Physician Conflicts of Interest in Court: Beyond the Independent Physician Litigation Heuristic

• Publication year: 2014

Physician Conflicts of Interest in Court: Beyond the Independent Physician Litigation Heuristic

Kate Greenwood

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PHYSICIAN CONFLICTS OF INTEREST IN COURT: BEYOND THE "INDEPENDENT PHYSICIAN" LITIGATION HEURISTIC

Kate Greenwood^*

Abstract

While physicians' financial relationships with pharmaceutical and medical device manufacturers are increasingly of concern to legislators and regulators, plaintiffs have had only limited success pursuing private law remedies for the harms that result from conflicts of interest. Courts have long channeled individual patients' claims against their conflicted doctors into the medical malpractice cause of action, where patients have difficulty establishing that their physicians' conflicts caused them to suffer concrete and compensable injuries. With recent notable exceptions, courts have also blocked patients' claims against drug and device manufacturers. Courts apply the learned intermediary doctrine to dispose of failure-to-warn personal injury suits, without regard to whether the plaintiff's physician had a financial relationship with the defendant manufacturer. Third-party payers, such as employers, insurance companies, and union health and welfare funds, have similarly struggled to overcome a strong presumption of physician independence. Courts routinely find that a physician's prescribing decision breaks the chain of causation between a manufacturer's illegal promotional efforts and a payer's obligation to pay for a prescription, even when those promotional efforts include the payment of kickbacks.

Courts can and should move beyond the "independent physician"

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litigation heuristic. In personal injury cases, courts can do this by engaging in a fact-based analysis of not just whether a financial relationship affected a physician's decision to prescribe a drug or device but also whether the defendant drug or device company intended the relationship to have such an effect. The latter inquiry is more straightforward than the former, which could work to plaintiffs' advantage, and it is equally relevant to the question whether the learned intermediary doctrine should apply. In economic injury cases, courts can move beyond the heuristic by allowing plaintiffs to use standard statistical methods to demonstrate that physicians' prescribing decisions were not independent in the aggregate. If the doctrine were to evolve in these ways, it would bring closer the goal of ensuring that patients and payers are fairly compensated for the harms caused by conflicts of interest. It would also provide an additional incentive to drug and device companies to ensure that the payments they make to physicians are legitimate.

Table of Contents

Introduction.........................................................................761

I. Financial Relationships, Conflicts of Interest, and Conscious and Unconscious Bias..................................767

II. A Cause of Action for Physician Conflicts of Interest?..........................................................................774

III. Physician-Industry Relationships in Pharmaceutical and Medical Device Personal Injury Actions.........782

A. The Learned Intermediary Doctrine in Theory and in Practice......................................................................783
B. Exceptions to the Learned Intermediary Doctrine.....786
C. An Exception for Physician-Industry Relationships? 789

IV. Physician-Industry Relationships in Pharmaceutical and Medical Device Economic Injury Actions.........794

A. The "Causal Chain of Injury" Hurdle.......................799
B. Unbreaking the Causal Chain: Establishing the Proximate Cause of a Prescription............................806

V. Toward an Amplified Role for "Litigant Regulation" of Physician Conflicts of Interest.............................811

A. Federal and State Regulation of Physician-Industry

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Relationships..............................................................812
B. Moving Beyond the "Independent Physician" Litigation Heuristic in Personal Injury Cases............................815
C. Moving Beyond the "Independent Physician" Litigation Heuristic in Economic Injury Cases...........................819

Conclusion............................................................................822

Introduction

Many scholars who have considered the role of private enforcement in the modern regulatory state have concluded that "litigant regulation" is inferior to regulation promulgated and enforced by an administrative agency or other centralized authority.¹ Similarly, scholars who study physicians and their relationships with the pharmaceutical and medical device industries tend to focus on legislative and regulatory fixes to conflict of interest concerns, while discounting or ignoring the private law landscape. Not all of the significant gaps that exist in the regulatory structure governing physician-industry relationships can or will be filled by formal regulation, however. Private lawsuits brought by patients and third-party payers could play a salutary gap-filling role. Whether they do so will depend on how the doctrine—which is in a state of flux—evolves.

While physicians' financial relationships with pharmaceutical and medical device manufacturers are increasingly of concern to legislators and regulators, plaintiffs have had only limited success pursuing private law remedies for the harms that result from conflicts of interest.² Courts have long channeled individual patients' claims

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against their conflicted doctors into the medical malpractice cause of action, where patients have difficulty establishing that their physicians' conflicts caused them to suffer concrete and compensable injuries.³ Courts have also blocked patients' claims against drug and device manufacturers.⁴ Nearly all courts apply the learned intermediary doctrine, even where the plaintiff's physician has a financial relationship with the defendant manufacturer.⁵ Third-party payers, such as employers, insurance companies, and union health and welfare funds, have similarly struggled to overcome a strong presumption of physician independence.⁶ Courts regularly find that a physician's prescribing decision breaks the chain of causation between a manufacturer's illegal promotional efforts and a payer's obligation to pay for a prescription, even when those promotional efforts include the payment of kickbacks.⁷

A handful of recent cases have gone the other way, however, including Murthy v. Abbott Laboratories, in which a district court in Texas declined to dismiss the plaintiff's failure-to-warn claim on the grounds that a financial relationship between the plaintiff's physician and the defendant manufacturer made the learned intermediary doctrine inapplicable, and Kaiser Foundation Health Plan v. Pfizer, in

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which the First Circuit Court of Appeals approved of the use of a regression analysis to determine what percentage of prescriptions of the anti-epileptic drug Neurontin was caused by the defendants' fraudulent marketing.⁸

The plaintiff in the former case, Gayathri Murthy, participated in a clinical trial of Humira, a rheumatoid arthritis drug manufactured by the defendant, Abbott Laboratories.⁹ Murthy's rheumatologist, Dr. Jovan M. Popovich, was one of the clinical trial's investigators and Abbott paid him for his work.¹⁰ After Murthy developed cancer, she sued Abbott for, among other things, negligent failure-to-warn.¹¹

Murthy argued that, because Abbott compensated her doctor for his role running the clinical trial, the learned intermediary doctrine did not apply and Abbott had an obligation to warn her of the risks of Humira, instead of, or in addition to, Dr. Popovich.¹² In a decision issued in November of 2011, the Murthy court adopted the plaintiff's argument and found, as a matter of law, that "Abbott cannot avail itself of the learned intermediary doctrine."¹³ The decision was supported with references to social science research on physician attitudes toward financial relationships with the pharmaceutical industry and to research on the influence on behavior of even token gifts.¹⁴ The court also cited to an article expressing concerns about physician-investigators who are responsible for recruiting and enrolling participants into clinical trials being compensated on a per capita basis.¹⁵ The Murthy court concluded that "a doctor who receives gifts or compensation from a drug company may no longer, 'as the prescriber, stand[] between the drug and the ultimate consumer,' as the

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doctor has an incentive to prescribe a particular drug or, in this case, enroll a patient in a clinical trial."¹⁶

The court's decision, and particularly its conclusion that Dr. Popovich's financial relationship with Abbott compromised his independence, was widely reported and, at least in some quarters, heavily criticized.¹⁷ Defense attorney James M. Beck called Murthy "loud wrong,"¹⁸ noting that it "announced what amounts to a per se rule that any doctor receiving compensation for participating in a clinical trial involving an investigational drug can't qualify as a learned intermediary under Texas law, although, of course, both side's [sic] experts can be paid much more."¹⁹

In March of 2012, in response to a motion seeking permission to appeal, the Murthy court withdrew its November decision and issued a new one in its place.²⁰ The court's discussion of the learned intermediary doctrine was largely unchanged, except that it was no longer willing to conclude as a matter of law that Dr. Popovich's independence was compromised.²¹ Rather, the court wrote, it "would have to examine the factual circumstances surrounding the compensation of [the plaintiff's] physician in order to evaluate whether application of the learned intermediary doctrine is appropriate" because, "when a physician receives compensation or gifts from drug companies, his or her role as the neutral decision-maker may...