New Drug Law in Canada

With a tip of the cap to our old friend, Peter Pliszka, north of border: Earlier this month, the so-called Protecting Canadians from Unsafe Drugs Act (Vanessa's Law) received royal assent and became law in Canada. This new legislation on paper was intended to protect Canadians from the potential risks related to drugs and medical devices by substantially increasing Health Canada's pre- and post-market powers over industry stakeholders, and changing the consequences for violating the Food and Drugs Act and its regulations.

Peter suggests that Vanessa's Law introduces the most significant amendments to the Food and Drugs Act in 50 years, and represents in some ways a new chapter in Canadian drug and medical device regulatory enforcement.

Peter notes that the new powers granted to Health Canada include:

• The power to order any person to provide information related to a drug or medical device where Health Canada believes that the product may present a serious risk of injury to human health;
• The power to order a manufacturer to conduct an assessment of a drug or medical device and to provide Health Canada with the results;
• The power to order a manufacturer to conduct additional tests or studies, or monitor experience, in relation to a drug or medical device for the purpose of obtaining additional information about the product's effects on health or safety, and to provide Health Canada with the results;
• The power to order a manufacturer to modify the label of a drug or medical device or to replace its packaging, where Health Canada believes that doing so is necessary to prevent injury to health; and
• The power to order any person who sells a drug or medical device to recall the product where Health Canada believes that a drug presents a serious risk of injury to health.

It appears that new regulations may be coming down the pike as well, on issues such as clinical trials information and product label issues outside of Canada.

FDA Considering Rules on Acrylamide in Food

The FDA is considering issuing guidelines on acrylamide content in food.  The agency has published a notice seeking comments from industry on the issue.

Acrylamide is a chemical formed primarily in baked and fried foods by a reaction between sugars and the amino acid asparagine. The reaction is partly responsible for the golden color and tasty flavor of baked, fried, and toasted foods. In 2002, some Swedish scientists reported unexpectedly high levels of acrylamide in carbohydrate-rich foods and also published a study associating the chemical to cancer in laboratory rats. Further research subsequently determined that acrylamide can form in some foods during certain types of high-temperature cooking.

FDA has not yet issued guidance for manufacturers on reducing acrylamide in food. However, it is anticipated by the agency that new information will soon be available about the toxicology of acrylamide, which may shed light on acrylamide's potential carcinogenicity in laboratory animals. Readers of MassTortDefense know how difficult it is to leap from animal studies to causation conclusions in human beings, because of the physiological and metabolism differences between species, the excessive dosages that are (and typically must be) given to experimental animals, and the varying biological defense mechanisms that species have to environmental insults.

International efforts to develop approaches to acrylamide mitigation are also beginning to prove successful. Moreover, FDA is aware that at least some manufacturers in the United States are seeking ways to reduce acrylamide in their products. In this context, FDA is considering issuing guidance for industry on reduction of acrylamide levels in food products.

Health Canada recently added acrylamide to that nation’s toxic substances list, as part of its ongoing review of over 200 chemical substances in commercial use. It stated that current consumption levels “may constitute a danger in Canada to human life or health,” but it also acknowledged that research into a possible carcinogenic link for humans has so far been inconclusive.

In fact, dietary intakes of acrylamide are not related to increased risks of brain cancer, according to a recently released study of 58,279 men and 62,573 women, published by Maastricht University in the Netherlands. J.G.F. Hogervorst, et al., “Dietary Acrylamide Intake and Brain Cancer Risk,” 18 Cancer Epidemiology, Biomarkers & Prevention (2009).  Researchers have also reported in the Journal of the National Cancer Institute that dietary acrylamide was not linked to lung cancer risk, and that the compounds may even reduce the risk in women. "Lung Cancer Risk in Relation to Dietary Acrylamide Intake," 101(9) JNCI 651-662 (2009).

 

 

In seeking comments, the FDA has asked food manufacturers to respond with details of any manufacturing changes they have made, the success and cost-effectiveness of those changes, methods for acrylamide reduction that could be appropriate for smaller manufacturers, and changes to on-pack instructions for consumers to mitigate acrylamide formation.

 

 

Canadian Court Rejects Pharmaceutical Class Action

We have posted before about just how difficult Canada is becoming as a jurisdiction for class actions defendants, particularly companies in the pharmaceutical industry. Frequently, identical consumer products, drugs, and medical devices are marketed in Canada as well as the U.S.  When a product is recalled, or new science suggests risks in a product leading to American product liability and mass tort litigation, Canadian plaintiff attorneys have not been bashful about bringing copycat litigation, borrowing from U.S.-conducted theories and discovery.

A ray of hope to the north?  The Quebec Superior Court last week declined to certify (authorize is the term they use) a class action for Canadians claiming to have experienced side effects from the use of GlaxoSmithKline Inc.’s antidepressant Paxil.  This is the first time a Quebec court has rejected a class action involving a prescription pharmaceutical product -- ever as far as we can tell. See Goyette v. GlaxoSmithKline Inc., Quebec Superior Court, No. 500-06-000157-020 (8/17/09).

Plaintiff sought to represent a national class of Paxil users. Three issues were prominent: Did the claims of the class members raise identical, similar or related questions of law or fact?  Did the facts alleged seem to justify the relief sought? And was the plaintiff an adequate class representative?  Importantly, at the time of the complaint, the class rules required plaintiff to submit a supporting affidavit (on which she was cross-examined).  Since that time, Quebec has sought to minimize the amount of factual material presented to the court in support of class certification (making opposition a bit more difficult).

The first issues sounds like the commonality aspect of U.S. class procedure. GSK argued that the highly subjective nature of the alleged symptoms in the present case, such as headaches, nausea, vertigo, the infinite variations on the symptoms, and the intensity and duration are so subjective that they cannot be decided collectively and so cannot satisfy the common question element.  Nevertheless, the court found that while the claim for exemplary damages was not common, there were common questions concerning the warnings GSK had given.

However, even in the absence of a true predominance requirement, some Canadian courts will look at whether and what issues will require individual determination. Here, the court agreed that the underlying question is whether allowing the suit to proceed as a representative one will avoid duplication of fact-finding or legal analysis. Thus an issue will be “common” only where its resolution is necessary to the resolution of each class member’s claim. The court found that if  "a class action were permitted here, there would be no saving in judicial time since there is no real common question and each case must be litigated on its on merits."  The court noted that each year there was a different set of information in the CPS (Canadian PDR), and accordingly, there would be different sub-classes depending on changes in the relevant wording in each of the years.

Similarly, in this case, civil liability must be determined by assessing the specific risks disclosed for each individual patient which risks vary depending on multiple factors:

 a) whether the adverse effects occur during the use of the product and lead to discontinuation;

 b) whether adverse effects follow discontinuation;

c) whether the user was advised prior to use, by either their physician or pharmacist, of whether they may experience dependency or withdrawal symptoms;

d) whether the symptoms suffered were described in the C.P.S. (PDR);

e) whether the symptoms were not described in the C.P.S. but are proved to be directly related to the use of Paxil; or

f) to the extent that the symptoms arose following discontinuation, whether such symptoms were "mild and transient" and were described in the C.P.S.

Next, the court determined that the facts alleged do not support the relief requested. All of the symptoms that Ms. Goyette alleges to have experienced were mentioned by GSK in the C.P.S. and that any fault must have been through the misreading of the C.P.S. by Ms. Goyette's prescribing physician.  And she made no specific allegations about the injuries of the absent class members.  Accepting as true the well-pleaded allegations, in essence, the facts that are taken as proven do not include impressions, opinion, legal argument, inferences or hypotheses that are not verified.

Finally, adequacy of representation is evaluated on three criteria:

 1- an interest in undertaking the legal proceedings;

 2- an ability to instruct counsel; and

 3- absence of a conflict with the other group members.
 

Based on the previous analysis, the court found that Ms. Goyette could not represent a class since she herself does not have a valid cause of action.  Moreover, plaintiff had shown a singular lack of interest in that she never sought to speak with any of the other members of the proposed class, none of whom she knows; she has never sought to communicate with any of the individuals alleged to have signed up at her attorneys' website; and she could provide no explanation as to why these legal proceedings which started on May 2, 2002 remained dormant for several years.

An analysis with a little bit of teeth.
 

Canadian Court Certifies Another Class Action

The Ontario Court of Justice earlier this month certified a class action against Dell Canada Inc. for alleged damage caused to about 120,000 individuals, corporations, and government agencies by allegedly defective notebook computers. See Griffin v. Dell Canada Inc., Ontario Superior Court of Justice, No. 07-CV-325223D2 (2/3/09). Here at MassTortDefense, we have posted about just how difficult Canada is becoming as a jurisdiction for class actions defendants. Frequently, identical consumer products, drugs, and medical devices are marketed in Canada as well as the U.S.

The court concluded that a class action was the preferred option to address the issues, that it was “fanciful” to think that any claimant could pursue an individual claim in a complex products liability case, and rejected Dell's arguments that an arbitration clause in its terms and conditions of sale precluded direct litigation by its customers.


The court minimized the importance under the Class Proceedings Act of plaintiffs’ obligation to produce a workable litigation plan. Such a plan is necessary to help the court decide whether a class action is the preferable procedure, and whether the litigation is manageable. The more complex the litigation, the more detailed a plan is needed that indicates how to manage the litigation. The court ruled, however, that the plaintiff is not required to show that there is a fair, efficient, and manageable method of resolving the claim, but only that there is a fair, efficient, and manageable method for advancing the claim. Order at para. 95. Who cares about theoretical advancement if the claim cannot efficiently be resolved?  A class proceeding in this case achieved this lesser goal and met the objective of judicial economy, even though plaintiff’s plan provided no detail of the resources the class law firm has to administer a claims process of this dimension to ensure that the interests of class members are protected, and there was no analysis of the resources that will be required to litigate the class members' claims to conclusion. Nevertheless, the court went ahead and certified the action conditionally, subject to the plaintiffs producing an acceptable litigation plan. Order at para. 102.

The court rejected Dell Canada’s argument that the significant individual issues involved in each of the potential claims far outweigh the common issues, as merely a “familiar refrain.” Order at para. 90.  Perhaps it is familiar because it is frequently true? The court concluded that the trial judge will be able to fashion efficient and fair trial plan procedures using the extensive powers and discretion conferred on the court by Sec. 25 of Ontario's Class Proceedings Act. The prospect of individualized mini-trials on whether, and to what extent, other factors contributed to the computer failures did not deter the certification. Nor did potentially difficult issues of causation and damages. Order at para. 90.

Dell did not propose that consumers undertake individual lawsuits, but argued that adjudication through arbitration administered by the National Arbitration Forum, as specified in Dell's terms and conditions of sale, was preferable to a class action. The court found, however, that arbitration was not the kind of process that would be easy for class members to navigate without legal representation. The multitude of individual issues that Dell says precludes class treatment would also lead to more complex and therefore more costly arbitration hearings, said the court. Order at para. 92-93.

“On the other hand, aggregating similar individual actions in a class proceeding avoids unnecessary duplication of fact-finding and analysis, and distributes fixed litigation costs among class members, making it economical to prosecute this claim, thereby improving access to justice.” Order at para. 93.
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Two Recent Canadian Pharmaceutical Class Action Decisions

Two recent decisions illustrate just how difficult Canada is becoming as a jurisdiction for class actions defendants, particularly companies in the pharmaceutical industry. Frequently, identical consumer products, drugs, and medical devices are marketed in Canada as well as the U.S.  When a product is recalled, or new science suggests risks in a product leading to American product liability and mass tort litigation, Canadian plaintiff attorneys have not been bashful about bringing copycat litigation, borrowing from U.S.-conducted theories and discovery.  However, Canada appears not to be mimicking the trend against personal injury class actions in the U.S.

Background

Quebec was the first Canadian province to enact class action procedures in 1978, and a 2003 amendment to the Quebec Code of Civil Procedure simplified the class “authorization” process. In practice, the amendment may have made it easier for plaintiffs to obtain certification. The requirements are that the claims of the members raise identical, similar or related questions of law or fact (true commonality not required); the facts alleged seem to justify the conclusions sought; the composition of the group makes joinder difficult or impracticable; and the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately. Not a daunting challenge in some fact patterns.  Notice the absence of predominance, superiority, and manageability as explicit factors.

In Ontario, class action procedures were developed much more recently, dating back only to 1992. They permit certification when there is an identifiable class of two or more persons that would be represented by the representative plaintiff or defendant; the claims or defenses of the class members raise common issues; a class proceeding would be the preferable procedure for the resolution of the common issues; and there is a representative plaintiff who would fairly and adequately represent the interests of the class, has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and does not have an interest in conflict with the interests of other class members.

Wyeth

First, in the latest ruling in the HRT litigation against Wyeth, the Supreme Court of British Columbia refused to dismiss a putative class action in which plaintiffs in Canada allege that Premarin and Premplus therapy treatments caused breast cancer. Stanway v. Wyeth Canada Inc., 2008 BCSC 847 (June 27, 2008). The company denies the claims alleged in the litigation, insisting the products have carried an adequate label warning of a heightened risk of breast cancer, based on state of the art. Indeed, HRT drugs are still approved by the FDA as safe and effective and remain on the market.

The Canadian plaintiffs asserted two causes of action against the defendants. The first is for negligence, and the second is a statutory cause of action for deceptive acts and practices under the province's Business Practices and Consumer Protection Act. Wyeth’s motion asserted that the court lacked “territorial competence” over the U.S. entities of the company pursuant to the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28 (the “CJPTA”).

The U.S. Wyeth entities offered the position that there is no real and substantial connection between British Columbia and the facts upon which the proceeding against the U.S. defendants is based. Wyeth presented affidavits showing that the executives and staff of the U.S. defendants have not managed and do not manage North America as a single market. They have not interfered and do not interfere with the Canadian market. The U.S. defendants do not play a controlling or decision-making role in the pharmaceutical operations of the Canadian defendants. Individuals within Wyeth Canada reported directly or indirectly to the president of Wyeth Canada, not to anyone at Wyeth Pharmaceuticals. Employees of Wyeth Canada may have liaised with counterparts at Wyeth Pharmaceuticals but did not answer to them. Wyeth Canada owns the Canadian patents and trademarks for Premarin, holds various approvals for Premarin from Health Canada.

Moreover, Wyeth Canada runs its own marketing campaign and designs its own packaging, independently from U.S. Wyeth. The U.S. defendants do not conduct any sales or promotional activity related to Premarin or Premplus in Canada. Wyeth Canada runs its own marketing campaigns and designs its own packaging. Wyeth Canada generates its own promotional literature and a copy review committee of Wyeth Canada signs off. Warnings and other information are the responsibility of Wyeth Canada. It has its own independent training group and there is no functional reporting relationship between Wyeth Canada and Wyeth. Wyeth Canada’s marketing employees meet with their worldwide counterparts to exchange ideas and practices. Wyeth Canada tracks sales and decides whether or not to market a particular product.

The only Premarin tablets sold in Canada during the period the plaintiff says that she was prescribed the product would have been manufactured in Canada. At no time have any packages of Premarin or Premplus sold in Canada identified any association with U.S. Wyeth.

The plaintiff’s allegation was that Premarin and Premplus were introduced into and maintained within the Canadian stream of commerce. She alleged that the defendants are jointly involved with or responsible for the negligent manufacturing, testing, marketing, labeling, distribution, promotion and sale of Premarin and Premplus to consumers in British Columbia, and that they failed to warn her about the dangers of taking these drugs.

The Court noted that the plaintiff must prove circumstances that constitute a real and substantial connection between British Columbia and the facts on which a proceeding is based. The statute gives a non-exhaustive list of relevant factors, including whether the tort was committed in British Columbia, and whether the claim concerns a business carried on in British Columbia.


Despite the powerful showing by Wyeth, the Court concluded that the plaintiff successfully established a link between British Columbia and the tort allegedly committed by the U.S. defendants under the CJPTA. The Court concluded that there is no dispute that the plaintiff alleges that she suffered damage in British Columbia. It is in the interest of the forum to protect the legal rights of its residents, and to allow injured plaintiffs "generous access" to litigation. The defendants engaged in “harmonization” and “coordination” of matters involving core monograph and labeling requirements, the efficacy of the products, and the collecting and sharing of other clinical research or trial information, said the Court.  Wyeth Pharmaceuticals’ role as a central repository and coordinator for adverse event reporting for all the Wyeth affiliates worldwide demonstrated, the Court concluded, a sufficient involvement of the U.S. defendants in promoting the efficacy of the drug and its safety.

Lilly
In the second recent decision, involving Eli Lilly and its Zyprexa schizophrenia drug, an Ontario appeal court affirmed the lower court's decision that class action plaintiffs may proceed with an attempt to recover damages tied to company sales rather than individual damages. Andrea Heward vs. Eli Lilly & Co., No. 181/07, Ontario Superior Court of Justice, Divisional Court (Toronto) (July 2, 2008).


Plaintiffs accused Lilly of failing to warn that Zyprexa may allegedly cause diabetes and other disorders. Zyprexa is approved by the FDA and Canadian regulators to treat schizophrenia and bipolar disorder. The proposed national class (excluding British Columbia and Quebec) has an estimated 575,000 members. In addition to claims sounding in negligence, plaintiffs allege a so-called “waiver of tort” theory that resembles an unjust enrichment theory seeking disgorgement of profits and/or a constructive trust of the proceeds of the defendants’ sale of the drug. The interlocutory appeal was confined to the issues whether the motion court had erred in concluding that the damages (accounting, disgorgement, constructive trust) was a common issue, and whether the class proceeding is the preferable procedure to resolve the claim of waiver of tort.


Defendants asserted that the amount of damages would implicate individual issues because all class members would not have taken Zyprexa even if they had been warned as plaintiffs asserted they should have been, and plaintiffs could not show that Health Canada would not have approved Zyprexa for sale if the warnings had been different. Indeed, Zyprexa continued to be used for years after the label was amended to change the language about diabetes risks.

 
The Superior Court noted that “waiver of tort” is confusing nomenclature. It does not refer to waiving a right to sue, but an election to base a claim in restitution. The Court acknowledged the debate over whether the waiver of tort theory constitutes an independent cause of action or a remedy in Ontario. It is an “uncertain area of law” raising “policy concerns” which “require clarification in our jurisprudence.”


However, the Court concluded that the embryonic nature of the waiver of tort doctrine simply meant that no decisions should be made absent a full evidentiary record. The class action procedures provide options for the common issues phase to create subclasses, and craft the boundaries of the remedy of disgorgement to fit the requisite causal link, and even decertify common issues when necessary. The Court concluded that individual issues that factor into the determination of the quantum of the restitutionary disgorgement or constructive trust would not undermine the applicability of waiver of tort on a class-wide basis. This seems to confuse two issues: individual issues on quantum of damage might not alone defeat certification, but that does not make them common questions, which was the issue on appeal.

 
Regarding the second issue, the Court concluded that even if the amount of relief based in waiver of tort cannot be assessed in aggregate, a class action remains the preferable procedure for this claim. In potentially troubling language for defendants, the Court noted that “the only necessary evidence with respect to waiver of tort may well be simply the wrongful conduct of the defendants.” While conditional, such an interpretation of this type of claim may affect future certification decisions and stands to make future defendants liable for truly enormous amounts of damages unless clarified.