Faced with bad news about an approved drug (e.g. anything from a rise in reports of adverse reactions among patients to FDA notification that a warning letter is in the mail) pharmaceutical companies naturally tend to focus on the crisis at hand: Can this lucrative product stay on the market, or is a recall inevitable? And if the drug can be saved, what can companies do now to help keep it on the market? Such questions must be asked and answered because according to the trade publication, Gold Sheet, an analysis of FDA data shows that a major recall is more likely than ever. For example, the number of drug recalls rose from 426 in 2008 to 1,742 in 2009. From a strategic standpoint, however, pharmaceutical companies sometimes fail to appreciate just how much their early responses to bad news about a product can shape both regulatory intervention and whether or not a company is or is not metaphorically pilloried in the press and slammed in court.
When faced with the prospect of the FDA issuing a warning letter about an approved drug, pharmaceutical executives can indeed take steps to minimize penalties and mitigate bad PR. The key is to think carefully about the implications of every action taken in response to the warning signs and to avoid common mistakes. Likewise, if a drug recall does become necessary, the response to these early warnings can make or break the litigation that follows.
Below are four "dos and don'ts" for dealing with FDA warning letters and the legal aftermath of drug recalls.
In today's regulatory environment, few, if any, pharmaceutical companies would be foolish enough to flagrantly ignore or refuse to cooperate with the FDA once bad news began rolling in about an approved drug. But suppose a company has started to hear reports of patients suffering, for example, serious neurological symptoms after taking a promising, newly approved drug. Assume, too, that independent research has linked our hypothetical drug, which promises to bring in sales of $1 billion a year, with such terrible complications. Given the importance of this product to the bottom line, even executives who would never flatly ignore the FDA might nonetheless be tempted to rationalize or downplay the bad news. "People are not taking the doses correctly," they might argue, "and doctors are misinterpreting what they are seeing—the relationship is one of correlation, not causation." In the face of convincing evidence to the contrary, however, such stalling tactics tend to do more harm than good. While keeping the drug on the market for a few more months will bring in extra revenue, the PR, regulatory and legal costs of avoiding the truth could hurt the company far more in the long run.
When it comes to questions about the safety of a product, a "wait and see" attitude can sometimes be prudent. After all, the company's due diligence process does take time, and no drug should be voluntarily recalled or its warning label changed without sufficient evidence.
Still, the window here closes fast. Once reports of adverse reactions start showing up in the medical literature, the company should take—and carefully document—immediate action. By launching an internal investigation sooner rather than later, the company stands to demonstrate its good-faith commitment to protecting the public. These investigations can sometimes help resolve the problem: An unforeseen interaction with another drug might prove to be the culprit, rather than the company's product alone. Altering the dosages for certain subsets of patients might reduce or eliminate the unwanted side effects. (Of course, the medical issues involved in these cases can be complex and difficult to communicate to the general public. You might hear, for example, that "Abacavir causes heart attacks." In reality, however, the situation is more nuanced: In 2008, the FDA informed healthcare professionals that serious and sometimes fatal hypersensitivity reactions caused by Abacavir are significantly more common in a certain subset of patients—those with a particular human leukocyte antigen allele called HLA-B*5701. This announcement came after the FDA reviewed data from two studies looking into this hypersensitivity issue. Rather than an outright recall of the drug, genetic tests are now available for patients considered to be candidates for taking Abacavir or Abacavir-containing medications.)
In any case, even if an internal investigation will likely confirm a company's worst fears about its product, the best approach is usually to act swiftly and transparently. Likewise, whenever you become aware of adverse reactions or other problems with a drug, reaching out to the FDA through proactive and well-documented self-reporting can be a great way to show regulators and the public that your company is intent upon behaving responsibly.
Given that pharmaceutical companies face a constant barrage of litigation, it is natural that executives have developed a healthy fear of "Perry Mason moments"—the plaintiff's attorney whips out an embarrassing email sent by the CEO, or plays a digital voicemail in which the CFO gripes about the cost of a potential recall. But as they respond to bad news about approved drugs, executives should endeavor to put aside such fears and, instead, strive to communicate openly and frequently. In any legal case, there will always be documents that can be used against you. But when pharmaceutical companies are found to have concealed pertinent evidence, either from the FDA or internally, the costs tend to be far higher than an embarrassing moment or two in court. Indeed, companies should do all they can to make sure everyone in the organization understands that suppression of information is unacceptable. Employees on the clinical side must understand that it is never their place to say "Uh oh—there are some adverse reactions happening here but if we tell the folks in regulatory, they'll have to report it to the FDA."
Codify and communicate your best practices for properly handling reports of adverse reactions and/or FDA warning letters. Make sure everyone in the organization—from sales and marketing reps to execs in the C-suite—understands that misplaced fears about transparency will get the company into more trouble, not less.
When it comes to due diligence, large, multi-national pharmaceutical companies have no choice but to make massive investments in people and technology. At smaller companies, however, short-term cost considerations sometimes translate into understaffed, poorly funded due diligence resources. While this is understandable, particularly in today's economy, it is also short-sighted. Pharmaceutical companies simply cannot act swiftly and decisively in the absence of strong due diligence capabilities. Indeed, an otherwise responsible company could run the risk of looking like a bad actor, simply because its two-person due diligence department was swamped and unable to respond quickly when bad news rolled in about an approved drug. Over the long term, inadequate investment in due diligence can translate into disproportionate PR, legal and regulatory costs. If you can, make this part of your company best in class.
While it might seem counterintuitive, often the backbone of a strong legal defense can be found right in the midst of the crisis itself—in your basic actions and attitudes on the regulatory side. Simply put, when companies hide evidence, run for cover, dodge and weave, they get killed in the courtroom. When pharmaceutical companies do everything they can to show a good-faith response, they boost their odds of living to fight another day.
Attorneys Brian S. Inamine (Los Angeles) and Michael F. Fuggio (Washinton D.C.) are shareholders in the national law firm LeClairRyan, where they routinely represent pharmaceutical companies in complex litigation. They can be contacted at: email@example.com or firstname.lastname@example.org.