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From Health Law Daily, May 25, 2016

Patients’ claims fall short of standing in Genzyme drug shortage

By Anthony H. Nguyen, J.D.

An appellate panel affirmed a lower court’s dismissal of claims against Genzyme Corporation for the shortage of an FDA-approved drug that was the only available treatment for a life threatening disease. The lower court had granted Genzyme’s motion to dismiss the complaints in their entirety for failure to state a claim upon which relief may be granted. The appellate panel affirmed, but did so based on a lack of Article III standing rather than failure to state a claim (Hochendoner v. Genzyme Corp., May 23, 2016, Selya, B.).

Background. The lawsuit involved two putative national class actions, one brought in federal district court in Pennsylvania and the other in federal district court in Massachusetts. All the plaintiffs are individuals with Fabry disease, a genetic illness characterized by an inability to synthesize a key enzyme that helps the body break down fats. Left untreated, Fabry disease causes premature death from complications including renal disease, heart attack, and stroke. There is no cure for Fabry disease, but it is effectively treated with Fabrazyme®, the only FDA-approved treatment available in the United States.

Fabrazyme was developed at the Mt. Sinai School of Medicine (Mt. Sinai) with a grant from the National Institutes of Health (NIH). Mt. Sinai holds the production patent under the Bayh-Dole Act (P. L. No. 96-517), and has exclusively licensed the patent to Genzyme Corporation, the only U.S. supplier of Fabrazyme. In June 2009, due to various problems at its manufacturing facility, Genzyme was unable to manufacturer sufficient Fabrazyme to meet the demand for the drug. During this shortage, Genyzme adopted a rationing plan under which U.S. patients would be allocated less than the recommended dose, and newly diagnosed Fabry patients would not be prescribed the drug. In August 2010, Fabry patients asked the NIH to step in and exercise its “march-in rights” under the Bayh-Dole Act to allow other manufacturers to begin producing Fabrazyme. The NIH took no action based on representations from Mt. Sinai and Genzyme that it was able to fully supply Fabrazyme to the U.S. market.

After a hearing on Genzyme's motions to dismiss for failure to state any actionable claims, the lower courts in both instances dismissed the actions (see Producing an insufficient amount of a drug did not violate federal patent law, March 26, 2015). Though Genzyme did not challenge the patients’ standing below, the appellate panel addressed it because standing is a prerequisite to a federal court's subject matter jurisdiction, and the absence of standing may be raised at any stage of a case.

Actual harm. The appellate panel noted that it would make explicit what it had implied previously: at the pleading stage, the plaintiff bears the burden of establishing sufficient factual matter to plausibly demonstrate standing to bring the action. In the panel’s view, the case at hand hinged on the presence or absence of a plausibly pleaded injury in fact. Such an injury needed to be concrete and particularized, actual or imminent, and not conjectural or hypothetical.

According to the panel, the complaints, taken collectively, list each patient’s name and place of residence and proceed to allege that each plaintiff is a Fabry sufferer. The complaints proceed to set forth general information about each patient's history of taking Fabrazyme, typically in the form of an assertion that, prior to 2009, the particular plaintiff received a full dose of Fabrazyme but thereafter was limited to a reduced dose due to the shortage. The panel noted that no specific information was provided regarding the harm, if any, that has affected each individual plaintiff. Instead, the complaints offered only descriptions of generalized harms.

In support of professed standing, the patients had pointed to generalized assertions that Genzyme’s reduced dosage regime forced patients in the United States to forgo doses, resulting "in an increased risk and severity of acute adverse reactions.” The appellate panel found this argument unconvincing, as none of the patients had suffered an adverse event as a result of the diminished dose. In addition, there was no apparent ongoing risk of harm as the Fabrazyme shortage had long ended and all Fabry patients are now able to receive full doses of the drug. Thus, based on Article III standing, all claims were dismissed without prejudice.

Exception. One patient, who alleged that he was no longer able to take Fabrazyme after experiencing a severe reaction to the drug, did demonstrate specific injury. Specifically, the patient alleged that he was injured when he suffered an allergic reaction attributable to his exposure to a reduced dose of Fabrazyme. The appellate panel noted that monetary damages would redress this injury, even if imperfectly.

Thus, although Genzyme may have had no duty to provide this patient with a drug to treat his Fabry, it may still be responsible for taking care to make sure that any drug it did supply was safe for use. Because the lower court failed to address this particular instance, the appellate panel vacated this specific dismissal and remanded for reconsideration.

The cases are Nos. 15-1446 and 15-1447.

Attorneys: Matthew L. Kurzweg (Kurzweg Law Offices) for Anita Hochendoner. C. Allen Black, Jr. (The Law Office of Co. Allen Black, Jr.) for Philip Adamo. Robert G. Jones (Ropes & Gray LLP) for Genzyme Corp.

Companies: Genzyme Corp.

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