The Supremes Shape Pharma - Pharmaceutical Executive


The Supremes Shape Pharma

Pharmaceutical Executive

Supporting Litigation

Other rulings, though, open drugmakers to lawsuits from shareholders and consumers for withholding safety information. The Court decided that Matrixx Initiatives erred in failing to inform investors that its Zicam over-the-counter cold remedy caused people to lose their sense of smell. Matrixx claimed that only a few, insignificant adverse reports were involved, but the justices determined that the problems were important and should have been disclosed. The decision permits a stockholder suit against Matrixx to proceed; it also may prompt pharma companies to exhaustively disclose adverse events reports in future Securities and Exchange Commission filings.

Similarly, the High Court decided to permit West Virginia plaintiffs to proceed with a class-action lawsuit against Bayer AG involving Baycol, a cholesterol-lowering drug that was linked to serious adverse events and as such withdrawn from the market 10 years ago. The Supreme Court overturned a lower court's decision tossing out class-action certification. Bayer has already paid out more than $1 billion to settle thousands of claims, and may face more.

The Baycol case will have little impact on class-action litigation overall in light of the High Court's subsequent decision on the high-profile Dukes v. Wal-Mart case. In a 5-4 opinion cheered by the business community, the Justices blocked a mega class-action case against Wal-Mart, arguing that the potentially huge number of disgruntled women employees did not fit the criteria for a legal "class."

Free Speech Champion

Probably the most important pharma case struck down a 2007 Vermont law prohibiting the collection and sale of physician prescribing data. In his opinion for the majority in this 6-3 decision, Justice Anthony Kennedy said that the Vermont law violates the right to free speech of the data mining and drug companies, while the dissenters argued that the state policy was a constitutional regulation of commercial business. Sorrell v. IMS Health centered on whether data miners could gather information from pharmacies about physician prescribing and sell that data to drug companies for marketing and other uses. Vermont lawmakers claimed their law protected physician privacy, but acknowledged that it also aimed to counter brand marketing and encourage generic prescribing.

The ruling dismayed Vermont physicians, and the American Medical Association complained that every doctor has "the unequivocal right to decide whether his or her individual prescribing data is shielded from pharmaceutical detailers." The majority wrote that the free flow of information has "great relevance in the fields of medicine and public health," and IMS officials crowed that transparency and access to information is "essential to improve patient care and safety." The Vermont law is a "transparent attempt to censor industry speakers," said Coalition for Healthcare Communication executive director John Kamp, noting that good data is key to making informed healthcare decisions. The Justices also sent a similar Maine law back to a lower court for review, and a New Hampshire policy may fall by the wayside.

Patents and Innovation

The current Supreme Court also seems interested in clarifying patent and intellectual property issues, as seen in three patent cases decided this past term. Most prominent was the Microsoft v. i4i case, which addressed the standard of proof for challenging patents. The narrower Stanford v. Roche case pitted the drug company and an individual inventor against Stanford University over assignment of patent rights under the Bayh-Dole Act. The Supremes agreed that a Stanford researcher, who also worked for a biotech company later purchased by Roche, had authority to assign his patent rights to the company even though his work was supported by federal funds. The decision clarified that the university has limited power to control rights to faculty discoveries and collaboration of researchers with private firms.

Jill Wechsler is Pharmaceutical Executive's Washington correspondent. She can be reached at


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