The Legal Battle Over Adverse Event Disclosure // Pharmalot + Poll

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http://www.pharmalot.com/2011/01/the-legal-battle-over-adverse-event-disclosure/

• â Pharma Blogâ  Â» â 2011â  Â» â Januaryâ  Â» â 11â 

â The Legal Battle Over Adverse Event Disclosureâ 

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By Ed Silverman // â  January 11th, 2011â  // 10:10 am

Should drugmakers disclose all adverse event reports that may not show

statistically significant evidence that a side effect is actually caused by a

specific drug? The issue is now before the US Supreme Court involving a case

brought by investors against Matrixx Initiatives, which was sued for allegedly

concealing side effect reports that its Zicam over-the-counter cold med caused

people to lose their sense of smell, known as anosmia (â back storyâ ).

And in oral arguments yesterday, the case made by the lawyer for Matrixx may not

have passed the smell test after he insisted Matrixx did not commit fraud when

it failed to disclose cases in which Zicam patients reportedly lost their sense

of smell. Since drugmakers receive real or hearsay adverse event reports almost

every day, Jon Hacker maintained shareholders must show a statistically

significant number of adverse reports before proceeding with a securities fraud

class action.

But a few Supreme Court Justices eagerly challenged his notion. “I’m an

investor in Matrixx,†Chief Justice Jr. posited, according to

â The National Law Journalâ . “I worry whether my stock price is going to go

down. You can have some psychic come out and say ‘Zicam is going to cause a

disease’ with no support whatsoever, but if it causes the stock to go down

20%, it seems to me that’s material.â€

And Justice Ruth Bader Ginsburg noted that as adverse event reports surfaced

publicly about Zicam and loss of smell, Matrixx issued a statement falsely

asserting the concerns were “completely unfounded.†She suggested this was

sufficient reason to proceed with a fraud claim, the paper notes.

But Hacker argued that requiring a company to disclose even unfounded claims

would cause self-inflicted damage that would also upset shareholders. “A false

report about us is about to come out. It requires the company to first ring the

bell and then un-ring it in the same statement, and that’s not a good rule for

companies,†he argued, according to the paper. “Shareholders wouldn’t want

that rule, to require companies to denigrate their product and then do their

best to explain why the allegation is untrue.â€

There is a great deal of jockeying taking place. Matrixx shareholders are

concerned Matrixx will succeed in obscuring the notion of reporting adverse

events and, effectively, obtain a decision that could require drugmakers to

report a tidal wave of adverse events, many of which may be irrelevant to a

lawsuit. Meanwhile, PhRMA and BIO last summer jointly filed a

friend-of-the-court own brief in which they argued that a “reasonable investor

would not base investment decisions on statistically insignificant reports of

adverse events, which are unlikely to threaten a drug’s sales†(â see

thisâ ).

But is statistically insignificant really insignificant? Justice Elena Kagan

offered the example of a contact lens solution that was used by millions and

linked to 10 cases of blindness. “Would you stop using that product, and would

a reasonable investor want to know about those ten cases?†she offered.

“I’d stop using the product, and if I were holding stock in that company, I

would sell the stock.†What do you think?

Sent via BlackBerry by AT & T

[Guest guest]

http://www.pharmalot.com/2011/01/the-legal-battle-over-adverse-event-disclosure/

• â Pharma Blogâ  Â» â 2011â  Â» â Januaryâ  Â» â 11â 

â The Legal Battle Over Adverse Event Disclosureâ 

Make a comment

By Ed Silverman // â  January 11th, 2011â  // 10:10 am

Should drugmakers disclose all adverse event reports that may not show

statistically significant evidence that a side effect is actually caused by a

specific drug? The issue is now before the US Supreme Court involving a case

brought by investors against Matrixx Initiatives, which was sued for allegedly

concealing side effect reports that its Zicam over-the-counter cold med caused

people to lose their sense of smell, known as anosmia (â back storyâ ).

And in oral arguments yesterday, the case made by the lawyer for Matrixx may not

have passed the smell test after he insisted Matrixx did not commit fraud when

it failed to disclose cases in which Zicam patients reportedly lost their sense

of smell. Since drugmakers receive real or hearsay adverse event reports almost

every day, Jon Hacker maintained shareholders must show a statistically

significant number of adverse reports before proceeding with a securities fraud

class action.

But a few Supreme Court Justices eagerly challenged his notion. “I’m an

investor in Matrixx,†Chief Justice Jr. posited, according to

â The National Law Journalâ . “I worry whether my stock price is going to go

down. You can have some psychic come out and say ‘Zicam is going to cause a

disease’ with no support whatsoever, but if it causes the stock to go down

20%, it seems to me that’s material.â€

And Justice Ruth Bader Ginsburg noted that as adverse event reports surfaced

publicly about Zicam and loss of smell, Matrixx issued a statement falsely

asserting the concerns were “completely unfounded.†She suggested this was

sufficient reason to proceed with a fraud claim, the paper notes.

But Hacker argued that requiring a company to disclose even unfounded claims

would cause self-inflicted damage that would also upset shareholders. “A false

report about us is about to come out. It requires the company to first ring the

bell and then un-ring it in the same statement, and that’s not a good rule for

companies,†he argued, according to the paper. “Shareholders wouldn’t want

that rule, to require companies to denigrate their product and then do their

best to explain why the allegation is untrue.â€

There is a great deal of jockeying taking place. Matrixx shareholders are

concerned Matrixx will succeed in obscuring the notion of reporting adverse

events and, effectively, obtain a decision that could require drugmakers to

report a tidal wave of adverse events, many of which may be irrelevant to a

lawsuit. Meanwhile, PhRMA and BIO last summer jointly filed a

friend-of-the-court own brief in which they argued that a “reasonable investor

would not base investment decisions on statistically insignificant reports of

adverse events, which are unlikely to threaten a drug’s sales†(â see

thisâ ).

But is statistically insignificant really insignificant? Justice Elena Kagan

offered the example of a contact lens solution that was used by millions and

linked to 10 cases of blindness. “Would you stop using that product, and would

a reasonable investor want to know about those ten cases?†she offered.

“I’d stop using the product, and if I were holding stock in that company, I

would sell the stock.†What do you think?

Sent via BlackBerry by AT & T

[Guest guest]

http://www.pharmalot.com/2011/01/the-legal-battle-over-adverse-event-disclosure/

• â Pharma Blogâ  Â» â 2011â  Â» â Januaryâ  Â» â 11â 

â The Legal Battle Over Adverse Event Disclosureâ 

Make a comment

By Ed Silverman // â  January 11th, 2011â  // 10:10 am

Should drugmakers disclose all adverse event reports that may not show

statistically significant evidence that a side effect is actually caused by a

specific drug? The issue is now before the US Supreme Court involving a case

brought by investors against Matrixx Initiatives, which was sued for allegedly

concealing side effect reports that its Zicam over-the-counter cold med caused

people to lose their sense of smell, known as anosmia (â back storyâ ).

And in oral arguments yesterday, the case made by the lawyer for Matrixx may not

have passed the smell test after he insisted Matrixx did not commit fraud when

it failed to disclose cases in which Zicam patients reportedly lost their sense

of smell. Since drugmakers receive real or hearsay adverse event reports almost

every day, Jon Hacker maintained shareholders must show a statistically

significant number of adverse reports before proceeding with a securities fraud

class action.

But a few Supreme Court Justices eagerly challenged his notion. “I’m an

investor in Matrixx,†Chief Justice Jr. posited, according to

â The National Law Journalâ . “I worry whether my stock price is going to go

down. You can have some psychic come out and say ‘Zicam is going to cause a

disease’ with no support whatsoever, but if it causes the stock to go down

20%, it seems to me that’s material.â€

And Justice Ruth Bader Ginsburg noted that as adverse event reports surfaced

publicly about Zicam and loss of smell, Matrixx issued a statement falsely

asserting the concerns were “completely unfounded.†She suggested this was

sufficient reason to proceed with a fraud claim, the paper notes.

But Hacker argued that requiring a company to disclose even unfounded claims

would cause self-inflicted damage that would also upset shareholders. “A false

report about us is about to come out. It requires the company to first ring the

bell and then un-ring it in the same statement, and that’s not a good rule for

companies,†he argued, according to the paper. “Shareholders wouldn’t want

that rule, to require companies to denigrate their product and then do their

best to explain why the allegation is untrue.â€

There is a great deal of jockeying taking place. Matrixx shareholders are

concerned Matrixx will succeed in obscuring the notion of reporting adverse

events and, effectively, obtain a decision that could require drugmakers to

report a tidal wave of adverse events, many of which may be irrelevant to a

lawsuit. Meanwhile, PhRMA and BIO last summer jointly filed a

friend-of-the-court own brief in which they argued that a “reasonable investor

would not base investment decisions on statistically insignificant reports of

adverse events, which are unlikely to threaten a drug’s sales†(â see

thisâ ).

But is statistically insignificant really insignificant? Justice Elena Kagan

offered the example of a contact lens solution that was used by millions and

linked to 10 cases of blindness. “Would you stop using that product, and would

a reasonable investor want to know about those ten cases?†she offered.

“I’d stop using the product, and if I were holding stock in that company, I

would sell the stock.†What do you think?

Sent via BlackBerry by AT & T

[Guest guest]

http://www.pharmalot.com/2011/01/the-legal-battle-over-adverse-event-disclosure/

• â Pharma Blogâ  Â» â 2011â  Â» â Januaryâ  Â» â 11â 

â The Legal Battle Over Adverse Event Disclosureâ 

Make a comment

By Ed Silverman // â  January 11th, 2011â  // 10:10 am

Should drugmakers disclose all adverse event reports that may not show

statistically significant evidence that a side effect is actually caused by a

specific drug? The issue is now before the US Supreme Court involving a case

brought by investors against Matrixx Initiatives, which was sued for allegedly

concealing side effect reports that its Zicam over-the-counter cold med caused

people to lose their sense of smell, known as anosmia (â back storyâ ).

And in oral arguments yesterday, the case made by the lawyer for Matrixx may not

have passed the smell test after he insisted Matrixx did not commit fraud when

it failed to disclose cases in which Zicam patients reportedly lost their sense

of smell. Since drugmakers receive real or hearsay adverse event reports almost

every day, Jon Hacker maintained shareholders must show a statistically

significant number of adverse reports before proceeding with a securities fraud

class action.

But a few Supreme Court Justices eagerly challenged his notion. “I’m an

investor in Matrixx,†Chief Justice Jr. posited, according to

â The National Law Journalâ . “I worry whether my stock price is going to go

down. You can have some psychic come out and say ‘Zicam is going to cause a

disease’ with no support whatsoever, but if it causes the stock to go down

20%, it seems to me that’s material.â€

And Justice Ruth Bader Ginsburg noted that as adverse event reports surfaced

publicly about Zicam and loss of smell, Matrixx issued a statement falsely

asserting the concerns were “completely unfounded.†She suggested this was

sufficient reason to proceed with a fraud claim, the paper notes.

But Hacker argued that requiring a company to disclose even unfounded claims

would cause self-inflicted damage that would also upset shareholders. “A false

report about us is about to come out. It requires the company to first ring the

bell and then un-ring it in the same statement, and that’s not a good rule for

companies,†he argued, according to the paper. “Shareholders wouldn’t want

that rule, to require companies to denigrate their product and then do their

best to explain why the allegation is untrue.â€

There is a great deal of jockeying taking place. Matrixx shareholders are

concerned Matrixx will succeed in obscuring the notion of reporting adverse

events and, effectively, obtain a decision that could require drugmakers to

report a tidal wave of adverse events, many of which may be irrelevant to a

lawsuit. Meanwhile, PhRMA and BIO last summer jointly filed a

friend-of-the-court own brief in which they argued that a “reasonable investor

would not base investment decisions on statistically insignificant reports of

adverse events, which are unlikely to threaten a drug’s sales†(â see

thisâ ).

But is statistically insignificant really insignificant? Justice Elena Kagan

offered the example of a contact lens solution that was used by millions and

linked to 10 cases of blindness. “Would you stop using that product, and would

a reasonable investor want to know about those ten cases?†she offered.

“I’d stop using the product, and if I were holding stock in that company, I

would sell the stock.†What do you think?

Sent via BlackBerry by AT & T