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Shannon P. Duffy

The Legal Intelligencer

11-02-2007

Breaking new ground in the area of drug products liability, a federal judge has refused to dismiss negligence and fraud claims against a research firm that allegedly conspired with a drug manufacturer to mislead the Food and Drug Administration.

In her 25-page opinion in Wawrzynek v. Statprobe Inc., U.S. District Judge Gene E.K. Pratter rejected the argument that a research firm owes no duty of care to a patient who was later harmed by a drug that won FDA approval as a result of falsified test results.

Instead, Pratter found that when a research firm oversees the clinical studies and is aware of the drug's potential side effects, it may be held liable to patients.

Significantly, Pratter also concluded that the plaintiff's state tort claims were not pre-empted by federal law because the drug manufacturer, Gliatech Inc., has pleaded guilty to criminal fraud charges.

The ruling is a victory for attorney Daniel L. Thistle of Philadelphia, who filed the suit on behalf of Eileen Wawrzynek, alleging that after doctors used the drug ADCON-L during a spinal surgery, she suffered complications that required a second surgery and left her permanently disabled.

Although ADCON-L was intended to prevent scarring in spinal surgery patients, the suit alleges that studies showed it was not effective and, in some cases, caused complications.

In March 2002, Gliatech pleaded guilty to federal criminal charges, including failure to notify the FDA of reportable events occurring in medical procedures; adulteration of a medical device; and submission of a report regarding a medical device that was false and misleading in a material respect.

According to Wawrzynek's suit against Statprobe, the FDA's approval of ADCON-L was the result of a conspiracy in which both the manufacturer and the lab manipulated data to make the drug appear effective.

Statprobe was hired by Gliatech to provide biostatistical services for a "double-blind" clinical study of the effectiveness of ADCON-L for use in some spinal surgeries.

In May 1998, the FDA granted conditional approval to Gliatech to manufacture and distribute ADCON-L. According to the suit, one of the conditions of approval was that "a final report for your U.S. clinical trial ... must be provided within three months of study completion."

When the study was completed, the suit says, Statprobe informed Gliatech that the data failed to show that the drug was effective.

But in January 1998, the suit says, at Gliatech's request, Statprobe provided Gliatech with the code to "unblind" the status of patients in the treatment and control groups. Gliatech personnel later performed a second reading of the studies that changed some of the data in a manner that made ADCON-L appear more effective, the suit alleges.

The suit says Gliatech provided the new data to Statprobe, which accepted the new study and altered its report to show that ADCON-L was effective.

In a motion for summary judgment, Statprobe's lawyers -- Joseph J. McHale, Jana Michelle Landon and Leslie Miller Greenspan of Stradley Ronon Stevens & Young -- argued that Wawrzynek's claims were barred by the statute of limitations.

But Thistle argued that the statute of limitations should be tolled under the discovery rule, because Wawrzynek was unable to discover Statprobe's role in the FDA fraud until she received documents in her suit against Gliatech -- an event that was significantly delayed by Gliatech's bankruptcy.

Statprobe argued that with reasonable diligence, Wawrzynek could have discovered Statprobe's role in documents filed with the Securities & Exchange Commission and in a newspaper article in the Cleveland Plain Dealer.

Pratter concluded that a jury must decide the issue of whether the statute of limitations should be tolled because Statprobe had failed to prove that Wawrzynek's efforts to discover her claim were less than diligent.

"Statprobe's arguments place a weighty responsibility on plaintiffs to scour the nation's newspapers for information related to their suit, a responsibility not reflected in case law," Pratter wrote.

"Plaintiffs are residents of Pennsylvania, and while it is true that the Plain Dealer is the self-proclaimed 'largest newspaper' in Ohio and is available online, plaintiffs are not required as part of the concept of reasonable diligence to troll the local media of the nation's cities for possible defendants with potential responsibility for their injuries," Pratter wrote.

Pratter also found that Thistle has a valid argument that the statute should be tolled because Statprobe fraudulently concealed its role.

"A jury could conclude here that Statprobe took steps to conceal its identity by preventing publication of its name in connection with Gliatech or ADCON-L," Pratter wrote.

Statprobe also argued that Wawrzynek was barred by federal pre-emption because it amounted to a claim of fraud on the FDA cast as a state law claim.

But Pratter found that although the U.S. Supreme Court barred such fraud on the FDA claims in its 2001 opinion in Buckman Co. v. Plaintiffs' Legal Committee, the facts of Wawrzynek's case showed that it qualified for the exception to that rule articulated in the high court's concurring opinion.

Statprobe argued that the Buckman decision mandated summary judgment in its favor because the claim centered on allegedly fraudulent statements and omissions to the FDA in the course of obtaining approval to market ADCON-L.

But Thistle argued that Wawrzynek's case fit into the exception to the total pre-emption rule of fraud on the FDA claims carved out by the concurring justices in Buckman.

If, prior to the state litigation, the FDA determines that a manufacturer committed fraud and takes steps to remove the harm-causing product from the market, the state-law fraud claim would not "depend upon speculation as to the FDA's behavior in a counterfactual situation, but would be grounded in the agency's explicit actions," the concurring justices said.

As a result, Thistle argued, the concurrence said such a claim is permissible because it "would supplement and facilitate the federal enforcement scheme." Pratter agreed that the case "essentially fits into the Buckman concurrence's exemption."

"While it is true that it was Gliatech, not Statprobe, that pleaded guilty to misconduct, and that Statprobe never has admitted to, pleaded guilty to, or been found guilty of any misconduct with respect to any of its activities ... the court sees no legal theory or compelling policy reason to allow Statprobe to use Gliatech and its wrongdoing as a shield," Pratter wrote.

"Because the FDA found that fraud and wrongdoing occurred during the ADCON-L approval process, the door to the Buckman concurrence was opened wide enough to allow both Gliatech and Statprobe to pass through," Pratter wrote.