H. (T.) v. NOVARTIS PHARMACEUTICALS CORPORATION

Amicus Curiae Brief of Pharmaceutical Research and Manufacturers of America

Cal.December 15, 2016

$233898 eVPREME COURT COPY avai. IN THE SUPREME COURT OF CALIFORNIA T.H. AND CARDWELL HAMILTON SUPREME COURT FILED DEC 152016 Jorge Navarrete Clerk Plaintiffs and Appellants, Vv. NOVARTIS PHARMACEUTICALS CORP., Defendant and Respondent Deputy Review of a Decision of the Court of Appeal, Fourth Appellate District, Division One, Case No. D067839 (McConnell, P.J.) From a Decision of the Superior Court San Diego County, Case No. 37-2013-00070440-CU-MM-CTL(Lewis, J.) APPLICATION BY THE PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICATO FILE AN AMICUS CURIAE BRIEF IN SUPPORT OF NOVARTIS PHARMACEUTICALS CORP. *Jeffrey M. Davidson Michael X. Imbroscio (Pro Hac Vice pending) COVINGTON & BURLING LLP Paul W. Schmidt (Pro Hac Vice pending) OneFrontStreet Gregory L. Halperin (Pro Hac Vice pending) San Francisco, CA 94111 COVINGTON & BURLING LLP Telephone: (415) 591-7021 850 10th Street NW Facsimile: (415) 591-6091 Washington, DC 20001 _ jdavidson@cov.com Telephone: (202) 662-6000 RECEIVED Facsimile: (202) 662-6291 mimbroscio@cov.com pschmidt@cov.com ghalperin@cov.com CLERK SUPREME COURT ULL 07 2016 December7, 2016 Attorneysfor Amicus Curiae Pharmaceutical Research and Manufacturers ofAmerica Pursuant to Appellate Rule 8.520(f), the Pharmaceutical Research and Manufacturers of America (“PhRMA”) respectfully seeks leave to file the accompanying amicus curiae brief in support of Defendant Novartis Pharmaceuticals Corp.' PhRMAis a voluntary, nonprofit association comprised of the leading pharmaceutical research and technology companies. PhRMA membersare devoted to inventing medicinesthat allow patientsto live longer, healthier, and more productive lives. In 2015 alone, PhRMA membersinvested $58.8 billion in discovering and developing new medicines. (PhRMA, 2016 Profile: Biopharmaceutical Research Industry (2016) p.ii .) PhRMAfrequently files amicus briefs on issues that affect its members, and the issue presented in this case is especially crucial to them. Every brand-name companyfaces generic competition. By expanding the already substantial litigation risks that brand-name companiesface to encompassthe risks created by their generic competitors’ products, the Court of Appeal’s outlier holding subjects each of PhARMA’s members to unpredictable and potentially immense liability. PhRMAis uniquely positioned to address the unfairness to its members of the Court of Appeal’s decision and the accompanyingeffect that the decision could have on innovation and the public health. PhRMAbelievesits views will assist the ' No party’s counsel authored this brief in whole or in part. No party or party’s counsel made a monetary contribution intended to fund the preparation or submission ofthis brief, and no person other than amicus curiae, its members, or its counsel made such a monetary contribution. Although Defendant is a member of PhRMA,it has not contributed financially to the preparation ofthis brief. Court in resolving this case by providing a unique perspective on the practical implications of affirming the decision below. Dated: December7, 2016 Respectfully submitted, /s/ Jeffrey M. Davidson Jeffrey M. Davidson COVINGTON & BURLING LLP OneFrontStreet San Francisco, CA 94111 Telephone: (415) 591-7021 Facsimile: (415) 591-6091 jdavidson@cov.com Michael X. Imbroscio Paul W. Schmidt Gregory L. Halperin COVINGTON & BURLING LLP 850 Tenth Street NW Washington, DC 20001 Telephone: (202) 662-6000 Facsimile: (202) 662-6291 mimbroscio@cov.com pschmidt@cov.com ghalperin@cov.com Counselfor Amicus Curiae Pharmaceutical Research and Manufacturers ofAmerica PROOF OF SERVICE I, Romeo Berana, am a resident of the State of California and over the age of 18 years. Neither I, nor myclient, the Pharmaceutical Research and Manufacturers of America, are a party to this action. My business address is Covington & Burling LLP, One Front Street, San Francisco, CA 94111. On December7, 2016, I caused the following documententitled: APPLICATION BY THE PHARMACEUTICAL RESEARCH AND MANUFACTURERSOF AMERICA TO FILE AN AMICUS CURIAE BRIEF IN SUPPORT OF NOVARTIS PHARMACEUTICALS CORP. to be served on the following persons by delivering a true copy thereof, in a sealed envelope, to Federal Express for overnight delivery: Kevin F. Quinn BenjaminIsrael Siminou Thorsnes Bartolotta McGuire 2550 Fifth Avenue, Suite 1100 San Diego, CA Leslie A. Brueckner Public Justice Pc 555 12th Stret, Suite 1230 Oakland, CA Eric G. Lasker Katharine R. Latimer Hollingsworth LLP 1350 I Street NW Washington, DC Erin McCalmon Bosman Julie Yongsun Park Morrison & Foerster LLP 12531 High Bluff Drive, Suite 100 San Diego, CA Clerk of the Court Fourth District Court of Appeal Division One 750 B Street, Suite 300 San Diego, CA 92101 Clerk of the Court San Diego County Superior Court ATTN:Hon.Joan M. Lewis 220 West Broadway San Diego, CA 92101 I declare under the penalty of perjury underthe lawsofthe State of California that the foregoing is true and correct. Executed in San Francisco, California, December 7, 2016. D-G2__= eeRomeo Bérana $229428 IN THE SUPREME COURTOF CALIFORNIA T.H. AND CARDWELL HAMILTON Plaintiffs and Appellants, NOVARTIS PHARMACEUTICALS CORP., Defendant and Respondent Review of a Decision of the Court of Appeal, Fourth Appellate District, Division One, Case No. D067839 (McConnell, P.J.) From a Decision of the Superior Court San Diego County, Case No. 37-2013-00070440-CU-MM-CTL(Lewis, J.) BRIEF OF THE PHARMACEUTICAL RESEARCH AND MANUFACTURERSOF AMERICAASAMICUS CURIAE IN SUPPORT OF NOVARTIS PHARMACEUTICALS CORP. *Jeffrey M. Davidson COVINGTON & BURLING LLP One Front Street San Francisco, CA 94111 Telephone: (415) 591-7021 Facsimile: (415) 591-6091 jdavidson@cov.com December 7, 2016 Michael X. Imbroscio (Pro Hac Vice pending) Paul W. Schmidt (Pro Hac Vice pending) Gregory L. Halperin (Pro Hac Vice pending) COVINGTON & BURLING LLP 850 10th Street NW Washington, DC 20001 Telephone: (202) 662-6000 Facsimile: (202) 662-6291 mimbroscio@cov.com pschmidt@cov.com ghalperin@cov.com Attorneysfor Amicus Curiae Pharmaceutical Research and Manufacturers ofAmerica CERTIFICATE OF INTERESTED ENTITIES OR PERSONS Pursuant to Appellate Rule 8.208, the Pharmaceutical Research and Manufacturers of America (“PhRMA”) states that it is a trade association with no parent corporations. No entity or person has a 10% or greater ownership interest in PARMA. PhRMAdoesnot know ofany person or entity, other than the parties themselves, that has a financial or other interest in the outcomeofthe proceeding that the justices should consider in determining whether to disqualify themselves. A list of PARMA’s member companies can be foundat http://www.phrma.org/about/ member-companies. TABLE OF CONTENTS CERTIFICATE OF INTERESTED ENTITIES OR PERSONS........ i SUMMARYOF ARGUMENT.........ccscssssseseecseseseesecessssssessesessesesseeraeees 1 ARGUMENT1... cccccccsscsscssnsesseecssneseeceeeeaeeeceseseeeceaesnssassssaessessassesonsesssagereeese 2 I, The Costs of Researching and Developing Innovative Medicines Are Borne Almost Entirely by Brand-Name COMPANIES 0...eee eecceeseseeeseseececeessessseseasesesseeessesseceseeesssesssessenssenese 2 A. Innovator Companies Invest Immense Resources in Researching and Developing New Medicines..............:c:c0 2 B. The Hatch-Waxman Amendments Enable Generic Manufacturers to Copy Innovative Medicinesat Minimal Expense.........ccecccccssessccsseceeseceeecseessessssenssesereenees 4 Il. The Duties Created by the Court of Appeal Would Expose Brand-Name Companiesto Limitless Liabilityo.oo5 Wil. The Court of Appeal’s Massive Expansion of Tort Liability Will Harm Innovation 20.0...cece cessesseeessseesseecnescseeeerenseeeseeseenseees 10 IV. Holding Brand-Name Companies Liable for Injuries Allegedly Sustained from Their Generic Competitors’ Products Will Impair the Usefulness of Pharmaceutical Labeling oo... ceccesseseceescessceececceseeeeeesessseecseasssecesssessessessseesssessesesesons 17 A. The Tort Duties Invented Below Encourage Companies to Warn of Speculative and Hypothetical RiSKS........csceeeeccccessececeeccesecensecereeeeessseeeseseeeseeesseeseessseseressaneens 17 B. Existing Law Amply Incentivizes Pharmaceutical Companies to Adequately Warn of KnownRisks................ 20 V. The Duties Created by the Court of Appeal Are Fundamentally Unfair...eeeeesecsssesesseseseesasesseeseeceensseesaseseese 23 CONCLUSION.....cccccscesesseseeceeetsceeeeseeecseccessceseaneessesseesesssessaesesesavenesasense 25 ji- TABLE OF AUTHORITIES Cases Page(s) Anselmov. Sanofi-Aventis Inc. USA (Kan. Dist. Ct., Oct. 13, 2014, No. 10-CV-77) 2014 WL 8849464oo. ccccccccsssceececcsseesceeenecerserscesssesecsneaeeseeseseesersesseseaecaseaesnssseeeates 7 Barnhill v. Teva Pharmaceuticals USA, Inc. (S.D. Ala., Apr. 24, 2007, No. CIV A 06-0282-CB-M) QOO7T WL 5787186 ........ccccecccsseeccccccecescececcscucueseuscsssesscssscevesescescacevesessesenas 7 Belasco v. Wells (2015) 234 Cal.App.4th 409 [183 Cal.Rptr.3d 840]...eee23 Brown v. Superior Court (1988) 44 Cal.3d 1049 [245 Cal.Rptr. 412, 751 P.2d 470].............passim Cabraly. Ralphs Grocery Co. (2011) 51 Cal.4th 764 [122 Cal.Rptr.3d 313, 248 P.3d L170] ..eceeeceeescececeeccseceecsecensseecsensesseeeessecaceacssessesesseseeseeeesaeenseaseneeseees 10 Carlin v. Superior Court (1996) 13 Cal.4th 1104 [56 Cal.Rptr.2d 162, 920 P.2d 1347] wocceccccsscesecscescecenecseessrceecsesseeseceseesaeesseeseeeseesseseesseaseceeatsenteaseraatenees 14 Chavez v. Glock, Inc. (2012) 207 Cal.App.4th 1283 [144 Cal.Rptr.3d 326]...eeeeeeeeee 9 Colacicco v. Apotex, Inc. (E.D. Pa. 2006) 432 F.Supp.2d 514oeeeeeeseesseeeseesssseseeseaseseneneereaee 7 Cotton v. Buckeye Gas Prods. Co. (D.C. Cir. 1988) 840 F.2d 935 oo. cecseceseeseseerseeeeseeseeeeesaseeneeneees 17 DaCosta v. Novartis AG (D.Or., Mar. 1, 2002, No. CV 01-800-BR) 2002 WL 3ST44.oes ccccsccccscscccscecsccccccsssesesssceesseseusecesseecasnsvesscesesseeessseeesaeveseenes 7 Dowhalv. SmithKline Beecham Consumer Healthcare (2004) 32 Cal.4th 910 [12 Cal.Rptr.3d 262, 88 P.3d 1]... 18, 19 Finn vy, G. D. Searle & Co. (1984) 35 Cal.3d 691 [200 Cal.Rptr. 870, 677 P.2d 1147]...ee 18 —ili— Flynn v. American Home Products Corp. (Minn. Ct. App. 2001) 627 N.W.2d 342...eectseecseeeensereeseeeeensenes 7 Foster v. American Home Products Corp. (4th Cir. 1994) 29 F.3d 165ecccseccsessssscsssseesesesscseescnseeeessecnsesees 6 Goldych vy. Eli Lilly & Co. (N.D.N.Y., July 19, 2006, No. 5:04CV1477(GLS/GJD)) 2006 WL 2038436 ......eccescesscesecssceseceeceeeeeecsecseeeeeeteatesetacsaesessaeeaseaaeeaens 7 Huck v. Wyeth, Inc. (lowa 2014) 850 N.W.2d 353 oececescesessseseceeeneceescrerieeserseseesenseees 16 In re Darvocet, Darvon, & Propoxyphene ProductLiability Litigation (6th Cir. 2014) 756 F.3d 917...ccceeseescssessceeeeseseesseeeneees 16 Lyman v. Pfizer, Inc. (D. Vt., July 20, 2012, No. 2:09-CV-262) 2012 WL 2970627 ....cesccsccescssscsssecssecssessescecceceesnessceseeeaeeascceeesseceeceateastenaseseaesaseasegs 24 Mason y., SmithKline Beecham Corp. (7th Cir. 2010) 596 F.3d 387 occceceeesceseeseceserscssersesaseeeseesesseeeseeses 19 Neeley v. Wolters Kluwer Health, Inc. (E.D. Ky. 2015) 311 F.R.D. 427 occceeeseeceeeesceecreeseeseneeeeseseeetaees 6, 7 Nicely v. Wyeth, Inc. (Mo.Ct. App. 2014) 451 S.W.3d 694.0eeeeereseseseeseeeseeeseeseeeeneens 24 Rafferty v. Merck & Co., Inc. (Mass. Super., May 23, 2016, No. 2013-04459) 2016 WL 3064255... eeecccceccsceteesecececsenssceeseeececenenececenscesecestesescsaesesseaesesseceasearassesees 7 Riegel v. Medtronic, Inc. (2008) 552 U.S. 312.eeeseesecseceeseecseeseeeeeseseeeesteeseesesseseesseeeeeeseeneasens 17 Robinson v. McNeil Consumer Healthcare (7th Cir. 2010) 615 F.3d 861 weeee csecesceseessesesserseseeessesseecesessseeesens 18 Rossi v. Hoffmann-LaRoche (N.J. Sup. Ct. Jan. 3, 2007, No. ATL-L690-05) 2007 WL TOS2318 ..cceccscescessessesseessesecsseseessecseceecesceeseesesaseaeenenseaseeeacesesseeesaeensaseees 16 _iv— Sloan v. Wyeth (N.J. Sup. Ct. Oct. 13, 2004, No. MRS-L-1183-04) 2004 WL, 5767103 oo... eeeeeececessceecetsceeeseesecescecsaceesaeesceecesceseeseseeeseeseseeseneens 15, 16 Stanley v. Wyeth, Inc. (La. Ct. App. 2008) 991 S0.2d 31oeeseeeseeeseceeeecsaeeeseeesseesseeeaeens 7 Thomas v. Hoffman-LaRoche, Inc. (Sth Cir. 1992) 949 F.2d 806 0...ee eeeceseessetsessescessenersneeseecssesseecneeneenees 18 Tsavaris v. Pfizer, Inc. (S.D. Fla. 2016) 154 F.Supp.3d 1327, 1339-41 ooeeeeceeeeneeeeeeeees 6 Warner Construction Corp. v. City ofLos Angeles (1970) 2 Cal.3d 285 [85 Cal.Rptr. 444, 466 P.2d 996]...eeeeeee 23 Wyeth, Inc. v. Weeks (Ala. 2014) 159 S0.3d 649.eeceecesecneeeeetsesesecenteeesesaeessesseteseeneenees 25 Statutes 21 ULS.C. § 332 oo eecceccecseesseseeeeececeeeessceceeeeeeaeeeaeenesaeeeeesacessaeeeeaeessaeetseeensens 21 21 U.S.C. §.333 cecceccsccsscccsecseeseesscseeessceeaecnesscessceesseesessessaeceneesseceasenseneteees 21 21 ULS.C. § 334ee cecscecscecseesscseceeserecaeeceaereeeeceseeecseseeesaeessaeeesaaessaeeeeneneens 21 21 ULS.C. § 352 eecccesceesscetessessecseeeeeeeaeeeaecseeeseeeseeetseeseesecseeeaaesseeseneentes 20, 21 21 U.S.C. $355 cececccssesccesesaceecesceeseseeeeeseecsaecaesseeecseeseeeaseeaeseaeesaeeees Passim 35 ULS.C. § 156eee eecsscccnessecsseseeessseaeesnessesesesenesscnessseasensseseseaseaeassaveeeateas 10 Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417 (Sept. 24, 1984) 98 Stat. 1585 woe4 National Childhood Vaccine Injury Act of 1986, Pub. L. No. 99-660 (Nov. 14, 1986) 100 Stat. 3743oeeseecseeseeeeeseeeeeeteeeeeees 13 Other Authorities 21 CLF.R. § 201.57.eeecececscesseenscenerseecesenecesecaesesesasesseerseneasneseateas 20, 21 21 CLF.R. § 312.20...eeeeccesccsseesceescesceeseteneesceeaececsecsesseesaeeeeseaessaesaesessecanes 2 21 CAFR. § 312.21eececscseccseceeesneceesesseesensceeeatessaeerecuersenesceatenesaeeaes 2 21 CER. § 312.23cececece sesseeesseeceseessseesssseesesseescnseeseeseeeseeessasonaseess 2 21 CER. § 314.70cccccsscscsssssssssessesssssssssesssssessssssssssssnsessssssssecssseecessnvesses 20, 24 21 COFLR. § 314.80..ccccccssssecsssscssssesssssssssescssecscsssssveesesssssesssssusesseesssescssssnsnsevess 3 QL CR. § 314.8. icccecccsssssessscssssucscsssssssvecesecesssssevecssssveesssssuversvesssusesssnasssseecs 3 21 CORR. § 314.92. .cccccsssssccsssccsssucsesssssssessssesessssseesesessssvsssessuessuessseesisnnsnseess 5 44 Fed. Reg. 37434 (June 26, 1979)...cccccssssesscssssssssssssssesssssseessneessseeessssssen 19 57 Fed. Reg. 17950 (April 28, 1992) ...sccccsssssssssssssssessssssesssssecssevessseeeees 5, 10 72 Fed. Reg. 39629 (July 19, 2007) ..cscccscssssssssssssssssssssssssssessssesessseeessesssee 24 73 Fed. Reg. 49603 (Aug. 22, 2008) ....cccccssssscsssssssssessssssessssseesssesssseee 18, 19 150 Cong. Rec. $8657-01 (daily ed. July 22, 2004)...eescsssseessecssssssesen 19 Bernstein, The Breast Implant Fiasco (1999) 87 Cal. L.Rev. AT vecccesccssccsssccsssscccescssessessessessecsceseesccusceeseecsecasecessecseceeeeaeeneaeceaaeeeseeatieees 11 Brief for the United States as Amicus Curiae Supporting Petitioner, Wyeth v. Levine (2009) 555 U.S. 555 (No. 06- 1249) .....ee eeceeesseresseeeeceesesesseesaasosssesoeesasneens 12 _vi- Dukeet al., A Quantitative Analysis ofAdverse Events and “Overwarning” in Drug Labeling (2011) 171 Archives of Internal Med. 944, 945 .......cccsscscsseseseeeseeeneeeeenens 19 Epstein, Legal Liabilityfor Medical Innovation (1987) 8 Cardozo L.Rev. 1139 .cccccccccccsssccecssecceseseccetseeeetsaeeeseeesssetessseees 11,18 Food & Drug Administration, FDA Approves Diclegisfor Pregnant Women Experiencing Nausea and Vomiting (Apr. 8, 2013) ........ceceeee 11 Food & Drug Administration, Reports Received and Reports Entered into FAERS by Year (2015) 0.eeeeeseeeeeees 3 Grabowski, Updated Trends in US Brand-Name and Generic Drug Competition (2016) 19 J. Med. Econ. 836 .......cceceeseseneeseereeees 5 H.R.Rep. No. 86-1861, 2d Sess., p. 2837 (1960), reprinted in 1960 U.S. Code Cong. & Admin. News, p. 2833.0... eeeeeeseeeseeneeserees 18 H.R.Rep. No. 98-857,pt. 1, 2d Sess., p. 14 (1984), reprinted in 1984 U.S. Code Cong. & Admin. News, p. 2647.0... eeceseeseeens 4,10 H.R. Rep. No. 99-908,2d. Sess., p. 7 (1986), reprinted in 1986 U.S. Code Cong. & Admin. News,p. 6344.0... ceceesesseesenees 13, 14 Koopman, Hidden Risks ofTaking Generic Drugs over Brand Name: The Impact ofDrug Labeling Regulations on Injured Consumers and the Pharmaceutical Industry (2014) 34 J. Nat’ Ass’n Admin. L. Judiciary 112 wo.ceeeseeeees 16 Laakmann, The Hatch-Waxman Act's Side Effects: Precautionsfor Biosimilars (2014) 47 Loyola L.A. L.Rev. QD Toe eecceesccesssesseencecesesseeesececsaceeeesaeessesseseaeseeseeteeesesesssseesaceaeseaaassessecseseaneees 16 Letter from Janet Woodcock, Director, Center for Drug Evaluation and Research, Food and Drug Administration, to James P. Reichmann (Feb. 17, 2011) ....eceesceeccssessecsseesececceseetsenecerersesssessesscesecaeeeasaeaseasaaeegs 8 —Vii- Mannix & Gaba, Acquiring Pharmaceutical or Medical Device Manufacturers: Due Diligence and Risk Reduction Strategies, Practical L.J. (Sept. 2012) ........ceee 22 National Research Council, Committee on Contraceptive Development, & Institute of Medicine, Division of International Health, Developing New Contraceptives (1990) ...0..ee eeeeeeeeseeeeseteetetseeasenees 12 Noah, Adding Insult to Injury: Payingfor Harms Caused by a Competitor ’s Copycat Product (2010) 45 Tort Trial & Ins. Prac. L.J. 673 ecccecesssessessnecetsecencceceescersnecenseseeceeestsaseceeeeessensersesenesates 16 Noah,Triage in the Nation’s Medicine Cabinet: The Puzzling Scarcity of Vaccines and Other Drugs (2003) 54 S.C. L.Rev. 741 oo. eeecceesssesssesseceeeescescescecseesseeesssenesaneensenseesaceseneesnaeenseesas 11, 14 Nuangchamnong & Niebyl, Doxylamine Succinate— Pyridoxine Hydrochloride (Diclegis)for the Management ofNausea and Vomiting in Pregnancy: An Overview (2014) Int’] J. Women’s Health 401 oo...eeeee eeeeeeseceeeeeeeeeeeeeenetseeneenaes 12 PhRMA,2016 Profile: Biopharmaceutical Research Industry (2016) 0steeseesseeeeneeeneenees Passim PhRMA,Annual Membership Survey (2015) oo...ceseeeeeteeteeeee 4 PhRMA,Biopharmaceutical Research & Development: The Process Behind New Medicines (2015) oo... esescsecsssessessceseseeseecsseseeesseasseaseneeeees 2 —Vvili— PhRMA,Biopharmaceuticals in Perspective: Spring 2016 (2016) ...........::06 Passim Press Release, Impax Receives FDA Approval to Market Terbutaline Sulfate Tablets (Jane 27, 2001) oeceeessseccsseetseeseesseesseeseaeesneeees 24 Press Release, Novartis Divests Brethine in US (Dec. 13, 2001) oo. eccccssssssccesessesssessesesseeseeesneeaes 24 S. Rep. No. 104-69, Ist Sess., p. 7 (1995)... cccccscsseccssseceseesseessseeeeseeesseens 13 Sanders, From Science to Evidence: The Testimony on Causation in the Bendectin Cases (1993) 46 Stan. L.ReV. Lovee eeeseesetsceesceseceesceeeeeeeaceeaecaessaesaeeeececeseseseseaseaseceneseenenasensee 11 Schmit, More Drugs Get Slapped with Lawsuits (Aug. 23, 2006) USA Today 00... eeeeesecseeseeeeeesereeeeeeeeeeeees 6 Schwartz et al., Warning: Shifting Liability to Manufacturers ofBrand-Name Medicines When the Harm WasAllegedly Caused by Generic Drugs Has Severe Side Effects (2013) 81 Fordham L. Rev. 1835 wo... ccccscccssscessseccccesssrscesseseceseees 15, 16, 21 Steenburg, The Food and Drug Administration’s Use of Postmarketing (Phase IV) Study Requirements: Exception to the Rule? (2006) 61 Food & Drug L.J. 295 .o..ccccccesseesscesseesneesneeseeees 4 Sugarman, Cases in Vaccine Court — Legal Battles Over Vaccines and Autism (2007) 357 N. Eng. J. Med. 1275 .....ceccescesseerees 13 U.S. Department of Health and Human Services, Guidance for Industry: Safety Labeling Changes — Implementation ofSection 505(0)(4) ofthe FD&C Act (2013) oseeeesecccescecsseecscecssceeeesecsseeeaseecesceessesseeseseseeesueseetenes 20 ~ix- U.S. Department of Health and HumanServices, Office of Science and Data Policy, Expanding Use ofGeneric Drugs (2010) . oceeeecesecessenseeeseesersssseceerssssesseseeeeseseesssesensesenaees 5 U.S. Departmentof Justice, Abbott Labs to Pay $1.5 Billion to Resolve Criminal & Civil Investigations ofOff-label Promotion ofDepakote (May 7, 2012) oo... ccceceeesessessesesscseeeesseeescensesseesseeseneeees 9 U.S. Departmentof Justice, Endo Pharmaceuticals and Endo Health Solutions to Pay $192.7 Million to Resolve Criminal and Civil Liability Relating to Marketing of Prescription Drug Lidodermfor Unapproved Uses (Feb. 21, 2014) 2.0.0... ee ee eeesseseseeseenseeesseneees 9 U.S. Departmentof Justice, U.S. Pharmaceutical Company Merck Sharp & Dohmeto Pay Nearly One Billion Dollars Over Promotion of Vioxx® (Nov. 22, 2011) occcesssecessccessecenseseeceessecenesseenseeesseseeessaes 9 U.S. Departmentof Justice, Wyeth Pharmaceuticals Agrees to Pay $490.9 Millionfor Marketing the Prescription Drug Rapamunefor Unapproved Uses (July 30, 2013) oeeeeeessceesescesssssesseessecseessesseeseessssessesseseesaeees 9 U.S. Judicial Panel on Multidistrict Litigation, Calendar Year Statistics: January Through December 2015 .......cccccccseeeseeesseeseeeesees 6 Viscusi et al., A Statistical Profile ofPharmaceutical Industry Liability, 1976-1989 (1994) 24 Seton Hall L.Rev. 1418.0... 11 Wheeler, Due Diligence in Life Sciences Mergers and Acquisitions, Lexis Practice Advisor J. (Nov. 30, 2015) ......eeeeeeeeeceesseceeeeteeceersueceaceceeecceaeeeneesseseesseseseeenaeenaeee 21 Willett, Litigation as an Alternative to Regulation: Problems Created by Follow-on Lawsuits with Multiple Outcomes (2005) 18 Geo. J. Legal Ethics 1477 oo. eeccesssccssseseetsesseesseeteessereenaes 13 _xi- SUMMARYOF ARGUMENT Plaintiffs seek to hold Novartis responsible for the alleged injuries of a child whose mother ingested a generic version of its former brand-name medicine Brethine, notwithstanding that Plaintiffs’ mother never took the brand-nameversion of Brethine and that Novartis had stopped marketing Brethine many yearsearlier. In allowing their claims to proceed, the Court ofAppeal embraced several outlier theories that, in addition to being inherently unfair, carry significant public health implications. Faced with uncertain and unlimited liability tethered neither to their own products nor to their financial returns, brand-name companies whoface potential liability for alleged injuries sustained while using generic copies of their products years after leaving the market may be forced to cabin thatliability in at least two waysthat will frustrate the aims of the federal regulatory scheme governing pharmaceuticals and harm public health. First, by subjecting the companies engaged in innovationto liability that bears norelation to their products or revenues(andthat instead follows directly from the measure by which their revenues are reduced by generic competition), the Court of Appeal’s holding substantially disrupts innovators’ ability to recapture investments and shrinks the resources that can be invested in future innovation. Second, by creating a remarkable risk profile for brand-name companies, the Court of Appeal’s decision encourages companies to prophylactically warn of every conceivable risk, which in turn could erode the meaningfulness ofscientifically-justified warnings and deter beneficial uses of medications. In light of these significant public health concerns, the Court of Appeal’s decision should be reversed. ARGUMENT I. The Costs of Researching and Developing Innovative Medicines Are Borne Almost Entirely by Brand-Name Companies A. Innovator Companies Invest Immense Resourcesin Researching and Developing New Medicines Bringing a new medicine to market is a lengthy and expensive process. Before studying a new medicine in humans, a pharmaceutical company must conduct a series of laboratory and animalstudies to test how the medicine works andassessits safety. (21 C.F.R. § 312.23(a)(8).) Ifthe results are promising, the company submits an Investigational New Drug application (“IND”) to the FDA, outlining the preclinical study results and offering a plan for clinical tnals in humans. (21 U.S.C. § 355()(2); 21 C.F.R. § 312.20(a)-(b).) Upon FDA approval of the IND, the company conducts three phasesofclinicaltrials, each of which must be completed successfully before the potential new medicine may undergo FDA review and approval. (21 C.F.R. § 312.21.) On average,the clinical trial phase takes six to seven years to complete. (PhRMA, Biopharmaceutical Research & Development: The Process Behind New Medicines (2015) p. 10 .) If clinical trial results show that the medicine’s benefits outweighits risks, the sponsoring company can seek the FDA’s approval to market the medicine by submitting a New Drug Application (“NDA”). (21 U.S.C. § 355(b).) The NDA,which must contain, among other things,the results of the clinical and pre-clinical testing, proposals for manufacturing, and proposedlabeling for the new medicine (21 U.S.C § 355(b)(1)), often exceeds 100,000 pages in length (PhRMA, Biopharmaceutical Research & Development, supra, at p. 14). Innovative companies undertake this process at tremendous expense and risk. On average, developing and obtaining FDA approval of a new medicine takes ten to fifteen years and costs $2.6 billion. (PhRMA, 2016 2- Profile: Biopharmaceutical Research Industry (2016) p. il .) Pharmaceutical companies spend even more money developing compoundsthat are never approved: just one out of every 5,000 to 10,000 compounds under development, and just one out of every eight medicines entering clinical trials, obtains FDA approval. ([bid.; PhRMA, Biopharmaceutical Research & Development, supra, at p. 10; see also PARMA,2016 Profile, supra, at p. 36 [reporting that in 2013, pharmaceutical companies sponsored 6,199 clinical trials involving 1.1 million participants].) PhRMA’s member companiesinvest approximately one quarter of their total annual domestic sales on research and development — an estimated $58.8 billion in 2015. (/bid.) These costs do not end with approval. Once a new medicineis brought to market, NDA holders are required to monitor, review, and report to the FDAall adverse events received from any source, “including information derived from commercial marketing experience, postmarketing clinical investigations, postmarketing epidemiological/surveillance studies, reports in the scientific literature, and unpublished scientific papers.” (21 C.F.R. § 314.80(b); see also Food & Drug Administration, Reports Received and Reports Entered into FAERSby Year (2015) [stating that the FDA received over 1.2 million adverse event reports from pharmaceutical companies in 2014].) NDA holders must also submit to the FDA annual reports summarizing all information received about their medicines, including adverse drug events andclinicaltrial results. (21 C.F.R. § 314.81(b)(2).) Apart from adverse-event reporting, the FDA frequently requires NDAholders to undertake additional clinical studies after approval. (See 3- 21 U.S.C. § 355(0)(3).) According to one estimate, more than three quarters of all new medicine approvals are accompanied by a commitment by the sponsor to conduct one or more post-marketing, or “Phase IV,” studies. (Steenburg, The Food and Drug Administration’s Use of Postmarketing (Phase IV) Study Requirements: Exception to the Rule? (2006) 61 Food & Drug L.J. 295, 300.) PhRMA’s member companies spend more than $7.5 billion annually conducting these studies. (PhRMA, Annual Membership Survey (2015) p. 6 table 4 .) B. The Hatch-Waxman Amendments Enable Generic Manufacturers to Copy Innovative Medicines at Minimal Expense Prior to the passage of the Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. No. 98-417 (Sept. 24, 1984) 98 Stat. 1585), commonly knownas the Hatch-Waxman Amendments,virtually all companies were required to conductpre-clinical and clinicaltrials as a prerequisite to obtaining the FDA’s approval to market a medicine. Recognizing that this procedure wasa hindranceto the launch of generic medicines — in 1984, approximately 150 medicines with expired patents lacked generic competition — Congress amended the FDA approval process to “make available more low cost generic drugs.” (H.R. Rep. No. 98-857, pt. 1, 2d Sess., p. 14 (1984), reprinted in 1984 U.S. Code Cong. & Admin. News, p. 2647.) The Hatch-Waxman Amendmentsleft in place the multi-step approval process for innovative new medicines,butit streamlined that processfor generic versions of those medicines. Under Hatch-Waxman,a company may seek approval to market a generic medicinebyfiling an abbreviated new drug application (“ANDA”) demonstrating that the generic version is biologically equivalent to an already-approved medicine. (21 —4- U.S.C. § 355G)(2)(A)(iv); 21 C.F.R. § 314.92(a)(1).) An ANDAapplicant need not independently perform extensive and costly studies to prove that the generic is safe and effective; instead, it can rely on “a prior agency finding of safety and effectiveness based on the evidence presentedin [the] previously approved new drug application.” (57 Fed. Reg. 17950, 17953 (April 28, 1992).)' Dueto these streamlined procedures, researching and developing a generic version of an FDA-approved medicine costs under $2 million today — less than one-tenth of one percent of the cost of developing the innovative medicineitself. (U.S.Department of Health and Human Services, Office of Science and Data Policy, Expanding Use ofGeneric Drugs (2010) pp. 4-5 .) Generic manufacturers pass these cost savings onto consumers. (See PhRMA,Biopharmaceuticals in Perspective: Spring 2016 (2016)p. 54 .) Il. The Duties Created by the Court of Appeal Would Expose Brand-Name Companies to Limitless Liability Plaintiffs take great pains to portray this case as unique. In truth, there is nothing particularly unusual about the allegations presented here. After generic entry, the market share of generic copies of medicines dwarfs the brand’s market share. (See, e.g., Grabowski, Updated Trends in US Brand-Name and Generic Drug Competition (2016) 19 J. Med. Econ. 836 [reporting that for brand medicines facing generic entry in 2013-2014, generics captured an average of 93 percent of the market (by volume) " Becausea generic medicine mustcontain “the same”active ingredient(s), delivered in “the same” dosage form, strength, and route of administration, in a formulation that is bioequivalent to an approved brand-name medicine, it must bear identical warnings. (28 U.S.C. § 355G)(2)(A)(ii)-(v).) _5— within the first year].) If allowed to stand, the Court of Appeal’s decision will expose brand-name manufacturersto virtually unlimited liability for injuries allegedly sustained while using generic versions of their current and former branded products. The scope oflitigation against pharmaceutical companiesis immense. Between 2000 and 2006, more than 65,000 productliability lawsuits were filed against pharmaceutical companies. (See Schmit, More Drugs Get Slapped with Lawsuits (Aug. 23, 2006) USA Today .) And as of last year, one quarter of all pending multidistrict litigation proceedings involved productliability claims, the majority involving medicines or medical devices. (See U.S. Judicial Panel on Multidistrict Litigation, Calendar Year Statistics: January Through December2015, p. 11 .) Lawsuits seeking to impose innovatorliability on brand-name pharmaceutical companies already numberin the thousands. (See Neeley v. Wolters Kluwer Health, Inc. (E.D. Ky. 2015) 311 F.R.D. 427, 429 [noting that “thousands” of cases have beenfiled against “against various generic and brand-name companies responsible for manufacturing Reglan®/metoclopramide”].) Courts have ruled on this issue in lawsuits involving treatments for allergic reactions, asthma, bacterial infections, cardiac arrhythmias, depression, enlarged prostate, heartburn, insomnia, menopausal symptoms, migraine headaches, obesity, and panic disorder, to namejust a few.” Cases seeking to hold brand-name companiesliable * See, e.g., Foster v. American Home Products Corp. (4th Cir. 1994) 29 F.3d 165, 168-71 [Phenergan (promethazine hydrochloride)]; Tsavarisv. Pfizer, Inc. (S.D. Fla. 2016) 154 F.Supp.3d 1327, 1339-41 [Activella (continued...) 6- under a theory of innovatorliability persist, even though the concept has been rejected by the overwhelming majority of courts that have considered it. (See Opening Brief on the Merits pp. 32-33.) Should innovatorliability gain acceptance, the number of lawsuits would multiply exponentially. A creative advocate can always sketch out a scenario where someaction (or inaction) by the brand-name company years earlier could impact the subsequentgeneric labeling. Thereis virtually no limiting principle to this “butterfly effect” rational endorsed by the Court of Appeal, as clever lawyers can trace almost any safety issue back to the original brand holder, given the overwhelming amount ofsafety data the innovator company amassesover the decades of development and marketing of a medicine before generic entry. Lawyers can almost always make incendiaryallegations of “off-label” promotion for unapproved uses, to conceive of new or stronger warningsthat they allege companies should have addedto their labeling, or to claim in hindsight that existing warnings should have been added sooner. (See, e.g., Brief for the United States as (estradiol/norethindrone acetate)]; Neeley v. Wolters Kluwer Health, Inc., supra, 311 F.R.D. 427, 432-34 [Reglan (metoclopramide)]; Anselmo v. Sanofi-Aventis Inc, USA (Kan. Dist. Ct., Oct. 13, 2014, No. 10-CV-77) 2014 WL 8849464,at *1 [Ambien (zolpidem)]; Barnhill v. Teva Pharmaceuticals USA, Inc. (S.D. Ala., Apr. 24, 2007, No. CIV A 06-0282- CB-M) 2007 WL 5787186, at *2 [Keflex (cephalexin)]; Goldych v. Eli Lilly & Co. (N.D.N.Y., July 19, 2006, No. 5:04CV1477(GLS/GJD)) 2006 WL 2038436, at *3—8 [Prozac (fluoxetine)]; Colacicco v. Apotex, Inc. (E.D. Pa. 2006) 432 F.Supp.2d 514, 539-43 [Paxil (paroxetine)]; DaCosta v. Novartis AG (D. Or., Mar. 1, 2002, No. CV 01-800-BR) 2002 WL 31957424, at *8—9 [Migranal(ergot alkaloid)]; Rafferty v. Merck & Co., Inc. (Mass. Super., May 23, 2016, No. 2013-04459) 2016 WL 3064255,at *4-6 [Proscar (finasteride)]; Stanley v. Wyeth, Inc. (La. Ct. App. 2008) 991 So.2d 31, 33-35 [Cordarone (amiodarone)]; Flynn v. American Home Products Corp. (Minn. Ct. App. 2001) 627 N.W.2d 342, 350-52 [Pondimin (fenfluramine)]. Amicus Curiae Supporting Petitioner p. 25, Wyeth v. Levine (2009) 555 U.S. 555 (No. 06-1249) [noting the “post hoc imagination of lawyers” in pursuing pharmaceutical lawsuits challenging safety labeling].) And because nine out of every ten U.S. prescriptions are filled with generics, the numberofpotential plaintiffs is enormous. (PhRMA, 2016 Profile, supra,at p.ii). Asthis case demonstrates, a broad interpretation of such allegations can permit even the most outlandish claims to survive demurrer, forcing companies to expend significant resources and years in discovery to fend off frivolous claims. For example, Plaintiffs claim that Novartis failed to warn of the “serious side effects on newborns whose mothers consumed Terbutaline while pregnant” (AA016-58, at 130), notwithstanding that more than three years after T.H.’s mother ingested terbutaline, the FDA concludedthat “the available human data regarding an association between terbutaline sulfate and autism” — the specific disorder from which T.H. allegedly suffers — “are not sufficient to concludethat there is ‘positive evidence of human fetal risk.’” (Letter from Janet Woodcock, Director, Center for Drug Evaluation and Research, Food and Drug Administration, to James P. Reichmann (Feb. 17, 2011) p. 13 .) Plaintiffs further complain that Novartis “aggressively marketed” Brethine for an off-label use (AnswerBrief on the Merits p. 12), notwithstanding that the FDA has never challenged Novartis’s marketing of Brethine.° 3 While Plaintiffs contend that off-label promotion “goes dramatically under-regulated by the FDA” (AnswerBrief on the Merits p. 40), the truth of the matter is that the federal governmentandstate attorneys general (continued...) _3— Indeed,the allegations that Plaintiffs claim make this case unique — that (1) the medicine at issue causesa serious injury, (2) the manufacturer knew or should have knownofthe risk but failed to warn about it on its labeling, and (3) the former manufacturer knew or should have knownthat uponselling the rights to market the medicine, the purchaser would not update the medicine’s labeling (AnswerBrief on the Merits p. 61) — are hardly rare. The first two “unusualfacts” are essential elements of any negligent failure-to-warn claim. (See, e.g., Chavez v. Glock, Inc. (2012) 207 Cal.App.4th 1283, 1304-05 [144 Cal.Rptr.3d 326, 345].) And Plaintiffs’ brief makes little attempt to conceal their belief that every former manufacturer should anticipate that the purchaser will not update the medicine’s labeling, because warnings might temper future sales. (See AnswerBrief on the Merits p. 61.) Indeed, even Plaintiffs admit that the actively investigate such allegations, which have resulted in many high- profile cases against pharmaceutical companiesin recent years. (See,e.g., U.S. Department of Justice, Endo Pharmaceuticals and Endo Health Solutions to Pay $192.7 Million to Resolve Criminal and Civil Liability Relating to Marketing ofPrescription Drug Lidodermfor Unapproved Uses (Feb. 21, 2014) ; U.S. Department of Justice, Wyeth Pharmaceuticals Agrees to Pay $490.9 Millionfor Marketing the Prescription Drug Rapamunefor Unapproved Uses (July 30, 2013) ; U.S. Department of Justice, Abbott Labs to Pay $1.5 Billion to Resolve Criminal & Civil Investigations ofOff-label Promotion ofDepakote (May 7, 2012) ; U.S. Department of Justice, U.S. Pharmaceutical Company Merck Sharp & Dohme to Pay Nearly One Billion Dollars Over Promotion of Vioxx® (Nov. 22, 2011) .) _9- Court of Appeal’s holding affects “hundreds, perhaps thousands”of potential claimants. (/d. at p. 68). If. The Court of Appeal’s Massive Expansion of Tort Liability Will Harm Innovation Shifting liability to innovators for injuries allegedly sustained by individuals who ingest generic manufacturers’ products is likely to chill innovation and impair public health. When a company is exposed to liability that bears no relationship to its products, sales, or revenue,it is both prevented from recapturing its research and development investment in that medicine and discouraged from making future investments. Such a result not only underminesthe purposes of the Hatch-Waxman Amendments, which “careful[ly] balance” the interest in lower-cost medicines against the need to “encourag[e] research and innovation”(57 Fed. Reg. 17950, 17951 (April 28, 1992)),* but is also incompatible with California’s established public policy, which “favors the development and marketing ofbeneficial new drugs” (Brown v. Superior Court (1988) 44 Cal.3d 1049, 1063 [245 Cal.Rptr. 412, 420, 751 P.2d 470, 479]). The Court should decline to contort basic tort principles in such a manner. (See Cabral v. Ralphs Grocery Co. (2011) 51 Cal.4th 764, 782 [122 Cal.Rptr.3d 313, 327, 248 P.3d 1170, 1182] [holding that “the undesirable * See also H.R. Rep. No. 98-857, supra, at p. 15 [The purposeofTitle II of the bill is to create a new incentive for increased expenditures for research and developmentof certain products which are subject to premarket government approval.”]. To encourage brand-name companiesto continue engaging in research and developmentin the face of greater competition from lower-priced generics, the Hatch-Waxman Amendmentsrestore up to five years of the patentlife lost during clinical testing and NDAreview. (See 35 U.S.C. § 156(a), (c), (g)(6)(A).) Extending the period of market exclusivity allows companiesthat bring innovative medicines to market to begin to earn back their research and developmentcosts. —10-— consequencesof allowing potential liability” are a key consideration in deciding whether to imposea tort duty].) Given the enormouscosts associated with researching and developing a new medicine,the scope oflitigation risk bears heavily on a company’s decision to invest in innovation. (See Brown v. Superior Court, supra, 44 Cal.3d 1049, 1065 n.10 [recognizing the “connection between the cost and availability of pharmaceuticals and theliability imposed on their manufacturers for injuries”]; Viscusi et al., A Statistical Profile of Pharmaceutical Industry Liability, 1976-1989 (1994) 24 Seton Hall L.Rev. 1418, 1419 [“[T]he net effect of the surge in liability costs ha[s] been to discourage innovation in the pharmaceutical industry.”]; Epstein, Legal Liabilityfor Medical Innovation (1987) 8 Cardozo L.Rev. 1139, 1153-54 [“If in the aggregate the net gains are wiped outbytheliability costs, then the product will no longer be made.”].) The anti-nausea drug Bendectin, used to treat severe morning sickness in pregnant women,illustrates why. After Bendectin was named as the cause of birth defects in thousands of lawsuits, its manufacturer withdrew the medicine from the market in 1983, only later to be vindicated by scientific studies showing that Bendectin posednorisks to either mothers or fetuses. (See Bernstein, The Breast Implant Fiasco (1999) 87 Cal. L.Rev. 457, 460; Noah, Triage in the Nation’s Medicine Cabinet: The Puzzling Scarcity of Vaccines and Other Drugs (2003) 54 S.C. L.Rev. 741, 760-61; Sanders, From Science to Evidence: The Testimony on Causation in the Bendectin Cases (1993) 46 Stan. L.Rev. 1, 7; Brent, Medical, Social, and Legal Implications ofTreating Nausea and Vomiting ofPregnancy (2002) 186 Am.J. Obstetrics & Gynecology $262, S262—63.) In 2013, after nearly thirty years off the market, Bendectin returned under a new name. (See Food & Drug Administration, FDA Approves Diclegisfor Pregnant Women Experiencing Nausea and Vomiting (Apr. 8, 2013) —{1- .) In the interim, however, hospital admissions for excessive vomiting during pregnancy had doubled, costing the U.S. economy$1.7 billion annually in time lost from work, caregiver time, and hospital expenses. (See Nuangchamnong & Niebyl, Doxylamine Succinate—Pyridoxine Hydrochloride (Diclegis)for the Management of Nausea and Vomiting in Pregnancy: An Overview (2014) Int’] J. Women’s Health 401, 401-02 .) Similarly, by 1990, eight of the nine major U.S. pharmaceutical companies that had been involved in researching and developing new contraceptives had abandonedtheir efforts. (National Research Council, Committee on Contraceptive Development, & Institute of Medicine, Division of International Health, Developing New Contraceptives (1990) p. 59 .) According to the National Research Council and the Institute of Medicine, “recent productsliability litigation and the impact ofthat litigation on the cost and availability ofliability insurance have contributed significantly to the climate of disincentives for the developmentof contraceptive products.” (/d. at p. 141.) In 1989, the inventorof the birth control pill, Carl Djerassi, recommended changesto the productliability regime, commenting that “the United States is the only country other than Iran in which the birth control clock has been set backward during the past decade.” (Djerassi, The Future ofBirth Control (Sept. 10, 1989) Wash. Post .) The executive director of the Society for the Advancement ofWomen’s Health Research similarly testified before Congress that “the current liability climate is preventing _12- women from receiving the full benefits that science and medicine can provide.” (S. Rep. No. 104-69, Ist Sess., p. 7 (1995).) The country’s experience with vaccinesisalso illustrative. Lawsuits in the late 1970s alleging that the whooping-cough componentof the DPT vaccine caused permanentbrain damageled nearly all of its manufacturers to cease production, resulting in nationwide shortages. (See Willett, Litigation as an Alternative to Regulation: Problems Created by Follow-on Lawsuits with Multiple Outcomes (2005) 18 Geo. J. Legal Ethics 1477, 1488 n.60; see also Brown v. Superior Court, supra, 44 Cal.3d 1049, 1064 {One producerof diphtheria-tetanus-pertussis vaccine withdrew from the market, giving as its reason ‘extremeliability exposure, cost oflitigation and the difficulty of continuing to obtain adequate insurance.’ [citation] There are only two manufacturers of the vaccine remaining in the market, and the cost of each dose rose a hundredfold from 11 cents in 1982 to $11.40 in 1986, $8 of which was for an insurancereserve.”].) Although the allegation that the DPT vaccine causes neurological harm was subsequently “discredited” (Sugarman, Cases in Vaccine Court — Legal Battles Over Vaccines and Autism (2007) 357 N. Eng. J. Med. 1275, 1276), by 1986, there was only one American manufacturer of the polio vaccine, one manufacturer of the measles, mumps,and rubella vaccine, and two manufacturers of the DPT vaccine (H.R. Rep. No. 99-908, 2d. Sess., p. 7 (1986), reprinted in 1986 U.S. Code Cong. & Admin. News,p. 6344). Congress, realizing the “inadequacy — from both the perspective of vaccine-injured persons as well as vaccine manufacturers — ofthe current approach to compensating those who have been damagedbya vaccine”(id. at p. 7), passed the National Childhood Vaccine Injury Act of 1986 (Pub.L. No. 99-660 (Nov. 14, 1986) 100 Stat. 3743), which removed many personal-injury cases involving vaccines from the state-law tort system. Congress hoped that once “manufacturers ha[d] a better sense oftheir _13— potential litigation obligations, a more stable childhood vaccine market w[ould] evolve.” (H.R. Rep. No. 99-908, supra, at p. 7.) And,in fact, the Act appears to have “succeededin stabilizing prices and stemmingfurther exit from the market” forlisted vaccines. (Noah, Triage in the Nation’s Medicine Cabinet, supra, at p. 761.) In short, the past 40 years have repeatedly demonstrated that dramatic increases in potential liability — particularly unpredictable, long- enduring liability — can drive biopharmaceutical companies to abandon the research and production of medicines, especially those that treat populationslike children and pregnant women wheretheliability risks are especially significant. (See, e.g., Brown v. Superior Court, supra, 44 Cal.3d 1049, 1063 [recognizing that “fear of large adverse monetary judgments” makes pharmaceutical companies“reluctant to undertake research programs to develop some pharmaceuticals that would prove beneficial”].) Yet the unpredictable liability that would follow from the theory of innovatorliability is worse by an order of magnitude:all of the examples discussed above took place in a legal landscape where companies were potentially liable for injuries to plaintiffs who used medicinesthat they themselves manufactured. Under the Court of Appeal’s logic, a brand- name company could be subjected to decadesofliability for a medicine manufactured by its competitor years after the innovative companystops earning anysignificant revenue from its innovation.” The impactofthis ° Plaintiffs insist that Carlin v. Superior Court (1996) 13 Cal.4th 1104 [56 Cal.Rptr.2d 162, 920 P.2d 1347] “rejected the argument that imposition of tort liability on brand-name manufacturers will deter innovation.” (Answer Brief on the Merits p. 45.) But Carlin’s careful balance — pharmaceutical companies could beheldstrictly liable for failing to warn of risks presented by their own products that were knownor reasonably knowable at the time of distribution, but not those that were unknown or unknowable — was designed to minimize the impactoftort liability on innovation. (See id. at (continued...) -14- unpredictable and potentially limitless liability on innovation, and correspondingly on public health, would be profound.° The biopharmaceutical industry funds nearly half of all U.S. biomedical research, accounting for the largest share of public or private funding. (PhRMA, Biopharmaceuticals in Perspective, supra, at p. 27.) Its investments have produced dozens of major scientific breakthroughs. For example, over the past two decades, innovative diagnostic techniques and treatments have reduced the death rate from cancer by 23 percent, saving over 1.5 million lives. (PhRMA,20/6 Profile, supra, at p. 9.) Innovations have reduced the death rates from heart disease and stroke by nearly40 percent compared to ten years ago. (/d. at pp. 7-8.) And innovative treatments for HIV/AIDShavecontributed to a nearly 87 percent decline in death rates since the mid-1990s, preventing over 862,000 premature deaths. (PhRMA,Biopharmaceuticals in Perspective, supra, at p. 8.) Without 1117.) Carlin hardly repudiates the importance of incentivizing innovation in the pharmaceutical industry or suggests that allowing an entirely new class of claims by users of another manufacturer’s medicine would not adversely impact innovation. ° Nor would innovatorliability increase consumeraccess to medicines. (See Brown v. Superior Court, supra, 44 Cal.3d 1049, 1063 [holding that “the broader public interest in the availability of drugs at an affordable price must be considered”in decidingliability standards]; Sloan v. Wyeth (N.J. Sup. Ct. Oct. 13, 2004, No. MRS-L-1183-04) 2004 WL 5767103 [rejecting innovator liability because it would not “advancethe affordably of drugs, one of the main policy foundations for the Hatch-Waxman amendments”’]; Schwartz et al., Warning: Shifting Liability to Manufacturers ofBrand-Name Medicines When the Harm WasAllegedly Caused by Generic Drugs Has Severe Side Effects (2013) 81 Fordham L. Rev. 1835, 1870 [“Saddling 10 percent of a market with 100 percent of its liability is certain to create new and significant financial pressures on brand-namedrugs,the effects of which would harm health care consumers.” —|5-— ongoing investments from pharmaceutical companies in research and development, none of these advances would have been possible. Numerousscholars and jurists have recognized that placing liability on innovator pharmaceutical companiesfor injuries allegedly sustained from the use of generic medicines would negatively impactinnovation.’ Plaintiffs nevertheless insist that there would be no impact on innovation because “brand-name drug companies make enormousprofits” prior to generic entry and would be loath to foregothis “enormousfinancial windfall.” (AnswerBrief on the Merits p. 46.) Plaintiffs’ assertion is ’ See In re Darvocet, Darvon, & Propoxyphene Product Liability Litigation (6th Cir. 2014) 756 F.3d 917, 945 [rejecting innovatorliability in light of the “grave health policy consequences”it presents, including “fewer innovative drugs”]; Huck v. Wyeth, Inc. (lowa 2014) 850 N.W.2d 353, 377 (plur. opn.) [“[E]xtending liability to brand manufacturers for harm caused by generic competitors would discourage investments necessary to develop new,beneficial drugs by increasing the downsiderisks.”]; Rossi v. Hoffmann-LaRoche (N.J. Sup. Ct. Jan. 3, 2007, No. ATL-L690-05) 2007 WL 7632318 [holding that innovator liability “could only act to stigmatize the ability of companies to develop new and innovative drugs”]; Sloanv. Wyeth, supra, 2004 WL 5767103 [“Brand name manufacturers would be less likely to develop new productsifliability were imposed upon these companies for injuries wrought by products of generic manufacturers.”]; Laakmann, The Hatch-Waxman Act's Side Effects: Precautionsfor Biosimilars (2014) 47 Loyola L.A. L.Rev. 917, 926 [innovatorliability “could further dampenthe incentives to create new drugs and thus reduce overall patient welfare”]; Noah, Adding Insult to Injury: Payingfor Harms Caused by a Competitor's Copycat Product (2010) 45 Tort Trial & Ins. Prac. L.J. 673, 688 n.69 [innovatorliability “threatens to chill therapeutic product innovation”]; Schwartz et. al., Warning, supra, at p. 1871 [innovatorliability makesit “riskier for brand-name manufacturersto dedicate resources to researching and developing potentially life-saving or life-improving medicines”]; Koopman, Hidden Risks of Taking Generic Drugs over Brand Name: The Impact ofDrug Labeling Regulations on Injured Consumers and the Pharmaceutical Industry (2014) 34 J. Nat’! Ass’n Admin. L. Judiciary 112, 140 [“Overall, innovator liability likely results in less new drug development.”’]. -16— divorced from today’s reality. Since 2000, the averagelifetime revenue for a new medicine has declined by overforty percent. (See PhRMA, Biopharmaceuticals in Perspective, supra, at p. 51.) Over a similar timeframe, the costs of researching and developing new medicines have more than doubled. (/d. at p. 34.) Consequently, four out of every five medicines today fail to earn enough revenue evento offset their up-front research and development costs. (PhRMA, 2016 Profile, supra, at p.ii.) Innovatorliability would shrink the numberofprofitable medicines even further. IV. Holding Brand-Name CompaniesLiable for Injuries Allegedly Sustained from Their Generic Competitors’ Products Will Impair the Usefulness of Pharmaceutical Labeling A. The Tort Duties Invented Below Encourage Companiesto Warnof Speculative and Hypothetical Risks Liability that includes not only a company’s own medicines, but also those manufactured by its generic competitors may additionally affect how companies seek to protect themselves. Becauseliability in pharmaceutical productliability cases hinges on whether a company’s labeling sufficiently warned ofpotential risks, companies looking ahead to the generic phase of a medicine’s lifespan may have no choice other than to “pile on warnings for every conceivable adverse reaction, no matter how remote the odds,” in order to protect themselves “from the 20/20 hindsightofjuries.” (Comment, Resolving Drug Manufacturer Liabilityfor Generic Drug Warning Label Defects (2015) 47 St. Mary’s L.J. 219, 238.)° * Limitless tort liability drives companies to add unnecessary warnings because lawsuits center on allegations that a warning was deficient in the context of an injured individual plaintiff. (See Riegel v. Medtronic, Inc. (2008) 552 U.S. 312, 325 [“A jury . . . sees only the cost of a more dangerous design, and is not concerned with its benefits; the patients who reaped those benefits are not represented in court.”]; Cotton v. Buckeye Gas (continued...) _17- This approach would harm consumers in two ways. First, physicians may disregard lengthy labelingthat is filled with speculative warnings, thereby overlooking important, scientifically-founded safety information. (See Dowhal v. SmithKline Beecham Consumer Healthcare (2004) 32 Cal.4th 910, 932 [12 Cal.Rptr.3d 262, 276, 88 P.3d 1, 13] [“‘Against the benefits that may be gained by a warning must be balanced the dangers of overwarning and of less meaningful warnings crowding out necessary 999 warnings ....’” (quoting Carlin v. Superior Court, supra, 13 Cal. 4th 1104, 1133) (conc. & dis. opn. of Kennard,J.)]; Finn v. G. D. Searle & Co. (1984) 35 Cal.3d 691, 701 [200 Cal.Rptr. 870, 876, 677 P.2d 1147, 1153] [“[I]Jnundat[ing] physicians indiscriminately with notice of any and every hint of danger . . . inevitably dilut[es] the force of any specific warning given.”]; see also, e.g., Robinson v. McNeil Consumer Healthcare (7th Cir. 2010) 615 F.3d 861, 869 [“Theresulting information overload [from describing every remote risk] would make label warnings worthless to consumers.”|; Thomas v. Hoffman-LaRoche, Inc. (Sth Cir. 1992) 949 F.2d 806, 816 n.40 [explaining that if warnings were cluttered with “every possible risk,” then “physicians [would] begin to ignore or discount the warnings”]; H.R. Rep. No. 86-1861, 2d Sess., p. 2837 (1960), reprinted in 1960 U.S. Code Cong. & Admin. News, p. 2833 [speculative warnings “invit[e] indifference to cautionary statements on packages of substances presenting a real hazard of substantial injury orillness’”]; 73 Fed. Reg. Prods. Co, (D.C. Cir. 1988) 840 F.2d 935, 937-38 [“Failure-to-warn cases have the curious property that, when the episode is examined in hindsight, it appears as though addition of warnings keyedto a particular accident would bevirtually cost free.”]; Epstein, Legal Liabilityfor Medical Innovation, supra, at p. 1150 [Once the outcome is known to be bad, some further warnings of adverse side effects must be good, given that it would discourage the unfortunate courseof action.”’].) _~]8- 49603, 49605—06 (Aug. 22, 2008) [unfounded statements in FDA labeling may cause “more important warnings” to be “overshadow[ed]”].) Warnings on pharmaceutical labeling are already extensive. The average packageinsert today lists 49 potential adverse events, and one out of every ten labels contains over 500 warnings. (Dukeetal., A Quantitative Analysis ofAdverse Events and “Overwarning” in Drug Labeling (2011) 171 Archives of Internal Med. 944, 945 .) Second, warningsthat are not groundedin science discourage the beneficial use of medicines. (See, e.g., Dowhal v. SmithKline Beecham ConsumerHealthcare, supra, 32 Cal.4th 910, 934 [“[A] truthful warning of an uncertain or remote danger may mislead the consumer into misjudging the dangers stemming from use of the product, and consequently making a medically unwise decision.”]; Mason v. SmithKline Beecham Corp. (7th Cir. 2010) 596 F.3d 387, 391-92 [“[O]verwarning can deter potentially beneficial uses of the drug by making it seem riskier than warranted . . . .”]; 73 Fed. Reg. 49603, supra, at pp. 49605—06 [‘[O]verwarning . . . may deter appropriate use of medical products ... .”].) All medicines have risks, and all prescribing decisions are based on a balancing ofthose risks against the medicine’s potential benefits. Overstating risk thus keeps physicians from making optimal prescribing decisions. The FDAhas long been aware of the dangers that overwarning presents. Since 1979, the agency hasstated that “it would be inappropriate to require statements in drug labeling that do not contribute to the safe and effective use of the drug, but instead are intendedsolely to influencecivil litigation.” (44 Fed. Reg. 37434, 37435 (June 26, 1979); see also 150 Cong. Rec. $8657-01 (daily ed. July 22, 2004) (statement of former FDA Chief Counsels) [“If every state judge and jury could fashion their own labeling requirements for drugs and medical devices, .. . FDA’s ability to _19_ advancethe public health by allocating scarce space in productlabeling to the most important information would be seriously eroded.”’].) Because innovatorliability could producethe very result that the FDA considers in its expert scientific judgment to be “inappropriate,” the concept should be rejected. B. Existing Law Amply Incentivizes Pharmaceutical Companies to Adequately Warn of Known Risks The Plaintiffs nevertheless argue that the expansivetort duties that the Court of Appeal fashioned are necessary to prevent brand-name companies from underwarning. Accordingto Plaintiffs, without innovator liability, brand-name companies would have“little incentive to ensure that [their] drug labels remain accurate” upon generic entry. (AnswerBrief on the Merits pp. 39-40.) Plaintiffs additionally maintain that if former manufacturers were not forced to answerfor injuries allegedly sustained after they divested ownership of their innovative medicines, they would be incentivized to “sell the brand rights to the drug rather than update the drug’s label.” (/d. at pp. 65-66.) Plaintiffs’ arguments fundamentally misunderstand the FDA regulatory regime and the mechanics of corporate transactions. Atall times, pharmaceutical labeling must warn ofall “clinically significant hazard{s]” for which there is “reasonable evidence of a causal association.” (21 C.F.R. § 201.57(c)(6)(i).) Ifa company learns of new evidence that meets this standard at any time after approval of its NDA,it must submit a supplement to modify the labeling. (/d. § 314.70(b)(2)(v), (c)(6).) A medicine that bears labeling that fails to warn of risks for which there is reasonable evidence of a causal association is “misbranded.” (21 U.S.C. § 352(a), (f), G); U.S. Department of Health and HumanServices, Guidancefor Industry: Safety Labeling Changes — Implementation of Section 505(0)(4) ofthe FD&CAct (2013) p. 7 n.10 [“To implementthe statutory prohibition against marketing a misbranded product, 21 CFR § 201.57(c)(6) requires that prescription drug labeling be ‘revised to include a warning about a clinically significant hazard as soon as there is reasonable evidence of a causal association with a drug.’”].) Pharmaceutical companies have ample incentives to comply with these obligations, because the consequencesfor misbranding a medicine are severe. Putting aside the fact that companies can beheldliable in tort by those whoactually used their products if they fail to adequately warn of the knownrisks, if at any time after approval the FDA believes that a medicine is misbranded,it can withdraw marketing approval (21 U.S.C. § 355(e)(3)) and bring an enforcementaction against the manufacturer (see id. § 352(a)). Upon finding that the medicine is misbranded, a court may enjoin the medicine’s distribution (id. § 332), seize the medication (id. § 334), or impose criminal penalties (id. § 333), which can result in complete exclusion from healthcare programs such as Medicare or Medicaid and thereby eliminate a company’s majordistribution channel. State attorneys generalcan also recoverlarge fines against companies whose medicinesare mislabeled. [See Schwartzet. al., Warning, supra, at p. 1872 n.254 [citing examplesofcivil penalties in the amounts of $1.2 billion, $327 million, $258 million, and $158 million].) Any of the foregoing actions can lead to serious reputational harm that can negatively affect sales of a company’s entire portfolio of medicines. Accordingly, additional litigation against brand-name companiesis not neededto incentivize them to police their labels. Nor would companies be incentivized to “delay the adoption of necessary warnings and then profit from their misconductbyselling the rights to the drug”at an inflated price. (AnswerBrief on the Merits pp. 63— 2]- 64.) Evaluating potential product liability claims is a central component of every pharmaceutical purchaser’s due diligence. (See, e.g., Wheeler, Due Diligence in Life Sciences Mergers and Acquisitions, Lexis Practice Advisor J. (Nov. 30, 2015) [“Evaluating existing productliability claims and potential sources for future claims should be an important part of any due diligence effort for a life sciences transaction.”]; Mannix & Gaba, Acquiring Pharmaceutical or Medical Device Manufacturers: Due Diligence and Risk Reduction Strategies, Practical L.J. (Sept. 2012), p. 36 [“In particular, during the due diligence process acquirors should evaluate: . . . Financial risks related to products liability claims, and product labeling and advertising potentially resulting in misbranding and US Food and Drug Administration (FDA) enforcementactions.”].) During the diligence process, potential purchasers review, amongother things, the medicine’s labeling, reports of adverse events sustained while using the medicine, and the pertinentscientific literature to assess the risk of future product liability litigation. Where a medicine’s labeling fails to adequately warn of its known risks, potential purchasersare likely to notice. This case is instructive. Plaintiffs allege that Brethine’s labeling failed to warn ofa risk of birth defects that by the time of Novartis’s sale of the medicine to aaiPharma had already been identified in nearly a dozen published studies and recognized in public pronouncements by the FDA, the Agency for Healthcare Research and Quality, and the leading professional society of American gynecologists and obstetricians. 22 (AA016-58, at J] 30-31, 33-36, 38-39, 41, 46, 48, 51-54.) Accepting these allegationsastrue,it is hardly plausible that aaiPharma would have been completely unawareofthis evidence before finalizing its purchase. Moreover, a companythat hides material risk information withinits unique possession can expect to face liability to the purchaser in both contract and tort. (See Warner Construction Corp. v. City ofLos Angeles (1970) 2 Cal.3d 285, 294 [85 Cal.Rptr. 444, 449, 466 P.2d 996, 1001] [“In transactions which do notinvolve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise . . . [where] the facts are knownoraccessible only to defendant, and defendant knows they are not knownto or reasonably discoverable by the plaintiff... .””]; Belasco v. Wells (2015) 234 Cal.App.4th 409, 424 [183 Cal.Rptr.3d 840, 852] [non-disclosure of a material fact can trigger rescission of a contract].) In short, the supposed need to prevent companies from “‘toss[ing] the ‘hot potato’ of a dangerously mislabeled drug” doesnotjustify the detrimental consequencesto the public of the Court of Appeal’s holding. (Answer Brief on the Merits p. 6.) V. The Duties Created by the Court of Appeal Are Fundamentally Unfair Having paid nearly all of the costs associated with researching and developing a new medicine, brand-name companies would, under the Court of Appeal’s decision, also have to pay for the harm allegedly caused by generic manufacturers’ products. Making matters worse, a brand-name company would continueto faceliability years (or even decades”)afterit * Plaintiffs maintain that“it is difficult to imagine a scenario in which a brand-name manufacturer is sued an extendedperiod of time . . . after it divested a drug.” (Opening Brief on the Merits p. 69.) Yet that scenario is already playing out across the country. In 2001, Wyeth, Inc., sold Reglan, a medicine used to treat gastroesophageal reflux disease, to Schwartz (continued...) _23- sold all ownership of the medicine andlostall ability to changeits labeling.'° No modern conception offairness would tolerate a company being held liable for injuries caused by a productit did not make years after it ceased all sales of its own product. This case starkly illustrates the unfairness of the Court of Appeal’s decision. Ever since generic Brethine entered the market in June 2001 (Press Release, Impax Receives FDA Approval to Market Terbutaline Sulfate Tablets (June 27, 2001) ), sales of brand-name Brethine have steadily declined. Indeed,all of the brand-name manufacturers of Brethine haveleft the market: Novartis sold all rights to AAIPharma in December 2001 (Press Release, Novartis Divests Brethine in US (Dec. 13, 2001) ), and AAIPharmaceased selling Brethine in August 2006 (see 72 Fed. Reg. 39629, 39630 (July 19, 2007)). Novartis is thus being subjected to decades of potential liability for a competitor’s product, even when that product was manufactured years after PharmaInc. In the years that followed, thousands of lawsuits werefiled against Wyeth alleging that Reglan should have warned ofthe risk of tardive dyskenia. Wyeth continues to face new lawsuits, over a decade after it divested Reglan. (See, e.g., Nicely v. Wyeth, Inc. (Mo. Ct. App. 2014) 451 S.W.3d 694, 695 [complaint filed in June 2012].) '° The only way for a company to change a medicine’s labeling is by submitting a “prior approval supplement”or a “changes being effected supplement” to its NDA. (21 C.F.R. § 314.70(b)(2)(v),(c)(6).) Since only the NDA holder may“submit a supplement to an application,” former manufacturers have no control over the labeling for medicines they no longer own. (/d. § 314.71(a); see also Lyman v. Pfizer, Inc. (D. Vt., July 20, 2012, No. 2:09-CV-262) 2012 WL 2970627,at *16 [recognizing that uponthe sale of the medicine at issue, its former manufacturer “lost any ability to change the. . . label’’].) it (and its successor) stopped earning any revenue from that product, and even when Novartis long ago lost the ability to make changesto the labeling. Plaintiffs respondthat it is equally unfair to deny consumers monetary relief “simply because their pharmacy happen[ed] to havefilled their prescription with a generic version of the drug.” (Answer Brief on the Merits p. 43.) But “[t]he brand-name manufacturerplays norole in the generic manufacturer’s decision to enter the market, and it is not responsible for crafting the regulatory and legal framework within which the generic manufacturer chooses to do so.” (Wyeth, Inc. v. Weeks (Ala. 2014) 159 So.3d 649, 694 n.27 (dis. opn. of Murdock,J.) [recognizing that any perceived unfairness was “created by Congress and the Food and Drug Administration . . . in return for the perceived societal benefit ofless expensive generic drugs, or perhaps instead by the mannerin which the United States Supreme Court subsequently has applied the preemption doctrine to the legislative and regulatory schemestructured by those entities”]). Accordingly, the fact that “the consumer of a competitor’s product is... blocked from imposing on that competitor the costs that would normally accompany the rewards attendantto the sale of that product” does not makeit any less unfairto shift liability onto the brand- name companyfor injuries suffered from a product it never sold. (Jd. atp. 701 n.33.) CONCLUSION For the foregoing reasons, the Court of Appeal’s decision should be reversed. 25- Dated: December 7, 2016 Respectfully submitted, /s/ Jeffrey M. Davidson Jeffrey M. Davidson COVINGTON & BURLING LLP OneFront Street San Francisco, CA 94111 Telephone: (415) 591-7021 Facsimile: (415) 591-6091 jdavidson@cov.com Michael X. Imbroscio Paul W. Schmidt Gregory L. Halperin COVINGTON & BURLING LLP 850 Tenth Street NW Washington, DC 20001 Telephone: (202) 662-6000 Facsimile: (202) 662-6291 mimbroscio@cov.com pschmidt@cov.com ghalperin@cov.com Counselfor Amicus Curiae Pharmaceutical Research and Manufacturers ofAmerica ~26- CERTIFICATE OF WORD COUNT This brief complies with the type-volumelimitations of Appellate Rule 8.200(c)(1) because it contains 7,303 words, as counted by the Microsoft Word word-processing program used to prepare the brief, excluding the parts of the brief exempted by Appellate Rule 8.200(c)(3). /s/ Jeffrey M. Davidson Jeffrey M. Davidson Counselfor Amicus Curiae Pharmaceutical Research and Dated: December7, 2016 Manufacturers ofAmerica 27- PROOF OF SERVICE I, Romeo Berana, am resident of the State of California and over the age of 18 years. Neither I, nor myclient, the Pharmaceutical Research and Manufacturers of America, are a party to this action. My business address is Covington & Burling LLP, One Front Street, San Francisco, CA 94111. On December7, 2016, I caused the following documententitled: BRIEF OF THE PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA AS AMICUS CURIAE IN SUPPORT OF NOVARTIS PHARMACEUTICALS CORP. to be served on the following personsby delivering a true copy thereof, in a sealed envelope, to Federal Express for overnight delivery: Kevin F. Quinn Benjamin Israel Siminou Thorsnes Bartolotta McGuire 2550 Fifth Avenue, Suite 1100 San Diego, CA Leslie A. Brueckner Public Justice Pc 555 12th Stret, Suite 1230 Oakland, CA Eric G. Lasker Katharine R. Latimer Hollingsworth LLP 1350 I Street NW Washington, DC Erin McCalmon Bosman Julie Yongsun Park Morrison & Foerster LLP 12531 High Bluff Drive, Suite 100 San Diego, CA —2?8-— Clerk of the Court Fourth District Court of Appeal Division One 750 B Street, Suite 300 San Diego, CA 92101 Clerk of the Court San Diego County Superior Court ATTN:Hon. Joan M.Lewis 220 West Broadway San Diego, CA 92101 I declare under the penalty of perjury under the lawsof the State of California that the foregoing is true and correct. Executed in San Francisco, California, Degember 7, 2016. | ne Romeo ‘ana ~29-