Limitations Imposed on Use of FDA Warning Letters

By Anne K. Walsh –

The Supreme Court of Arkansas recently overturned (here and here) a lower court’s $1.2 billion award to the State of Arkansas, and also reversed and remanded the decision granting over $200 million in attorney’s fees and costs to the state.  Putting aside the huge dollar figures at stake for Johnson & Johnson, the defendant, what makes this decision interesting for FDA Law Blog followers is the court’s opinion limiting the use of FDA’s Warning Letter as evidence.  While this litigation involved allegations specific to the state’s false claims act and consumer fraud statute, the implications potentially reach beyond the State of Arkansas or these legal theories.

At trial against J&J, the State of Arkansas relied heavily on a 2004 Warning Letter issued to Janssen Pharmaceutica, Inc., the J&J unit responsible for marketing Risperdal, an antipsychotic drug.  FDA objected to a “Dear Healthcare Provider” letter that Janssen had sent in 2003, claiming Janssen failed to disclose certain information contained in the product labeling, minimized the risk of certain adverse events, failed to recommend regular monitoring to identify adverse events, and misleadingly claimed that Risperdal is safer than other atypical antipsychotics.  Janssen attempted to convince FDA to the contrary, but ultimately sent a corrective letter to the recipients of the “Dear Healthcare Provider” letter.  FDA closed the matter six months after the Warning Letter was issued.

At trial, the State of Arkansas claimed the Warning Letter supported its position that Janssen had violated the Arkansas Medicaid Fraud False Claims Act and the Arkansas Deceptive Trade Practices Act.  Indeed, the State referred to the Warning Letter repeatedly throughout the trial, and mentioned it at least 15 times during closing arguments alone. 

On appeal, Janssen argued that the circuit court wrongly allowed Arkansas to use the Warning Letter as evidence, claiming it was inadmissible hearsay under the state’s rules of evidence.  Hearsay is generally inadmissible unless subject to a specified exception.  Here, the issue for the court was whether the Warning Letter was a public record containing factual findings resulting from an investigation made “pursuant to authority granted by law,” (admissible), or whether the factual findings resulted from a “special investigation of a particular complaint, case, or incident,” (inadmissible).  Primarily relying on FDA’s language in the Warning Letter itself and the closeout letter it issued, the supreme court found that the Warning Letter stemmed from a special investigation of the Dear Healthcare Provider letter, and was not part of FDA’s routine recordkeeping authority.  Therefore, the court concluded that the Warning Letter was inadmissible hearsay.

The dissent disagreed that FDA conducts a “special investigation” every time it issues a Warning Letter, focusing on the stated mission of FDA’s Division of Drug Marketing, Advertising and Communication’s (“DDMAC”), the predecessor to FDA’s Office of Prescription Drug Promotion.  Because the office was created to monitor and surveil prescription drug advertising, the dissent stated that “it appears that the warning letter was merely the result of the agency’s routine duties of reviewing and regulating the information on, and advertising of, drugs such as Risperdal.”  Slip op. at 29.  

The majority also discussed the unfair prejudice resulting from the Warning Letter:  “Reports issued by governmental agencies, because of their ‘official’ nature, may well carry inordinate weight in the minds of jurors.”  Slip op. at 26 (quoting Boude v. Union Pac. R. Co., 277 P.3d 1221, 1225 (Mont. 2012)).   The court concluded that the Warning Letter was more prejudicial than probative, and thus inadmissible even if it met the public records exception for hearsay evidence.

For jurisdictions that have rules of evidence excluding “special investigations” like Arkansas (for example, Delaware, Indiana, Louisiana, and Montana, to name a few), the Arkansas Supreme Court’s analysis may be persuasive.  For those states without similar exceptions, however, the ruling still may be helpful in its findings related to the prejudicial nature of FDA’s Warning Letters.  Because the court’s analysis was wholly independent of the underlying statutory basis for the litigation, it also could impact other types of cases involving FDA-regulated products.  Several amicus briefs were filed by interested parties, including Washington Legal Foundation and Allied Educational Foundation, Pharmaceutical Research and Manufacturers of America, Public Citizen, AARP, the Arkansas Chamber of Commerce, a former FDA Commissioner, and 34 states.