State ex rel. Shikada v. Bristol-Myers Squibb Co.

Ginger Pigott & Richard Tabura*

Why It Made the List

In Shikada,^[1] the State of Hawaii sued two drug companies, alleging they violated state consumer protection law by misleading the public about the efficacy of the blood thinner Plavix. Specifically, the State claimed the companies failed, for many years, to disclose that people with certain genetic makeup can be “poor responders” to Plavix before finally adding it to the label in 2009.

Shikada made the list because although the Hawaii Supreme Court did not fully affirm the trial court’s finding in favor of the State of Hawaii with an associated significant monetary penalty, it did recognize broad tort-like liability for drug manufacturers for failure to warn of risks specific to racial and ethnic groups, second-guessing the judgment of the FDA as to appropriate label content. The case, although factually specific, may set risky precedent, threatening manufacturers of products that comply with FDA requirements but are less effective for certain racial groups.

Background

In 2014, the State of Hawaii filed suit alleging that BMS and Sanofi (“manufacturers”) violated Hawaii’s Unfair or Deceptive Acts or Practices law (UDAP) by misleading the public about the safety and efficacy of the widely used blood thinner, Plavix (clopidogrel). The complaint alleged that Plavix was less effective in patients who had certain liver-enzyme mutations (poor responders), including Asian Americans. It also claimed that the manufacturers violated UDAP in two ways: by failing to update the drug’s warnings to inform the public of Plavix’s poor responder issue and by intentionally keeping the poor responder issue under wraps and suppressing research.

Before trial, the State moved for partial summary judgment on its deceptive acts or practices UDAP theory. To prove a deceptive acts claim, the State had to show: 1) a representation, omission, or practice that 2) was likely to mislead consumers acting reasonably when 3) the representation, omission, or practice was material.^[2] The State’s motion for summary judgment focused on the third element—materiality. It argued that trial was unnecessary regarding materiality of information about Plavix’s lower efficacy for poor responders because there was “no doubt that the information contained on Plavix’s federally mandated black box warning is material as a matter of law.” The trial court, calling itself the “Ultimate Trier of Fact,” agreed, and concluded it “need not resolve inferences in favor of the non-moving party,” granting the State’s partial summary judgment. As a result, the manufacturers were precluded from presenting trial evidence about the materiality of Plavix’s black box warning, including evidence that prescribers and patients did not stop using Plavix when the poor responder issue was later added to the black box warning—a critical defense made in any prescription drug case.

A month-long bench trial focused on three issues: 1) whether the manufacturers omitted the poor responder issue from the Plavix label between 1998 and 2009, or whether the manufacturers were doing the best they could with conflicting research on Plavix and variability in users’ responsiveness; 2) whether the manufacturers suppressed research into variability of users’ response; and 3) whether the omissions of the poor responder information from Plavix’s label hurt Hawaii consumers.

The trial court agreed with the State of Hawaii on all three issues, finding the manufacturers violated UDAP by engaging in deceptive and unfair acts and practices, imposing an $834 million penalty on the manufacturers.

On appeal, the Supreme Court for the State of Hawaii held the following: “procedural bars,” including UDAP’s safe harbor provision, statute of limitations, and preemption, did not prevent the State’s claims; the trial court erred in granting summary judgment to the State on materiality because the court disregarded evidence that raised a genuine factual dispute, which in turn led to vacating the trial court’s deceptive acts or practices finding; affirmed the trial court’s unfair acts or practices finding; and vacated the trial court’s penalty determination.

Discussion

“Procedural” Challenges

The manufacturers made three failed arguments on appeal related to legal issues the court characterized as “procedural.”

First, the manufacturers argued that because Plavix’s label was FDA-approved, it was exempted as “conduct in compliance with” a federal agency under the UDAP’s “safe harbor” provision.^[3] The Hawaii Supreme Court disagreed, focusing on the manufacturers’ conduct and approach to publicizing and investigating the poor responder issue, which was not covered by FDA’s approval of Plavix’s label.^[4] According to the court, FDA’s approval did not provide a “safe harbor” for suppressing research on the poor responder issue.

Second, the manufacturers argued the State’s action was time-barred. But under Hawaii law, the State is not subject to any limitations period unless it is “specifically designated in such statute as subject to the limitation period contained therein.”^[5] Under the applicable statute of limitations, however, there was no specific designation that the State was subject to the limitations period. Thus, the Supreme Court rejected the statute of limitations argument.

Third, the manufacturers argued the State’s UDAP claims were preempted by the Federal Food, Drug, and Cosmetic Act (FDCA) because it would be impossible for them to comply with both federal drug labeling requirements and the duties imposed by the State’s UDAP claims. Under federal law, labeling for the drug must match FDA-approved labeling. Under FDA’s “changes being effected” (CBE) regulation, however, manufacturers can change a label to “add or strengthen a contraindication, warning, precaution, or adverse reaction” or to “add or strengthen an instruction about dosage or administration that is intended to increase the safe use of the drug.”^[6] Because of the CBE regulation, the Shikada court held that the manufacturers could only establish “impossibility preemption” if they could show “with clear evidence that the FDA would not have approved a change to [Plavix]” required by state law.^[7] The court held that the manufacturers had not provided “clear evidence” that FDA would have rejected an earlier label-update proposal, so there was no preemption.

Summary Judgment Challenge

The manufacturers then challenged the trial court’s granting of the partial motion for summary judgment on materiality, and the Hawaii Supreme Court agreed.

In opposing the motion for summary judgment, the manufacturers showed that Hawaii doctors had not changed their prescribing decisions once the poor responder issue was later added to Plavix’s black box warning in 2010, which suggests that any omission was not “material.” The trial court disagreed, finding that when information relates to safety and health, there is a presumption that it is material. The Hawaii Supreme Court rejected the trial court’s logic, emphasizing that “the testimony of prescribing doctors [] cannot be completely written off” and the trial court “erred by shutting out this category of evidence entirely.”^[8] The Hawaii Supreme Court determined that the manufacturers’ showing was enough to create a triable issue of material fact at the summary judgement stage, even if the trial court were “confident” it would have reached the same conclusion at trial.^[9]

Deceptive Acts or Practices Challenge

The Hawaii Supreme Court vacated the trial court’s deceptive acts or practices holding because the grant of summary judgment on materiality “reverberated” throughout trial on this issue.

Proving that the omission of the poor responder issue from Plavix’s labeling was material information likely to mislead consumers was critical to the State’s deceptive acts or practices challenge. If the State could show that adding the poor responder issue to Plavix’s labeling would have made no difference in whether people in Hawaii took the drug, then that would not be material information. But because of the summary judgment ruling, the manufacturers were barred from presenting any evidence that Hawaii doctors continued to prescribe Plavix even once the poor responder issue was added to its label in 2010. Thus, the Hawaii Supreme Court vacated the deceptive acts or practices holding, because the manufacturers “did not have the chance to make their case fully at trial.”^[10]

Unfair Acts or Practices Challenge

The Hawaii Supreme Court, however, affirmed the trial court’s holding that the manufacturers engaged in unfair acts or practices in violation of the UDAP. A practice is unfair if it 1) offends public policy; 2) is immoral, unethical, oppressive, or unscrupulous; or 3) substantially injures Hawaii consumers.^[11] Focusing on the conduct of the manufacturers (and not what Plavix’s labeling said), the Hawaii Supreme Court concluded that the State of Hawaii had proven that the manufacturers’ conduct both offended public policy and was immoral.

First, the court discussed the trial court’s public policy findings. The State of Hawaii, according to the trial court, proved that the manufacturers “suppress[ed] research and continuously and repeatedly failed to further investigate” the poor responder issue.^[12] The trial court found that the manufacturers knew that Plavix was less effective for non-White populations but failed to disclose that information to FDA and avoided funding studies that might draw more attention to the poor responder issue. The Supreme Court pronounced that “preventing risks from becoming apparent for financial gain offends Hawaii public policy.”^[13]

Second, the Hawaii Supreme Court left undisturbed the trial court’s finding that the manufacturers’ conduct was immoral for reasons much like its public policy findings. The court determined that there was no clear error in the trial court’s finding that the manufacturers “buried their heads in the sand about the problems with Plavix.”

Ultimately, the Supreme Court concluded that the manufacturers’ conduct was unrelated to the materiality of Plavix’s label, so the trial court’s error granting summary judgment did not impact its unfair acts or practices finding.

Penalties

The Shikada court determined that the trial court’s summary judgment ruling on materiality impacted its $834 million penalty determination, which “heav[ily] relied” on its materiality determination.^[14] Thus, the court vacated the penalty to be determined after the deceptive acts claim was re-tried.

Impact

This case will undoubtedly inspire additional efforts to use broad consumer protection statutes to attack products that have been approved (or cleared) by FDA, are safe, provide benefit to most of the public, but may be less effective for certain ethnic groups. State Attorneys General and consumer advocacy groups are likely to make similar claims as the State of Hawaii against drugs like Plavix. For example, a similar lawsuit has been filed in California against the manufacturers of pulse oximeters. Although many pulse oximeters are cleared by FDA, a consumer advocacy group claims the manufacturers violated California consumer protection statutes because competing research suggests pulse oximeters may be less accurate for people with darker pigmented skin. Thus, a product that is authorized by FDA, manufactured properly, with a state-of-the-art design, and adequate warnings still may face liability under consumer protection statutes if it turns out that the product is less effective for a particular racial group and the manufacturer either fails to disclose such information and in particular if it actively avoids or suppresses research suggesting such a difference.

*  Ginger Pigott is a shareholder at Greenberg Traurig LLP in Los Angeles. For more than three decades, she has counseled clients and engaged in product liability defense work, including complex medical device and pharmaceutical products. Richard Tabura is an associate at Greenberg Traurig LLP in Los Angeles. He focuses his practice on class action and product liability defense with an emphasis on complex medical devices, pharmaceutical products, and consumer products.

[1]   State ex rel. Shikada v. Bristol-Myers Squibb Co., 526 P.3d 395 (Haw. 2023).

[2]   Id. at 526.

[3]   State ex rel. Shikada v. Bristol-Myers Squibb Co., 526 P.3d 395, 413 (2023).

[4]   Id. at 414.

[5]   Haw. Rev. Stat. § 657-1.5.

[6]   Wyeth v. Levine, 555 U.S. 555, 568 (2009) (quoting 21 C.F.R. §§ 314.70(c)(6)(iii)(A), (C)).

[7]   Shikada, 526 P.3d at 416.

[8]   Id. at 419.

[9]   Id. at 419.

[10]  Id. at 420.

[11]  Id.

[12]  Id. at 424.

[13]  Id.

[14]  Id.