Although an apple a day idiomatically keeps the doctor away, it appears true to one federal judge that one bad apple (or in this case three) really does spoil the bunch.
As we previously reported here, in 2011, Lorillard, Inc., Lorillard Tobacco Company, and R.J. Reynolds Tobacco Company sued the FDA, DHHS, Kathleen Sebelius, Margaret Hamburg, and Lawrence Deyton seeking declaratory and injunctive relief to bring the membership of the Tobacco Products Scientific Advisory Committee (“TPSAC”) and the membership of the Constituents Subcommittee of the TPSAC into compliance with applicable laws, and to prevent the defendants from taking any action based on any report or advice provided by the TPSAC or the Constituents Subcommittee. Among the reports issued by TPSAC, perhaps none has the potential for spurring more effect and controversy than the 2011 “Menthol Report,” which concluded in part that “removal of menthol cigarettes from the marketplace would benefit public health in the United States.”
Monday, in a scathing rebuke to FDA, the United States District Court for the District of Columbia issued its summary judgment ruling, stating that FDA violated the Administrative Procedure Act and the Federal Advisory Committee Act when it appointed three members because they were consultants to pharmaceutical companies developing nicotine replacement therapies and were involved in tobacco-related litigation.
Congress enacted a specific conflict of interest provision applicable to members of the TPSAC. 21 U.S.C. § 387q(b)(1)(C). The court initially noted that even the plaintiffs did not allege that the three members violated that conflict provision “because this provision only contemplates conflicts arising from one perspective: it bars voting members from receiving any remuneration from tobacco industry businesses.”
Nevertheless, the court felt compelled to examine whether other laws applicable to special government employees ("SGEs") precluded these three members from serving on the TPSAC due to financial conflicts of interest. Under the circumstances presented in this case, the court agreed with plaintiffs that the three members’ participation in certain TPSAC activities had a “direct and predictable effect” on their financial interests. FDA claimed that it had conducted extensive screenings of each TPSAC member and had determined that there was no conflict of interest presented by members’ consulting work. Discussing FDA’s assertion that these members had no competing financial interest due to their consulting work, Judge Richard J. Leon’s reaction was simple: “Please!” He ruled that such a “conclusion defies common sense” and that FDA exhibited a “clear error in judgment.” With respect to the three members’ participation in tobacco litigation, the Court concluded that when individuals have “repeatedly” testified in litigation against tobacco industry and had commitments to do so in the future, FDA acted arbitrarily and capriciously when it nonetheless appointed such individuals to the TPSAC. The court noted that “numerous commentators and media outlets” had publicly questioned the impartiality of these appointments. Expanding upon the conflicts provisions of the Family Smoking Prevention and Tobacco Control Act (“Tobacco Control Act”), which expressly disqualifies any member who received “any salary, grants, or other payment or support” from any tobacco company in the 18 months before serving on the TPSAC, Judge Leon wrote that “it stands to reason that past remuneration from direct competitors of those companies, such as manufacturers of smoking-cessation drugs, would also constitute a conflict of interest.”
As a result, the Court concluded that appointment of those members to the TPSAC “fatally” and “irrevocably tainted its composition and its work product.” The court found that the TPSAC findings and recommendations, including the Menthol Report, “are, at a minimum, suspect, and, at worst, untrustworthy.” Accordingly, the Court instructed FDA to appoint an entirely new TPSAC constituted of interest-free members and barred FDA from using the TPSAC’s Menthol Report.
FDA is not obligated to follow the recommendations of its advisory committees, including TPSAC. Indeed, in April 2014 FDA announced that it is conducting its own review of all the information regarding menthol, including the Menthol Report.
Nevertheless, potentially the biggest winner here, at least in the short term, may be Reynolds, which earlier this month offered to purchase its fellow-plaintiff, Lorillard, for $25 billion in cash, a move that, if approved by anti-trust regulators, will dramatically increase Reynolds’ portfolio of menthol-containing tobacco products.
FDA and the other defendants have 60 days to file a notice of appeal. Given the significance and breadth of the ruling, we expect that a notice of appeal will be filed.