September was a busy month for the Husch Blackwell Animal Health Team. We started the month attending the Kansas City Animal Health Corridor Investment Forum, which featured a variety of companies that hope to bring a wide range of new products and innovations to the animal health industry. Later in the month, we attended a Legal, Regulatory and Compliance Forum on Animal Health, which was held in New York City. The conference was well attended and, unlike most legal education programs, was focused exclusively on the animal health industry. The content was excellent, with presenters raising some issues we thought worthy of sharing with the animal health community. Here are a few summary points from the presentations:
- Animal Health is On the Radar of Regulators. Speakers highlighted the fact that the animal health industry is no longer essentially a niche market out of the spotlight. Instead, animal health is viewed as a growing area of economic strength and, as such, the industry is garnering much more attention from regulators. In fact, the USDA, FDA, EPA and state and local regulators have put many new regulations in place and are otherwise watching production and other issues much more carefully than they have done in the past. Much of this activity is driven by consumer groups and the ever increasing number of lawsuits that are filed annually involving animal health companies, including consumer false advertising claims.
- If Your Company Potentially Could be the Subject of A Future Enforcement Action, Involve Lawyers Early On in the Life of A Product. The speakers emphasized the need to involve lawyers early on in the product development process, not afterwards once a product is on the market and an issue arises. It is penny wise and pound foolish to involve lawyers only when there is a lawsuit or regulatory action. This is the case because counsel can take proactive, helpful, preventive steps from the beginning that may minimize or even eliminate problems with regulators and/or reduce or eliminate litigation risk down the road. For example, counsel can help establish rules for internal communications and provide training that can prevent the creation of “bad documents”, such as poorly phrased emails (e.g., “We tried to implement a QC process that would eliminate the risk of unsafe products from reaching the market, but we just can’t seem to get 100% effectiveness in our fail safe systems.”) that can harm one’s defense later on when the regulator comes knocking. Instead, counsel can facilitate team members awareness and sensitivity as to what they say in the more permanent, electronic written medium.
- The MUMS (“Minor Use and Minor Species”) Act May Not be the Least Expensive Avenue for Development of New Veterinary Drugs. It is often believed that MUMS approval processes save money and expedite new drug approvals. If, however, the drug is being developed for ultimate use in food animals, ultimately the product will need to go through the more rigorous approval process anyway. So, in the end, submitting first under MUMS may only, in the end, add to your expenses.
- For European Patent Owners, Now is the Time to Decide Whether to Opt Out of the Unified Patent Court. This Court is being established to provide a court system for all participating states for litigating in all participating states matters involving a European Patent. Article 83 of the Unified Patent Court provides for a transition period during which owners of patents will be able to opt out of the UPC. A party who opts out may later opt in. There will be a fee associated with opting out. Although the amount has not yet been set, some believe it may end up being around 100 Euros. Start planning now.
- Consumer Class Action Lawsuits Involving Animal Feed, Treats and Other Products are On the Rise. New cases are being filed almost daily against all types of products in which the class action plaintiffs bring product mislabeling and/or false advertising claims. Arbitration clauses have been one avenue used by companies to try to minimize litigation costs, but they have not always succeeded in doing so. Coupon settlements are a new trend in class action settlements, but they are subjected to careful scrutiny by courts. If suit is filed, consider filing a motion to dismiss or otherwise find a way to attack class certification. Finally, the speakers recommended that, if a party is sued, they should consider a settlement strategy early on in the case.
These are but a few of the highlights from the program. It was well attended and the content truly was relevant to those in the animal health industry. If you would like more information about any of the topics touched on above, feel free to contact any other member of the Husch Blackwell Animal Health Team.