Recently in Legal Category

Law professor Mark Hall (Wake Forest) makes predictions in the latest NEJM about the Supreme Court's decision on the recently argued Affordable Care Act (ACA)—specifically with respect to the constitutionality of the individual insurance mandate. (Although frankly, anyone who's been watching this story could make the same predictions.)

• The 4 Democratic appointees (Ginsberg, Breyer, Sotomayor, Kagan) will vote to uphold the ACA (and thereby the individual mandate).
• Consequently only 1 Republican appointee is needed to side with the Democratic appointees to uphold the ACA. However, there is "no clear support" from the 5 Republican appointees (Roberts, Scalia, Kennedy, Thomas, Alito). Nevertheless, Kennedy is historically a critical swing vote in close decisions, and his statements during the recent argument indicate that he is able to consider both sides of the issues.
  
• It is "very unclear" if the Supremes will toss the ACA, if the individual mandate is declared unconstitutional.
• While some justices appear to be against the Medicaid expansion (which was originally thought to be a non-starter), it is unlikely that there will be enough votes to 86 the provision.

A decision is expected by the end of June.

And at least one questionable wholesaler, Thomas Houghton through his UK-based River East Supplies, appears to be involved in both the February and most recent transactions.

The WSJ traces the route of fake Avastin that cropped up in the United States in February:

1. Swiss drug wholesaler Hadicon AG ordered Avastin from an Egyptian company, Sawa—the legitimacy of which is questionable.
2. An intermediary working for Sawa contacted a Syrian businessman, who located (the fake) Avastin in Istanbul, Turkey, from which the drug was shipped (through yet-another murky intermediary) to Hadicon.
3. Hadicon then shipped the drug to a Danish wholesaler, CareMed Aps in Copenhagen, which passed it onto River East Supplies in Nottingham, England.
4. River East Supplies then exported the drug to the United States through Montana Healthcare Solutions in Belgrade, Montana (which Houghton may have also owned). The fake Avastin was distributed to several oncologic practices (most of which are located in California or Texas) through Volunteer Distribution in Gainesboro, Tennessee.

In the latest case of fake Avastin (or really fake Altuzan) in the United States, the drug was imported again from Turkey (but this time from an unnamed or unknown source) to UK-based Richard's Pharma,* a licensed wholesaler. Richard's Pharma bought 120 packs of the counterfeit drug and exported 28 of these directly into America. The remaining 82 packs were sold to River East Supplies, which also exported the fake drug into the United States.

Not surprisingly wholesalers involved in both cases claim that they didn't know the peddled Avastin/Altuzan was fake. No matter: The FDA says that the importation of non-approved drugs into the United States is illegal.

* AKA Richards Pharma, Richards Services, Warwick Healthcare Solutions, or Ban Dune Marketing, Inc, according to the FDA.

From the FDA.

The facts (ma'am):

• A counterfeit version of bevacizumab, disguised as Roche's Altuzan—a brand that is approved in Turkey but not the United States—was recently discovered.
  
• The product "contained no active ingredient," although the agency didn't reveal what it did contain.
• The product (along with "other unapproved products") was obtained from Richards Pharma, aka Richards Services, aka Warwick Healthcare Solutions, aka Ban Dune Marketing, Inc.
• The FDA implies that Richards Pharma is generally a bad actor and that none of its products should be trusted.

The WSJ provides essential background on the story, including recent federal convictions of a former owner and an employee of Ban Dune Marketing for selling adulterated anti-cancer drugs (eg, Herceptin, Rituxan). These dubious drugs also reportedly bore tell-tale Turkish labeling. At least one Missouri oncologist who bought the fake drugs administered them to patients. Like the Ban Dune associates, the doctor pleaded guilty in February (specifically to ordering a drug that isn't FDA approved).

Image of packaging of fake Altuzan from FDA web site.

Today: Premature or ripe?
Tomorrow: Insurance mandate constitutional or unconstitutional?

The path of the fake Avastin that recently entered the United States is painfully complex and possibly a template for the terribly circuitous travel of questionable drugs throughout the globalized marketplace.

According to the latest coverage by the WSJ, the ersatz cancer drug—which possibly originated in China (where else, folks, where else?)—traveled through Turkey and Egypt before being sold by Swiss and/or Danish wholesalers to a UK-based wholesaler. From the UK, the phony vials were sold and imported into the US by a Canadian, Thomas Haughton, who lives in Barbados and manages a "network of drug distributors," including the UK wholesaler, River East Supplies, Ltd.

As well, Haughton owns or manages a Barbados-based holding company that acquired Montana Healthcare Solutions in 2010. Montana Healthcare Solutions, the reported contact for which is (or was) one Paul Bottomley in tiny Belgrade, sold the fake Avastin to 19 medical practices, most of which are in California. The drug was then shipped or distributed by the Tennessee-based Volunteer Distribution, the management of which is pretty damn sketchy.

The FDA is leading the necessarily complex federal investigation, but the US Attorney in Los Angeles is also issuing subpoenas to the California practices, writes the WSJ. The paper adds that Haughton had no idea that the Avastin was fake (despite the product's rock-bottom price). Furthermore Haughton "no longer does business with" the Tennessee distributor (although this end-of-the-line company, whatever it is, may be a mere scapegoat for the much-more globally connected Haughton).

Here's hoping that news sources like the WSJ stay on top of this developing story.

This week's NEJM offers a very nice we-are-here review of the status of PPACA (aka ObamaCare) and the Supremes' anticipated review of the appellate case, Florida v HHS (which challenges the constitutionality of the law), on March 26th-28th. The 4 questions that the ultimate court will address in the ultimate appeal of this case, according to authors Curfman et al, are the following:

1. Whether contesting the law is premature. In other words, can the legality of a tax (or penalty or whatever) for not buying health insurance be challenged before the tax is levied (in the case of PPACA, in 2014)?
2. If the Supremes decide that a legal review is not premature (ripe?), does Congress have the authority to mandate the purchase of health insurance or levy a tax (or penalty or whatever) for not doing so? Evidently much of this decision rests on the interpretation of the Commerce Clause. A related concern is whether Congress can tax (penalize, whatever) US citizens for not buying a product from a private entity (eg, health insurance or, by extension according to one lower-court judge, a car or broccoli).
3. If the mandate is unconstitutional, the Supremes must then decide if the mandate can be excised from the law or if the entirety of PPACA must be tossed.
4. Last the Supremes must determine if PPACA's expansion of Medicaid exceeds the authority of the federal government to regulate states' voluntary operation of Medicaid programs. Curfman et al note that lower courts have considered this argument a non-starter, but the high court said it would consider it anyway.

Also the NEJM provides yet-another neato, interactive graphic of the case decisions to date.

• 7 at the district court level (1 dismissed, 3 in which PPACA was upheld, 3 in which PPACA was unconstitutional).
• 6 at the appellate court level (4 dismissed, 2 in which PPACA was upheld, 1 in which in which PPACA was unconstitutional)

The one appellate case in which PPACA was determined to be unconstitutional, Florida v HHS, is the case that will be considered by the Supremes later this month.

PPACA = Patient Protection and Affordable Care Act.

Sherley et al v Sebelius et al. The case that won't go away...to the chagrin of scientists who rely on government funding for research with human embryonic stem cells (hESCs).

The Nature News Blog reports today that scientists James Sherley and Theresa Deisher, who choose to work with adult stem cells, are appealing Judge Royce Lamberth's reluctant decision in July to shoot down a permanent injunction against federal funding for hESC research. The scientists submitted their legal brief yesterday to the US Court of Appeals for the DC Circuit. The appeals court, which ruled against Sherley et al last April (with respect to their request for a preliminary injunction), will hear oral arguments on April 23rd in this new appeal to overturn Lamberth's ruling against a permanent injunction.

But a similar decision granting federal funds for hESC research by the appeals court is not a given. The randomly selected, 3-judge panel for the April hearing will be somewhat different than the one that ruled last year, the Nature News Blog reveals. The judges for the upcoming appeals hearing will be Republican appointees Chief Judge David Sentelle, Judge Janice Rogers Brown, and Judge Karen LeCraft Henderson. The lone, common panel member is Henderson, who dissented in the previous appeals hearing by calling the government's favorable interpretation of existing law (ie, the highly ambiguous Dickey-Wicker amendment) "linguistic jujitsu."

Image of undifferentiated hESCs from http://www.nih.gov/catalyst/2007/07.01.01/page1.html. 

By way of Pharmalot:

Cheng Yi Liang, 57, pleaded guilty yesterday to securities fraud and "making a false statement," after the SEC charged the former FDA chemist in March with insider trading (for background, go here). The maximum sentence for the first count is a 20-year prison term followed by a 5-year supervised release and a fine of $5 million. For count two, Liang could be imprisoned for 5 years and fined $250,000. An alternative fine could also be ordered for Liang, the plea agreement indicates: twice his gross gain or loss—or about $7.5 million by my calculation. A guilty plea also may endanger his immigration status (it is not stated in the agreement what Liang's immigration status is, however).

The plea agreement also argues that Liang's offenses are especially egregious because of the amount of money he earned through insider knowledge, the "sophisticated means" by which he earned it, and the fact that he was in a "position of public trust" as an FDA employee. Liang has evidently agreed to forfeit his $3,776,152 in gains through his TDAmeritrade and other accounts, as well as some vital real estate (eg, his residence in Gaithersburg, Maryland, and the home of his son, "A. L.").

Pharmalot also reports that Cheng Yi Liang's son, Andrew Liang, pleaded guilty last month to one count of possessing child pornography (yeesh), which was discovered in the government's investigation.

It's still not clear what tipped off the feds to the elder Liang's trading activities, but Derek Lowe's original thought about the profits Liang realized from the surprise approval of the antipsychotic iloperidone (Fanapt; Vanda Pharmaceuticals) remains highly plausible.

This week's NEJM provides a useful barometer article, including a neato graphic timeline, on the litigation status of [PP]ACA ("Not So Fast—Jusisdictional Barriers to the ACA Litigation"). Thanks, Mssrs Jost and Hall.

Their salient points:

• So far, ~30 lawsuits have been filed against the ACA.
• A Supremes' decision in June 2012 is likely, given the admin's petition for their review on September 28.
• The jurisdictional issues generally, which are somewhat intertwined, rest on one of the following:
• Whether Congress exceeded its constitutional authority when imposing the individual mandate to purchase insurance.
• Whether state or individual plaintiffs have standing when challenging the ACA—particularly, in the latter case, before the "meat" of the ACA (eg, the individual mandate) goes into effect in 2014.
• Whether grievances are sufficiently ripe—meaning whether cases have been filed prematurely (before the "meat" of the ACA goes into effect in 2014).
• Whether the fine for not purchasing insurance is a penalty or tax or something else altogether (eg, an "exaction"*) and whether the label really makes any difference (the answer: it seems to; in fact, maybe big time).

My favorite part of the article, however, is the reference for the table outlining the status of 6 ACA cases.** It is the ACA Litigation Blog (a blog!), evidently run by Santa Clara law professor Brad Joondeph. Har-dee-har-har, NEJM.

ACA = Affordable Care Act.

* Haven't heard that one yet.
** For scorekeepers: 1, it's constitutional; 1, it's unconstitutional; 4, no jurisdiction; 1, decision pending.

Most US physicians will be sued at some point during their medical career, says a newly published malpractice-claims study in the NEJM. And for those clinicians in high-risk specialties,* the chance of being sued by the age of 50 approaches 100%. That's sobering news for every physician, who already knew that the odds of a malpractice suit—whether frivolous or no—were high, but who maybe didn't know that they were THAT high.

The study results also, perhaps ironically, support a nihilistic attitude among practitioners, who maybe (maybe) would have been enthusiastic about measures to reduce the risk of a malpractice suit. But given the reported odds now, they might think Why bother?

The happier news from the study (at least from the physicians' and insurer's perspectives): A minority (22%) of malpractice claims lead to a payment.

The quasi-perplexing news: Higher payments aren't necessarily from more frequently sued docs. The average payout from neurosurgeons, $344,811, was substantially less than that from pediatricians, $520,924—despite the fact that a neurosurgeon is about 6 times more likely to be sued in a given year than a pediatrician.

* Surgical specialties, gastroenterology[?], ob-gyn.