Federal Trade Commission v. Vyera Pharmaceuticals, LLC

Background

The Federal Trade Commission, New York, California, Ohio, Pennsylvania, Illinois, North Carolina, and Virginia sued Vyera Pharmaceuticals, LLC, Phoenixus AG, Martin Shkreli, and Kevin Mulleady in an antitrust action. The plaintiffs allege that the defendants impeded generic competition with Daraprim by entering restrictive contracts with U.S. drug distributors and suppliers of pyrimethamine, Daraprim’s active pharmaceutical ingredient. Trial was scheduled to begin on December 14, 2021.

The opinion concerned the plaintiffs’ motion to exclude testimony from Sheldon Bradshaw, offered as an FDA regulatory expert for the defendants. Bradshaw served as the FDA’s Chief Counsel from 2005 to 2007 and was a partner at King & Spalding. His affidavit contained 25 opinions. Some addressed FDA procedures for reviewing and approving generic-drug applications. Many others addressed what generic-drug manufacturers should have done to obtain Daraprim or pyrimethamine, and attributed delays in generic approval to those manufacturers rather than to Vyera’s conduct. Bradshaw also offered an opinion about compounded pyrimethamine drugs.

Legal standard

Federal Rule of Evidence 702 governs expert testimony. The party offering an expert must show that the testimony is admissible. The court must determine whether the witness is qualified and whether the opinion is based on a reliable foundation and is relevant to the issues the factfinder must decide. Experts may assist the factfinder with matters outside ordinary knowledge, but they may not replace the factfinder, evaluate witness credibility, offer legal conclusions, or merely recite evidence in support of an argument.

Rulings

The court held that Bradshaw was qualified to address the FDA regulatory process, including factors the FDA considers when granting exemptions from an Import Alert and the FDA’s possible responses to specific requests. But he was not qualified to offer opinions about the business decisions of generic-drug manufacturers or suppliers because his expertise did not include management of a generic-drug company or the pharmaceutical industry. Those opinions had to be stricken. The court also ruled that Bradshaw could not use expert testimony to attack assumptions underlying the plaintiffs’ expert’s excess-profit calculations; those arguments could be made by defense counsel instead.

The court granted the plaintiffs’ challenge to testimony concerning the credibility, motives, and state of mind of people associated with generic manufacturers. It explained that deciding credibility, motives, and state of mind belongs to the factfinder. The court granted the challenge to Bradshaw’s opinions about the FDA’s hypothetical conduct in part: some general testimony about the complexity of the FDA approval process and the variables affecting approval timing could remain, but other passages offered opinions beyond Bradshaw’s qualifications and had to be stricken.

The court also granted the plaintiffs’ objection to Bradshaw’s narrative summary of the record. Facts could be explained as necessary background for an otherwise admissible expert opinion, but an expert could not provide a bare narrative of events or use facts to support opinions that were themselves inadmissible. Finally, the court stated that opinions newly disclosed in Bradshaw’s affidavit could not be offered if they were not timely disclosed under the federal disclosure rules. The plaintiffs’ motion was granted in part, and only a fraction of Bradshaw’s affidavit survived. The defendants were ordered to strike the inadmissible material from the October 20 affidavit and provide the plaintiffs with a redacted affidavit by November 29, 2021, at noon; the parties were to raise any remaining dispute with the court by December 3, 2021, at noon.