Newsletter3.16.09

FDA REGULATORY COUNSEL
HEALTH LAW & POLICY NEWSLETTER
contact us for additional information on any topic mgilmore@fdaregulatorycounsel.com MEDICAL DEVICE NEWS


Fed. Circ. Upholds $5M Patent Judgment For Alaris
A federal appeals court has affirmed a decision that Alaris Medical Systems Inc.’s medical valves did not
infringe ICU Medical Inc.’s patents as well as an award to Alaris of nearly $5 million in legal fees and
costs.

Signet Bid For Sanctions Fails In Lens Patent Feud
Lens maker Carl Zeiss Vision International GmbH won't face the discovery-delay sanctions called for by
rival Signet Armorlite Inc. in an ongoing spat over a patent covering spherical spectacle lenses, but must
comply with a court order to produce relevant documents, a magistrate judge has found.

Electrode Co. Tweaks Claims In Antitrust Suit
Alternative Electrodes LLC filed an amended complaint Thursday in its case against Empi Inc. and Encore
Medical LP, which omits a common law conspiracy claim but still accuses the defendants of violating the
Sherman Act by taking steps to maintain a monopoly on electrodes for a device that helps people
swallow.

Boston Scientific, J&J Unit End Aneurysm Patent Spat
Just two days before going to trial, Johnson & Johnson unit Cordis Neurovascular Inc. and Boston
Scientific Corp. settled their long-running dispute over three patents related to a device for treating
aneurysms, less than a year after a judge ruled that Cordis had infringed two of the patents licensed to
Boston Scientific.

Breast Implant Case Preempted By Riegel: Judge
Citing preemption by federal law, a federal judge has dismissed a products liability case against Allergan
Inc. accusing the company of making silicone breast implants that were unreasonably dangerous.

Bug In Cardinal Drug Pump Could Trigger Wrong Doses
Cardinal Health Inc. has reported a “potential risk” in one of its drug pumps that could deliver the wrong
amount of medicine, just a few weeks after it signed a consent decree with the U.S. Food and Drug
Administration clarifying recall protocol for its pumps.
Covidien Tracheostomy Tube Recall Listed As Class I
The U.S. Food and Drug Administration has listed Covidien Ltd.'s nationwide recall of some its pediatric
tracheostomy tubes as a Class I — the most serious type of recall in which there is “a reasonable
probability that use of these products will cause serious injury or death.”

Grand Jury Probes Stryker Over Device Marketing
Federal grand jurors are investigating whether Stryker Corp. subsidiary Stryker Biotech illegally promoted
its medical products and filed false reports with the U.S. Food and Drug Administration, the medical
technology company revealed Tuesday.

Investor Class Approved In Suit V. Boston Scientific
A judge certified a class of shareholders Tuesday in a long-standing consolidated securities fraud action
against Boston Scientific Corp. and several of its executives alleging the biotech company failed to
disclose information about the recall of one of its stents.

Judge Tosses Medtronic Securities Class Action
A judge has dismissed a securities class action against Medtronic Inc. that alleged the medical device
giant covered up fatal defects in its defibrillators and was responsible for the company's stock price
collapse in 2007.
Medtronic Plaintiffs Can Revise Pleadings Post-Wyeth
Following the U.S. Supreme Court’s tectonic ruling in Wyeth v. Levine, a federal judge has allowed
plaintiffs in the multidistrict litigation over Medtronic Inc.'s Sprint Fidelis defibrillator leads to revise their
proposed pleadings.
Preemption Motion Withdrawn In NuvaRing MDL
Days after the U.S. Supreme Court's decision in Wyeth v. Levine, attorneys for Organon International Inc.
in the multidistrict litigation over its NuvaRing contraceptive have withdrawn a motion that sought
summary judgment on preemption grounds.
FDA, Device Firms Take Initiative With New Pediatric Projects
FDA and industry are collaborating on a handful of pediatric device development projects, building on
requirements from Congress. The 2007 FDA Amendments Act includes the Pediatric Medical Device Safety
and Improvement Act, with incentives for industry and researchers to focus on designing devices for
children. Among other things, the law requires FDA, the National Institutes of Health and the Agency for
Healthcare Research and Quality to submit to Congress long-term plans for spurring pediatric device
development.

Senator looks into FDA approval of ReGen knee implant
Sen. Chuck Grassley, R-Iowa, sent letters to ReGen Biologics and the FDA requesting information related
to the agency's approval last fall of a knee implant made by ReGen. Grassley's inquiry comes after a
report in The Wall Street Journal on Friday about a controversy surrounding the approval.

Stryker faces federal investigation in Massachusetts
The U.S. Attorney's Office for the District of Massachusetts is conducting an investigation into allegations
that Stryker Corp. illegally promoted its human bone growth products, the company said in a regulatory
filing. Stryker also said it is being investigated for possibly selling misbranded medical devices and
submitting to the FDA documents containing falsified data.

Medtronic MDL Judge Refuses Recusal
The federal judge overseeing multidistrict litigation involving Medtronic Inc.’s Sprint Fidelis defibrillator
leads has refused to recuse himself from the proceedings despite allegations by the plaintiffs’ attorneys
that he failed to disclose that his son works for a law firm with Medtronic connections.

Fed. Circ. To Go En Banc For Method Claims Question
Addressing an issue in a long-running intellectual property dispute between Guidant Corp. and St. Jude
Medical Inc. over implantable defibrillators, the U.S Court of Appeals for the Federal Circuit is preparing
to hold an en banc hearing over a question about companies’ ability to extend their patent rights to
activities overseas.

Medical Cos.' Success With Riegel May Be Short-Lived
While the U.S. Supreme Court's recent preemption decision in Wyeth v. Levine was a blow to drugmakers,
medical device makers have had great success in the year since the high court made a pro-preemption
ruling in the high-stakes Riegel v. Medtronic — but Congress could put an end to that success.

Steris Settles Class Action Over Reneged Benefits
Medical-device sterilization company Steris Corp. has settled a class action by former workers who
claimed the company unlawfully curtailed the lifetime medical benefits guaranteed under their collective
bargaining agreement.
OTHER HEALTH LAW & POLICY NEWS

Schering-Plough To Settle Securities Suit For $165M
After announcing its $41 billion merger deal with Merck & Co. earlier in the week, Clarinex maker
Schering-Plough Corp. on Friday confirmed a $165 million deal that settles a consolidated securities class
action over the drugmaker’s alleged failure to disclose information about the manufacturing safety
problems that led to a delay of the drug's release.

$46.8B Roche, Genentech Deal Ends Shareholder Suit
A consolidated shareholder derivative lawsuit is being wrapped up as part of a $46.8 billion deal that will
see Roche Holding AG acquire the Genentech Inc. stock it doesn't already own for $95 a share, according
to an attorney for the plaintiffs.
Healthways, US Settle Kickback Case For $40M
Healthways Inc. on Friday announced a $40 million settlement with the U.S. government in a 15-year-old
whistleblower lawsuit alleging a kickback scheme at a diabetes care chain formerly owned by the
Nashville-based health care provider.

GSK Could Face Punitive Damages Over Paxil Case
A district judge has denied a summary judgment to GlaxoSmithKline PLC, ordering documents the drug
manufacturer said contain trade secrets unsealed, and paving the way for punitive damages in a product
liability case filed by a user who claims the antidepressant Paxil was a factor in his suicide attempt.

KV Sued Over Layoffs Following Production Freeze
KV Pharmaceutical Co. has been hit with a class action alleging that it laid off about 1,000 workers last
month without giving them adequate notice after it froze production and recalled most of its products
earlier this year.

MedQuist, SEC Settle; Execs Still On Hook For Fraud
The U.S. Securities and Exchange Commission on Thursday settled two suits with medical transcription
company MedQuist Inc. and a former executive, and filed a third suit alleging that two former executives
committed fraud and violated other federal securities laws by overcharging customers. The SEC alleges
that MedQuist was inflating customer bills to puff up its balance sheet.

NJ Appeals Court Nixes $2.6M Ruling Against Roche
In a boost for Hoffmann-La Roche Inc., a New Jersey appellate court has vacated a judgment that
awarded $2.6 million to a man who claimed he had to have surgery to remove his colon after taking the
acne treatment Accutane.

Oxycodone Method Obvious: Fed Circ.
An appeals court on Wednesday affirmed a U.S. Board of Patent Appeals ruling that a potentially less
toxic method for preparing the pain reliever oxycodone was obvious, barring both parties in the dispute –
who each claim to have discovered the process – from moving forward with their respective patent
applications.

Mylan Denied Summary Judgment In Antitrust Case
A federal judge has refused Mylan Laboratories Inc.'s bid to dismiss claims related to the anti-anxiety drug
lorazepam in a lawsuit alleging the drugmaker conspired with competitors to inflate drug prices.

Everett Bests Breckenridge Vitamin Patent Challenge
A federal judge on Thursday tossed Breckenridge Pharmaceutical Inc.'s attempt to invalidate rival Everett
Laboratories Inc.'s patents for a prescription multivitamin, finding Breckenridge’s action overhasty and
unfounded.

Plaintiff Asks To Unseal Seroquel Materials For FDA
A man who claims that AstraZeneca Pharmaceuticals LP's Seroquel XR caused his diabetes has asked a New
Jersey judge to unseal discovery materials related to clinical trials of the drug in order to share the
information with the U.S. Food and Drug Administration as it considers widening the anti-psychotic's use
as an antidepressant.

Bill Aims To Create Approval Process For Biosimilars
A bipartisan group of lawmakers has introduced a bill that would create a regulatory process allowing the
U.S. Food and Drug Administration to approve affordable generic versions of biologic drugs.

Novartis Unit Settles Shareholder Action For $30M
A federal judge has given his final approval to a $30 million securities class action settlement between
Novartis Vaccines & Diagnostic Inc. and its shareholders, bringing to a close five years of litigation over
the company's failed flu vaccine.
Amgen Settles Ky. Medicaid Fraud Suit For $2.4M
Amgen Inc. has reached a $2.4 million dollar settlement with the Kentucky attorney general, putting to
rest charges that the pharmaceutical company inflated the average wholesale prices of prescription drugs
causing the state's Medicaid program to overpay for medications.

Genzyme Warned Over Procedures At Drug Plant
The U.S. Food and Drug Administration has threatened to withhold approval of Genzyme Corp.'s drug
shipments and to delay approval of its drug Lumizyme, a treatment for Pompe disease, after inspections
revealed “significant deviations” from manufacturing protocols at a Massachusetts plant.

Sepracor Makes Peace With Barr Over Xopenex
Sepracor Inc. has reached a settlement agreement with Barr Laboratories Inc. that will put to rest nearly
two years of feuding over a group of patents covering the inhaled asthma treatment Xopenex, which Teva
Pharmaceuticals USA Inc. subsidiary Barr will be allowed to market generically in 2013.

Seroquel MDL Judge Upholds Ban On Foreign Evidence
AstraZeneca LP has prevailed in its battle to keep out evidence of overseas regulatory actions from
upcoming trials in multidistrict U.S. litigation over the drugmaker's blockbuster anti-psychotic medication
Seroquel.

Wyeth Loses Bid To Drop Copyright Suit Over Ads
Finding that the drugmaker is unlikely to prevail with fair-use arguments, a federal judge has refused a
bid by Wyeth Pharmaceuticals Inc. to drop a copyright suit over a Puerto Rican artist's claims that the
company used an image of her artwork in a public-service ad campaign without permission.

Life Tech Targets Oxford's $173M Royalty Claim
Life Technologies Corp. is seeking to invalidate an Oxford Biomedical Research Inc. patent at the heart of
a $173 million contract dispute over the patent’s method of purifying proteins in engineered DNA.

Ex-Exec To Admit Faking Cancer To Duck SEC
The former head of regulatory affairs at Biopure Corp. will plead guilty to faking terminal colon cancer to
thwart U.S. Securities and Exchange Commission litigation alleging the company and its employees lied to
investors about its blood substitute.

Dr. Reddy's Generic Doesn't Infringe Prilosec: Judge
A federal judge has dismissed AstraZeneca AB’s patent lawsuit against Dr. Reddy’s Laboratories Ltd. over
the generic formulation of popular over-the-counter antacid medication Prilosec.

Senate Dems Pass $410B Spending Bill
Senate Democrats staved off Republican dissent late Tuesday night, approving a $410 billion
appropriations bill authorizing extra spending in areas such as energy, employment, financial services and
health care for the fiscal year.

Teva Hit With TRO Amid Lilly Evista Feud
Generic-drug maker Teva Pharmaceuticals USA Inc. has been slapped with a temporary restraining order
barring it from launching a copycat version of Eli Lilly & Co.'s blockbuster osteoporosis drug Evista amid an
ongoing patent litigation trial.

Flonase Antitrust Plaintiffs Can Revise Class Bid
The judge overseeing multidistrict antitrust litigation over nasal spray Flonase has given plaintiffs in the
case a chance to revise their motion for class status in light of the U.S. Court of Appeals for the Third
Circuit's recent ruling that set a higher bar for certification.

Patent Act’s Damages Measure Sparks Debate
Reducing damages awarded in patent infringement litigation — one of the controversial measures that
kept the U.S. Senate from passing patent reform legislation last year — once again held the spotlight at a
Tuesday hearing on the latest version of the bill set to overhaul the U.S. patent system.
SF Employer-Funded Health Care Appeal Nixed
San Francisco's controversial program requiring employers to spend specific amounts on employees' health
care may be headed for a showdown in the U.S. Supreme Court, with the U.S. Court of Appeals for the
Ninth Circuit shooting down a bid by a group representing restaurant operators to revisit an earlier
decision finding the program legal.
Merck, Schering Merger Puts Pressure On Regulators
Merck & Co.’s plan to merge with Schering-Plough Corp. in a $41.1 billion deal announced Monday is
prompting questions over how antitrust regulators will tackle the second proposal in as many months to
combine two pharmaceutical industry giants.

Schering Merger Includes Legal Headaches For Merck
As Merck & Co. prepares to join forces with Schering-Plough Co. in a $41.1 billion deal, the drugmaker
stands ready to inherit a host of legal problems — including antitrust, employment, intellectual property
and product liability suits — right along with an expanded arsenal of drugs and medical technology.

Watson To Pay Elan $18M To Settle Naprelan IP Suit
Watson Pharmaceuticals Inc. will pay $18 million to Elan Corp. PLC to settle patent litigation over
Watson's generic version of Naprelan, or naproxen sodium tablets, Watson announced Friday.

High Court Won't Hear Apotex Appeal Over Prilosec
The U.S. Supreme Court has declined to hear an appeal from Apotex Corp. in an infringement dispute with
AstraZeneca AB over patents for the heartburn medication Prilosec.

FDA Reprimands Gilead Over Letairis Statements
The U.S. Food and Drug Administration has chastised Gilead Sciences Inc. for a sales representative's
“false and misleading” statements that misbranded the hypertension drug Letairis and minimized “serious
risks” associated with the medication.

NY Hospital, Nurses Settle Antitrust Suit For $1.25M
Two nurses in upstate New York who have accused several area hospitals of conspiring to keep nurses'
salaries artificially low have reached a $1.25 million settlement with Northeast Health, one of five
defendants in the case, after a federal judge agreed last year to certify a class of more than 2,000 nurses
in the area.

Texas Doctor Off Hook In $14M Liability Award
The highest court in Texas on Friday struck down a doctor's portion of a $14 million medical liability
judgment, remanding the case back to a trial court, but upheld the judgment insofar as it pertained to
the doctor's insurer.

Sens. Introduce Bill To Limit Protective Orders
Two lawmakers have introduced legislation in the U.S. Senate that would require courts to weigh public
health and safety against secrecy concerns before sealing certain information included in litigation
settlements.
Obama Kills Bush-Style 'Signing Statements'
President Obama has ordered executive officials to consult with Attorney General Eric H. Holder Jr.
before relying on signing statements used by former President Bush to bypass statutes, saying the
directive will ensure that the statements are reasoned on constitutional grounds.
UnitedHealth Wants Insurers To Foot $400M Bill
UnitedHealth Group Inc.'s battle with a group of managed care liability insurers heated up Thursday, with
the company arguing the insurers are contractually obligated to reimburse it for defense fees and costs as
well as $400 million in settlements it recently reached over alleged out-of-network reimbursement rate
manipulation.

Cornell Med School Settles NIH Fraud Suit For $2.6M
Over the objections of the whistleblower in the suit, a federal judge has allowed Weill Medical College of
Cornell University to pay $2.6 million to settle government allegations it fraudulently obtained research
grants from the National Institutes of Health.

Tobacco Cos. Win Dismissal Of Medicare Tax Spat
A federal judge has snuffed out a suit against Philip Morris USA Inc. and other tobacco companies that
sought to recover tax money spent on the treatment of Medicare patients’ tobacco-related illnesses.
HealthSouth CEO, Gov. Get Little Relief In 11th Circ.
A federal appeals court has affirmed the conviction and sentence of former HealthSouth Corp. CEO
Richard Scrushy, while upholding most but not all of the charges against former Alabama Gov. Don
Siegelman, in a case alleging campaign contributions in exchange for a seat on a state regulatory board.

Applera Wins Final Judgment In Enzo Patent Fight
Clearing the path for a possible appeal, Enzo Biochem Inc. vowed not to sue the former Applera Inc. over
a final patent in its long-running infringement suit, giving way to a final judgment in the defendants’
favor.

J&J Seeks To Halt Bausch & Lomb 'Raid On Talent'
Johnson & Johnson subsidiary Vistakon Pharmaceuticals LLC asked a federal judge Thursday to put an end
to Bausch & Lomb Inc.’s “flagrant pirating” of Vistakon’s sales force, days after filing suit over the alleged
wrongdoing.
Pediatrix Settles SEC Backdating Claims
Pediatrix Medical Group Inc. has reached an agreement with federal regulators settling claims that the
company backdated stock options grants to executives and employees from 1997 to 2000.

Plaintiffs Push To Alter Class Motions In Flonase MDL
Following a December ruling by the U.S. Court of Appeals for the Third Circuit that set a new standard for
considering class certification motions, the parties in multidistrict antitrust litigation over nasal spray
Flonase have agreed that the plaintiffs should be allowed to file amended motions for class certification.

Genzyme Sues Lupin Over Generic Renagel
Biotechnology company Genzyme Corp. has sued Lupin Pharmaceuticals Inc. to prevent it from marketing
a generic version of Renagel, a drug used to treat serum phosphorus in chronic kidney disease patients on
dialysis.


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