-district Litigation (MDL) Panel. Billions have already been paid in settlements, and lawyers want the remaining unresolved cases to be returned to U.S. District courts nationwide for trial.
Over the past seven years, Bayer and its Monsanto subsidiary have faced more than 120,000 product liability lawsuits alleging that consumers were not adequately warned about the risk of non-Hodgkins lymphoma (NHL) from Roundup.
The Roundup MDL was established in 2016, and U.S. District Judge Vince Chhabria in the Northern District of California has overseen coordinated discovery and a series of early “bellwether” trials to help gauge how juries are likely to respond to certain evidence and testimony that was repeated throughout the lawsuits.
Trials in 2018 and 2019 resulted in massive payouts, and since then, Monsanto has been attempting to settle individual injury lawsuits. Many plaintiffs have rejected the settlement offers and new claims continue to be filed as more former users develop cancer.
Plaintiffs submitted a statement this month stating that Monsanto still refuses to change the warning label on Roundup and is refusing to make meaningful attempts to settle remaining claims. As a result, lawyers have now scheduled a series of trials nationwide over the next ten months, and indicate that the time has come to “wind up” the Roundup MDL and start returning cases to U.S. District Courts nationwide if a global settlement can not be reached in the coming weeks.
Upcoming Roundup Cancer Trials
There are more than ten Roundup trials scheduled nationwide over the next ten months, none of which will be held in the federal court system. The upcoming trial dates include:
- 11/7/2022 – Langford v. Monsanto in California Superior Court (San Francisco)
- 11/29/2022 – Pied v. Monsanto in Hawaii Circuit Court (Hilo, Hawaii)
- 1/9/2023 – Griswold v. Monsanto in Missouri Circuit Court (St. Louis City)
- 1/23/2023 – Freiwald v. Monsanto in California Superior Court (San Francisco)
- 2/27/2023 – Chaplick v. Monsanto in Missouri Circuit Court (St. Louis County)
- 3/3/2023 – Weaver v. Monsanto in California Superior Court (San Diego)
- 4/3/2023 – Hedges v. Monsanto in Arizona Superior Court (Maricopa County)
- 4/24/2023 – Gordon v. Monsanto in Missouri Circuit Court (St. Louis County)
- 6/5/2023 – Lopez v. Monsanto in Florida Circuit Court (Wade County)
- 6/12/2023 – Moore v. Monsanto in Missouri County Circuit Court
- 6/26/2023 – Johnson v. Monsanto in California Superior Court (San Diego)
Plaintiffs argue that “the current ‘wave’ approach is not a viable, long-term plan for this MDL” and believe that as new cases are constantly being transferred from states to the MDL, waves will continue indefinitely. “Fundamentally, this MDL has accomplished nearly everything that should be expected of an MDL. Important common issues, such as preemption and general causation, have been vetted. Bellwether cases have been tried. Detailed orders concerning how to think about and adjudicate specific causation are available. Most cases have settled. Overall, this MDL has been a tremendous success,” according to the statement submitted by Plaintiffs Leadership attorneys. “It is, however, time to develop an exit plan – one that allows all the hard work that has been done to benefit cases as they are remanded back to their home jurisdictions for trial. In this vein, Plaintiffs propose a three-phase plan to wind up the MDL.”
Proposed Plan to Wind Up Roundup MDL
Phase One – One Last Attempt at Global Resolution
Plaintiffs propose that the Court give the Parties 60 days to see if they can negotiate a global settlement. If Monsanto does not want to engage in this process, then the Court would proceed to Phase Two.
Phase Two – Creation of Complete Trial Package
The Court would officially end the “wave” program and would order the Plaintiffs’ Leadership to update the existing trial package twice a year. This package would include exhibits, transcripts, videos, and depositions of each Monsanto witness, each third-party witness, each of Plaintiffs’ general causation experts, an outline for treating doctor depositions and much more, including PowerPoints, demonstratives, animations, outlines/binders, briefings, exhibits, and rulings from every trial, proceeding, appellate proceeding, discovery motion and more.
Once all of these materials are amassed, Plaintiffs’ Leadership would remain responsible for keeping the materials up to date, and Monsanto would need to cooperate with Plaintiffs in collecting documents and items from cases where Plaintiffs’ Leadership was not involved.
Phase Three – Wind up the MDL
Once the complete trial package exists, the Court would remand all cases still pending in this MDL to the appropriate federal district court, and the MDL would be terminated. The only cases remaining before this court would be the individual cases that were filed directly into the Northern District of California.
Monsanto Advocates For the Status Quo
In response to the plaintiffs’ proposal, Monsanto has requested that the Roundup MDL continue to prepare claims on a state-by-state basis, and push settlements through a court-ordered mediation process. They believe that the wave process is working well and they oppose terminating the MDL. In addition, Monsanto disagrees with many of the components of Plaintiffs’ proposed trial package.
Response from Plaintiffs’ Leadership states, “[A]lmost 2 years later, it is evidence that the current MDL mediation program is not advancing case resolution in a meaningful way. As an initial matter, because Monsanto must ‘approve’ the mediator’s offers, the offers made within the settlement program appear to be woefully inadequate. Thus, a substantial number of MDL cases remain unresolved by the settlement program, and it is highly unlikely that these cases will be settled absent a global resolution or imminent trial setting.”
Monsanto and Bayer are facing years of future litigation over Roundup, as unresolved claims work their way to trial and new lawsuits continue to be filed by individuals as more are diagnosed with non-Hodgkins lymphoma linked to use of the weed killer.
Bayer announced in 2021 that by 2023 it will remove glyphosate, the active ingredient that causes cancer, from Roundup sold to residential customers. However, glyphosate will still be used in products sold to agricultural businesses and farmers, and in product sold in other parts of the world.
Judge Chhabria has set a Status Conference for 11/9/22.