Life science companies doing business during a pandemic may believe that patients, judges and juries will look kindly on products that don’t perform as promised, but that may be an empty wish. Angela Seaton, an attorney with the D.C. office of Shook, Hardy & Bacon LLP, advised that companies that want to break into new markets because of pandemic-specific demand should do their homework, including a review of U.S. FDA warning letters.
Seaton was speaking on a webinar hosted by the Food and Drug Law Institute, and noted that some attorneys with the plaintiff bar are excited about the prospect of product liability lawsuits and workplace lawsuits engendered by the pandemic. Makers of drugs and devices might see typical product liability claims in any such lawsuits, but Seaton said a novelty will be allegations of a failure to deploy appropriate pandemic-related protocols for the workplace. She added, however, that under strict liability, any entity that is in the chain of distribution of a product found liable is subject to product liability litigation.
The FDA warning letter database includes a long list of warnings to fly-by-night companies alleged to have offered adulterated or misbranded products for the pandemic. One example of an FDA warning letter to a legitimate company is the July 24 warning to Coremedica Labs Inc., of Lee’s Summit., Mo. The letter addresses Coremedica’s promotion and distribution of a blood sample kit for serological testing that the agency said lacked any kind of authorization. Coremedica has had no difficulty with the agency in offering antibody tests for the pandemic, but the company ran afoul of the FDA because it hadn’t offered the agency evidence that its blood collection kit could ensure that the sample would arrive at the testing lab intact.
Warning letters provide a look at FDA’s thinking
Seaton said that when a company commences with plans to offer a product with which it has limited or no experience, it may be helpful to examine the associated regulatory requirements. Warning letters are a good source of insight into the agency’s thinking regarding the product, but she added that avoidance of liability might be aided by efforts to carefully craft any claims for the product.
Disclaimers regarding the performance of a product can provide some barrier to product liability litigation, but in the run-up to production, a company should “document what you’re doing and why you’re doing it,” Seaton said. It is critical to concurrently document the motivation and the underlying research behind going into production of that product to ensure the information is accurate.
Seaton said the FDA’s updated hand sanitizer guidance was practically a recipe that can help manufacturers stay out of the agency’s crosshairs, but noted that a warning letter gives the plaintiff bar a lever for litigation. The warning letter to Gojo Industries Inc., of Cuyahoga Falls, Ohio, regarding the company’s Purell hand sanitizer suggested that the FDA expected some sort of study to back the claims even though the product was marketed as an OTC product, an expectation fed by claims that the sanitizer could prevent disease transmission.
“After the warning letter came out, a flood of litigation followed” against Gojo, Seaton said, adding that while a defendant in such a lawsuit can recite the primary jurisdiction doctrine, this doctrine “is not an ace in the hole.” Most courts will use their discretion to defer to the FDA rather than engage in ad hoc lawmaking, although this is not guaranteed. One example of the primary jurisdiction doctrine at work is a class action in a district court case for the eastern district of California regarding cannabidiol (CBD) products. Seaton said the defendant in that case persuaded the judge to stay the suit “to allow the FDA some time to fill in the blanks” regarding its CBD enforcement policy. Still, Seaton said, that lawsuit will almost certainly resume at some point.
A company doing business in a new product area should undertake a litigation assessment before a lawsuit arises, and it is also important to preserve institutional knowledge of the development program to overcome any loss of information due to employee churn. Seaton added that a company might also identify potential witnesses should a liability claim or enforcement matter arise, adding that the FDA and the Department of Justice (DOJ) enforcement activities can run in tandem. The two agencies can also collaborate on the question of civil monetary penalties.
DOJ generally will not unilaterally examine FDA warning letters as source matter, but Seaton said the False Claims Act may be invoked, even if there is no raft of such legal actions on record. That view is backed by Ethan Davis, the deputy assistant attorney general for DOJ’s civil division. Davis said in a June 26, 2020, presentation to the U.S. Chamber of Commerce that the department will closely monitor potential fraud in development of drugs and devices developed for the pandemic. Sponsors must ensure that the data derived from and presented for those trials are accurate, Davis said, adding, “we will vigorously pursue claims against companies and executives that knowingly create or relay false or manipulated data in connection with clinical trials.”