February 28, 2012
Life Sciences Update


You’ve Been Warned: FDA Warning Letters Are Not Final Agency Actions, But They Carry More Risk Than Ever

Drug and medical device manufacturers typically respond to FDA warning letters by professing innocence but agreeing to comply with the recommended corrective action from FDA. For example, the manufacturer will agree to withdraw a promotional piece even while disagreeing that the company’s conduct violated any rule, regulation, or statute. The rationale for this approach is simple: the costs of picking a fight with FDA and defending the company’s actions are outweighed by the benefits of quickly resolving the dispute. But that calculation may be changing. Despite clear statements from FDA and several courts regarding the provisional nature of FDA warning letters, private litigants and state governmental entities in litigation against drug and medical device manufacturers regularly seize on these letters and offer them as evidence of the manufacturers’ alleged misconduct. In light of a number of multi-million dollar verdicts that have emerged from some of those trials, manufacturers may need to formulate a more strategic response to these letters and continue to argue against their admissibility.


FDA’s Policies and Practices Regarding Warning Letters


As part of its regulatory power over the drug and medical device industries, FDA can implement a number of enforcement actions to correct regulatory or statutory violations. These actions include recall, seizure, injunction, administrative detention, civil money penalties, and/or prosecution to achieve correction. FDA can also take less severe steps, such as sending out a warning letter that identifies a perceived regulatory or statutory violation and allows the manufacturer to respond and/or take voluntary corrective action, if necessary.1 According to FDA’s own Regulatory Procedures Manual:

A Warning Letter is informal and advisory. It communicates the agency’s position on a matter, but it does not commit FDA to taking enforcement action. For these reasons, FDA does not consider Warning Letters to be final agency action on which it can be sued.”2

The number of warning letters issued by FDA has increased since mid-2009, when FDA announced that it would no longer require the agency’s Office of Chief Counsel to review letters for legal sufficiency except in cases involving “significant legal issues.”3 FDA’s stated goal was to increase enforcement and to limit enforcement delays. The new policy had an immediate impact: FDA’s Division of Drug Marketing, Advertising and Communications (DDMAC)4 sent nearly twice as many warning letters and untitled letters in 2009 as it did in 2008, and 25% more in 2010 than in 2009.5 Although the number of letters declined in 2011, the total number of letters in 2011 was over 40% higher than in 2008, before the policy change was made.6


Judicial Analysis of FDA Warning Letters

Several federal district courts have recognized the inconclusive nature of FDA warning letters when addressing questions of standing and ripeness of a dispute between FDA and a manufacturer who receives a warning letter.7 Recently, the D.C. Circuit agreed with that conclusion in Holistic Candlers and Consumers Association v. U.S. Food and Drug Administration.8


The dispute in Holistic Candlers centered on FDA warning letters sent to a number of ear candle manufacturers.9 The warning letters stated that ear candles were considered medical devices, and therefore, they could not be sold without FDA’s approval. The manufacturers were directed to cease marketing and distributing ear candles and threatened with regulatory action if they failed to comply.


Several of the manufacturers sued FDA to challenge the warning letters. The district court dismissed the suit on several grounds, including that the plaintiffs lacked standing and a cause of action.10 The D.C. Circuit affirmed the dismissal. Although the court concluded that the plaintiffs had standing, it held that they did not have a cause of action under the Administrative Procedure Act because the warning letters did not constitute final agency action. Rejecting claims that the letters represented FDA’s final word on the legality of ear candles, the court concluded that “[t]he letters plainly do not mark the consummation of FDA’s decision making,” and do not “represent a decision determining rights or obligations, or one from which legal obligations flow.” 11


Use of Warning Letters as Evidence in Litigation


Despite these holdings about the inconclusive nature of FDA warning letters in the context of standing and ripeness, lawyers for state agencies and private litigants have successfully offered such letters as evidence of alleged improper conduct by drug and device manufacturers in consumer protection, products liability and commercial cases.


State attorneys general frequently offer warning letters as evidence of deceptive or fraudulent trade practices under state consumer protection laws. For example, an FDA warning letter sent to Janssen Pharmaceuticals, Inc. about a 2004 “Dear Doctor” letter has become a key piece of evidence in multiple actions brought by state attorneys general for false and deceptive marketing relating to the antipsychotic drug Risperdal®.


In a case brought by the West Virginia Attorney General, Janssen was ordered to pay nearly $4 million in civil penalties based on allegedly false and misleading claims made in the 2004 “Dear Doctor” letter.12 The trial court concluded that Janssen’s receipt of an FDA warning letter concerning the 2004 “Dear Doctor” letter established that Janssen had violated the West Virginia Consumer Protection Act and should be penalized $500 for every copy of the 2004 “Dear Doctor” letter it had disseminated. The same FDA warning letter was a key piece of evidence in consumer protection trials against Janssen that resulted in a $257 million verdict in Louisiana13 and a $327 million judgment in South Carolina.14 Although the West Virginia judgment was reversed on appeal,15 these cases remain an important reminder of the mischief that FDA warning letters can cause despite their “informal and advisory” character.


These lawsuits against Janssen are not unique. Several major drug and medical device manufacturers are currently defending similar consumer protection claims seeking fines and penalties under state law, some premised almost entirely on a manufacturer’s receipt of a warning letter. In addition, warning letters are being used in products liability cases by plaintiffs’ counsel attempting to prove that improper marketing efforts led to a prescription for the plaintiff. And they are being used in commercial cases, including drug development disputes, in which one company complains that another did not act in accordance with FDA regulations or engaged in a pattern of misconduct.


Strategies for Contending with FDA Warning Letters and Untitled Letters


Given the potential for FDA warning letters or even untitled letters to result in hundreds of millions of dollars in civil or criminal liability (depending on how state consumer protection statutes are categorized), drug and medical device manufacturers may need to reconsider their traditional responses to these letters. Rather than immediately complying with the recommended corrective action, manufacturers should consider seeking clarification or further review from the agency, or even exhausting administrative remedies to challenge the allegations.


Obviously, any decision to respond aggressively to a warning or untitled letter is a serious decision, and the circumstances of each letter must be considered carefully. Challenging the allegations in the letter could involve more short-term expense and additional risk, and the agency may well reject any arguments that are made in response to such a letter. But if a manufacturer is convinced that the allegations are meritless or representative of an improper agency regulation or policy, and large-scale litigation about the alleged violations are anticipated, a more aggressive approach could create a record that may someday be useful in convincing a trial court that the warning or untitled letter should be inadmissible, and certainly not proof of any fraudulent or deceptive trade practice. And even if that legal argument fails, an assertive response to an agency letter creates a factual record that may be helpful in later litigation to show that the manufacturer has always contested the allegations.


Regardless of the response a manufacturer ultimately chooses to make, counsel for drug and medical device manufacturers should never concede that warning letters (much less untitled letters) are admissible as evidence of alleged wrongdoing at trial. Simply put, the letters are inadmissible hearsay. And the public records hearsay exception should not apply because these letters – identified by FDA and multiple courts as non-final, informal and/or advisory – lack the sufficient indicia of trustworthiness required by the Federal Rules of Evidence. Citing Holistic Candlers and similar decisions, defense counsel should argue that warning letters cannot meet this requisite standard because they remain subject to revision, reinterpretation, or withdrawal by FDA. Finally, given the disproportionate importance a jury is likely to place on any letter from FDA, counsel for drug and device manufacturers should also seek to exclude the letters under Rule 403 of the Federal Rules of Evidence because any probative value is substantially outweighed by the danger of unfair prejudice.



1 FDA also issues so-called “Untitled Letters,” which are used for “violations that do not meet the threshold of regulatory significance of a Warning Letter.” For more detail on the distinctions between warning letters and untitled letters, see the FDA Regulatory Procedures Manual at § 4-2-1, Untitled Letters, available here.
2 FDA Regulatory Procedures Manual at §4-1-1, Warning Letter Procedures, available here.
3 See Margaret A. Hamburg, M.D., Commissioner of Food and Drugs, Remarks on "Effective Enforcement and Benefits to Public Health" at Food and Drug Law Institute (August 6, 2009), available here; FDA, Regulatory Procedures Manual at § 4-4 ex. 4-1, available here.
4 In September 2011, DDMAC became the Office of Prescription Drug Promotion, or OPDP.
5 Derrick Gingery, FDA’s Rx Enforcement Letter Output Drops In 2011; OPDP Sees Improvement In Promotions, The Pink Sheet, January 16, 2012, at 1.
6 Id.
7 See Regenerative Scis., Inc. v. FDA, No. 09-cv-00411, 2010 WL 1258010, at *7 (D. Colo. Mar. 26, 2010); Schering-Plough Healthcare Prods., Inc. v. Schwarz Pharma, Inc., 547 F. Supp. 2d 939, 946 (E.D. Wis. 2008); Clinical Reference Lab., Inc. v. Sullivan, 791 F. Supp. 1499, 1501, 1503-03 (D. Kan. 1992).
8 No. 11-5118, 2012 WL 5831 (D.C. Cir. Jan 3, 2012).
9 Ear candles are wax cones that, when inserted into the ear and lit on fire, are supposed to alleviate a variety of conditions.
10 Holistic Candlers and Consumer Assoc. v. FDA, 770 F. Supp. 2d 156, 159 (D. D.C. 2011).
11 2012 WL 5831, at *2-3.
12 State of West Virginia ex rel. McGraw v. Johnson & Johnson et al., No. 04-C-156 (W. Va. Cir. Ct. Brooke County Aug. 19, 2008).
13 Caldwell ex rel. State of Louisiana v. Janssen Pharms., Inc., No. 04-C-3967 (La. 27th. Jud. Ct. Oct. 13, 2010).
14 Wilson ex rel. State of South Carolina v. Ortho-McNeil-Janssen Pharms., Inc., No. 07-CP-42-1438 (S.C. Ct. Com. Pl. Spartanburg June 3, 2011).
15 See State of West Virginia ex rel. McGraw v. Johnson & Johnson et al, 704 S.E.2d 677 (W. Va. 2010).

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