1st Cir. Rules for Biotech Corp That Rationed Life-Saving Drugs
The First Circuit tossed out most of a lawsuit against the biotech company Genzyme last week. Genzyme is the sole producer of Fabrazyme, the only treatment for Fabry disease, a rare, deadly genetic disorder. Facing a shortage of the drug due to production complications, Genzyme instituted a rationing plan, giving patents a reduced dosage of the medicine they needed to survive -- until the supply dried up entirely.
Patients who needed Fabrazyme to avoid vision and hearing loss, stroke, and even death sued Genzyme, alleging everything from statutory violations to breaches of contract to loss of consortium. But, the First Circuit ruled this week, all but one of those patients lacked standing to sue.
The Ever-Lengthening Fabrazyme Shortage
Fabry disease is a rare genetic disorder that impedes the body's ability to break down fats. When untreated, the disease leads to a host of symptoms, ranging from pain the extremities to premature death. The only approved treatment for Fabry disease is Fabrazyme, an enzyme replacement therapy created by Mt. Sinai Hospital and licensed exclusively to Genzyme.
But Fabrazyme can be hard to come by. In 2009, Genzyme discovered that steel, glass, and rubber particles had made it into some of the medicine. Shortly afterwards, another batch was contaminated by a virus. As production was halted, Genzyme began diverting some drugs into the European market. The result: a large shortage in available Fabrazyme.
In response, Genzyme began rationing the drug, reducing the amounts given to patients. By 2011, there was no Fabrazyme left over for American patients at all. It was only in 2012 that Genzyme restored full supplies of the drug.
The Law Suits Flow In
A multitude of lawsuits proliferated as a result of the shortage, including two putative class actions that made their way up to the First Circuit. Those complaints relied on a variety of theories: violations of state and federal law, tort, breach of warranty and contract, and loss of consortium.
The two suits were, in the words of the First Circuit "a matched set of rambling complaints" which were eventually "titrated" in to three possible injuries, connected to three potential causal chains. The first: Genzyme's actions caused progression of the disease that would not otherwise occur. The second: the reduced dosage accelerated symptoms, causing affirmative harm. And finally: patients had been harmed by tainted Fabrazyme distributed pre-shortage.
Standing, Claim-by-Claim and Plaintiff-by-Plaintiff
The district court rejected each claim on the grounds that they did not provide sufficient notice of which plaintiffs, if any, had suffered harms.
On appeal, the First Circuit similarly rejected the claims, but on different grounds. What was at issue was not the pleading and notice, but standing, the First found. Under the Iqbal / Twombly plausibility standard, the court found that the complaints lacked a plausibly pleaded injury in fact. In both the acceleration and contamination claims, plaintiffs had failed to demonstrate the "abecedarian" requirement of a particularized injury.
(Side note: that's "abecedarian," or "ABCD-arian," meaning basic. And though the phrase sounds like a neologism, it's actually a relatively obscure use of a phrase descendent from Medieval Latin.)
"Tellingly," the court writes, "no specific information is provided regarding the harm, if any, that has befallen each individual plaintiff," leaving only "scattered descriptions of generalized harms." The court rejected generalized claims, demanding a "plaintiff-by-plaintiff and claim-by-claim" standing analysis. Plaintiffs, the court found, couldn't withstand that scrutiny.
It wasn't entirely a win for Genzyme, however. A single named plaintiff made claims specific enough to survive the standing inquiry, the court found, remanding those claims back to the district court for further review.
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