Former FDA Commissioner, J&J Targeted in Federal Lawsuit

Posted in Regulatory and Compliance by Chris Newmarker on February 8, 2016

Margaret Hamburg, MD, the former FDA commissioner, is accused of conspiring to suppress information about the harmful effects of Johnson & Johnson’s antibiotic Levaquin—at the same time her husband ran a hedge fund that profited from J&J stock.

Margaret Hamburg
Margaret Hamburg

Chris Newmarker

Nearly a year after Margaret Hamburg resigned as FDA commissioner, she is facing damning accusations in a federal lawsuit filed by a conservative, activist, government watchdog lawyer.

Hamburg, MD, is accused of helping to suppress information about the harmful effects of Johnson & Johnson’s antibiotic Levaquin so that her husband Peter Brown, co-CEO of hedge fund Renaissance Technologies, could profit enormously from hundreds of millions of dollars in J&J stock, according to a lawsuit that lawyer Larry Klayman filed last month in U.S. District Court for the District of Columbia. Klayman is representing six people injured from using the drug.

"This is a major scandal, one that seriously affects the health of not just plaintiffs, but thousands of others. Defendants are alleged to have callously reaped large financial gains and profits at the expense of my clients. The entire sad episode is an example of how some in private industry are alleged to conspire and act with Washington, DC, public officials to greedily line their own pockets, leaving everyone else to be damned,” Klayman said in a news release.

A defense lawyer in the case could not be immediately reached. Hamburg’s lawyers described the lawsuit as “patently false, reckless and offensive” to ABC 8News in Richmond, VA.

Johnson & Johnson, which is also a defendant in the case, said in a statement that it acted appropriately over Levaquin. "We stand behind Levaquin and believe our actions regarding the medicine have been appropriate, responsible, and in the best interests of patients," J&J's Janssen Pharmaceuticals subsidiary said in a statement.

Defendants in the case include Hamburg, Brown, Renaissance Technologies, Renaissance founder James Simons, former Renaissance co-CEO Robert Mercer, Johnson & Johnson, Johnson & Johnson Pharmaceutical Research & Development LLC, and Ortho-McNeil-Janssen Pharmaceuticals Inc.

Klayman has a reputation for controversial hardball tactics. The Washington Post's David Montgomery in 2014 described him as the "lawyer who launched hundreds of lawsuits against federal agencies, White House officials, Cabinet secretaries, judges, journalists, former colleagues, foreign governments, dictators, presidents, this newspaper, and others who offended his hair-trigger sense of right and wrong." Sometimes the lawsuits merely make a point or uncover damning documents. Other times, Klayman has accomplished more: A lawsuit against the National Security Agency caused a federal judge to question the constitutionality of the agency's phone records program. 

With the lawsuit over Levaquin, Klayman seems to be making two major argument when it comes to Hamburg:

1. There was a conflict of interest with regards to J&J.

The complaint notes that Hamburg and Brown were able to keep their interest in Renaissance Technologies’ Medallion on the argument that the fund was based on computerized, rapid trades that made it like a blind trust. But the complaint goes on to show how the fund often held large stakes in many of the very companies Hamburg was in charge of regulating as FDA commissioner. "Many of Renaissance Technologies’ profits are from drug companies and from companies considered 'significantly regulated' by the FDA," Klayman writes in the complaint.

As co-CEO, Brown and through him Hamburg shared in Renaissance's profits, and J&J was often a company that was heavily invested in, with hundreds of millions of dollars invested in J&J at many points during Hamburg's six-year tenure as FDA commissioner. 

2. Hamburg acted in ways that benefited J&J and hurt regular people when it came to Levaquin.

The actions and non-actions of Hamburg and other defendants suppressed public release of a 2013 FDA report that directly linked Levaquin to mitochondrial toxicity and implicated neurodegenerative diseases, including ALS, Alzheimer’s and Parkinson’s diseases, according to the complaint. Sales of Levaquin had increased dramatically despite the increasing number of reports of the severe adverse reactions in elderly patients, with FDA FAERS data showing deaths and injuries mounting between 2009 and 2013. 

Hamburg, the compliant alleges, ignored hundreds of requests from people claiming devastating side effects, as well as concerned elected officials, who wanted FDA to add additional safety warnings for Levaquin. It was not until November 2015, when Hamburg was no longer commissioner, that an FDA Advisory Committee voted overwhelmingly that the information on the Levaquin label was inadequate and did not provide appropriate warnings of the drug's dangers. 

The complaint, however, lacks a smoking gun that ties the two together: the profits Renaissance made from J&J stock and Hamburg's actions when it came to regulating Levaquin. Time will tell whether Klayman finds the link. No matter what, the case is bound to heighten scrutiny of FDA at a time when it is already facing many tough questions about its regulation not only of pharmaceuticals, but also of medical devices. 

For example, the LA Times, U.S. senators, and potentially the U.S. Justice Department are questioning why FDA failed to act sooner when it came to a special endoscope called a duodenoscope that was involved in deadly superbug outbreaks.

Robert Califf, MD, whom President Barack Obama nominated to replace Hamburg, presently has his Senate confirmation vote under "holds" from several senators who, among other things, are questioning how how he helped manage a clinical trial at the heart of an investigation into the popular blood thinner Xarelto. A medical device error may have distorted results in favor of Johnson & Johnson and Bayer. During his confirmation hearing, Califf stressed the importance of post-market surveillance for drugs and devices.

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.