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Hochendoner v. Genzyme Corp.

United States District Court, D. Massachusetts

March 25, 2015

ANITA HOCHENDONER et al., Plaintiffs,
v.
GENZYME CORPORATION, Defendant GENZYME CORPORATION, Defendant, Consolidated with PHILIP ADAMO et al., Plaintiffs,

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[Copyrighted Material Omitted]

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For Philip Adamo, James Beadnell, Joy Beadnell, James Bishop, Lisa Bishop, Patricia Been, Keith Been, Mercedes Been, Kristina Bohannon, I.B.F, I.B.M., Stephanie Briones, J.B., Lynsey Callahan, Toni Cordova, John Cortina, Jill Cortina, Siro Cortina, Italia Cortina, Gina Decotiis, Mark Decotiis, Adam Dible, Linda Durkin, Carol E. Emerson, Ross Frederickson, Eugene Gnidovec, Kimberly Bundridge, Michael Gnidovec, Elizabeth Gnidovec, Phil Heidrick, Mary Helton, John Helton, D.H., B.H., Sheryl Hughes, Bradly Hughes, Jeannette Hyatt, Kevin Hyatt, Shannon Hyatt, Margaret Hyatt, James Hyatt, Chastity Johnson, Jeremy Johnson, D.J., S.J., Michael Killups, Lisa Killups, Angela King, Steven King, Damon LaForce, Ronald LeComte, Cynthia LeComte, Michael Lezon, Chris Long, Meagan Long, Carolyn Lubker, James Matthews, Scott Patrick, Melissa Patrick, Garrett Rawinsky, Jon Rawinsky, Anne Marye Brodbeck, Courtney Reddick, Megan Shefke, David Shefke, Linda Strange, Douglas Strange, Michael Sico, Joanne Sico, Bradford Stevens, Teresa Viers, Eddie Viers, Joseph Wallace, Jeanne Wallace, Willette Wehunt, David Wehunt, Shashone Weise, David Weise, B.W., Joanne Werstlein, Thomas Werstlein, Trina Wilkins, N.L., Sandra Wilkins, Laura Winchester, Jason Wrobleski, Marc Wrobleski, Plaintiffs (1:13-cv-11336-DPW): C. Allen Black, Jr., LEAD ATTORNEY, PRO HAC VICE, The Law Office of C. Allen Black, Jr., Allison Park, PA; Matthew L. Kurzweg, LEAD ATTORNEY, PRO HAC VICE, Kurzweg Law Offices, Pittsburgh, PA; Anthony R. Zelle, Suzanne M. Whitehead, Zelle McDonough & Cohen LLP, Boston, MA.

For Genzyme Corporation, Defendant (1:13-cv-11336-DPW): Catherine A. Mondell, Ropes & Gray - MA, Boston, MA.

For Anita Hochendoner, Earl Hochendoner, Anita Bova, Joseph M Carik, Barbara J Carik, Amber Britton, Shawn Britton, Cheryl Britton, Thomas Olszewski, Darlene Cookingham, David Roberts, Individually and on behalf of all others similarly situated, Tom Stanziano, Heidi Wittenberg, Wendy Stanziano, Ricky Ladd, Kyle Willink, Michael Masula, Steve Namnath, Erin Masula, Stacy Ladd, Plaintiffs (1:11-cv-10739-DPW): Anthony R. Zelle, Zelle McDonough & Cohen LLP, Boston, MA; C. Allen Black, Jr., The Law Office of C. Allen Black, Jr., Allison Park, PA; Matthew L. Kurzweg, Kurzweg Law Offices, Pittsburgh, PA.

For Genzyme Corporation, Defendant (1:11-cv-10739-DPW): Catherine A. Mondell, Ropes & Gray - MA, Boston, MA; Joan A. Lukey, Choate, Hall & Stewart LLP, Boston, MA.

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MEMORANDUM AND ORDER

DOUGLAS P. WOODLOCK, UNITED STATES DISTRICT JUDGE.

Genzyme Corporation is the manufacturer of Fabrazyme®, the only treatment for Fabry disease approved by the Food and Drug Administration (" FDA" ) available in the United States. In June 2009, due to various problems at its manufacturing facility, Genzyme was unable to manufacturer sufficient Fabrazyme® to meet the demand for the drug. During this shortage, Genyzme adopted a rationing plan under which United States Fabry sufferers would be allocated less than the recommended dose, and newly diagnosed Fabry patients would not be prescribed the drug. The plaintiffs in these two cases have sued Genyzme, asserting various state and federal claims alleging that they have been harmed by deprivation of the recommended Fabrazyme® dosage.

I. BACKGROUND

A. Factual Background

Plaintiffs are individuals with Fabry disease and their spouses (who make derivative

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consortium claims) who reside in the states of Arizona, California, Connecticut, Delaware, Florida, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Virginia, and Washington. Hochendoner Compl. ¶ ¶ 1-23, 34; Adamo Compl. ¶ ¶ 1-87.[1] Fabry disease is a genetic illness characterized by an inability to synthesize the enzyme alpha-galactosidase A. Hochendoner Compl. ¶ 34; Adamo Compl. ¶ 113. If left untreated, it causes premature death from complications including renal disease, heart attack, and stroke. Hochendoner Compl. ¶ ¶ 34-35; Adamo Compl. ¶ 114. Currently there is no cure, but the disease is effectively treated with enzyme replacement therapy. Hochendoner Compl. ¶ 37; Adamo Compl. ¶ 116.

Fabrazyme® is the only enzyme replacement therapy with Food and Drug Administration (" FDA" ) approval. Hochendoner Compl. ¶ 45; Adamo Compl. ¶ 124. It was developed by Dr. Robert Desnick, an employee of Defendant Mount Sinai School of Medicine of the City University of New York (" Mt. Sinai" ) with a grant from the National Institutes of Health (" NIH" ). Hochendoner Compl. ¶ 39; Adamo Compl. ¶ 118. Mt. Sinai holds a patent for the production method pursuant to the Bayh-Dole Act, and it has exclusively licensed the patent to Defendant Genzyme Corporation (" Genzyme" ), which is the sole supplier of the drug to patients in the United States. Hochendoner Compl. ¶ ¶ 40-41; Adamo Compl. ¶ 119-120. In April 2003, the FDA approved Fabrazyme® for the treatment of Fabry patients based on a recommended prescribed dose of 1 mg/kg of body weight injected every two weeks as an intravenous infusion. Hochedoner Compl. ¶ ¶ 42-43; Adamo Compl. ¶ ¶ 121-122.

From April 2003 until approximately June 2009, Genzyme produced enough Fabrazyme® to treat all currently diagnosed U.S. patients. Hochendoner Compl. ¶ 46; Adamo Compl. ¶ 125. A series of incidents, however, then reduced its availability. Sometime before June 2009, a failure to clean and sterilize bioreactors between production batches led to a viral contamination at a Genzyme plant in Massachusetts where Fabrazyme® is manufactured. Hochendoner Compl. ¶ ¶ 47-49; Adamo Compl. ¶ ¶ 126-128. Genzyme accordingly reduced production of Fabrazyme®, which led to a shortage in the U.S. market. Hochendoner Compl. ¶ ¶ 47-53; Adamo Compl. ¶ ¶ 126-137. In November 2009, Genzyme produced Fabrazyme® vials that contained contaminants of particulate steel, glass, and rubber, although it is unclear from the Complaints precisely what impact this had on supply. Hochendoner Compl. ¶ 54; Adamo Compl. ¶ 134. Sometime before March 25, 2011, Genzyme produced and destroyed another lot of defective Fabrazyme®, leading to another shortage. Hochendoner Compl. ¶ 75; Adamo Compl. ¶ 169. A further shortfall of product availability on the U.S. market resulted from Genzyme's reallocation of Fabrazyme® stock to European patients. Hochendoner Compl. ¶ 76; Adamo Compl. ¶ 171.

In response to these production and supply issues, Genzyme instituted a rationing plan for Fabrazyme® . On September 23, 2009, Genzyme organized a meeting of the U.S. Fabrazyme Stakeholders Working Group. Hochendoner Compl. ¶ 63; Adamo Compl. ¶ 146. This group, which included

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Genzyme employees and institutional representatives from a number of hospitals and medical schools (although not from Mt. Sinai), produced a document entitled " Revised Guidance to the U.S. Fabry Community: Management of Fabrazyme® (agalsidase beta for injection) Supply." Hochendoner Compl. ¶ ¶ 64-65; Adamo Compl. ¶ ¶ 147-148. The document announced that there was insufficient Fabrazyme® supply to meet market demand for the remainder of the 2009 calendar year. Hochendoner Compl. Exh. B. It stated that existing patients would be allocated 30% of the recommended prescribed dose for the remainder of 2009 and that newly diagnosed patients should not yet be prescribed Fabrazyme® . Id. In January 2010, the allotted dose for existing patients increased to 50% of the recommended prescribed dose. Hochendoner Compl. ¶ 74. Due to a continued shortage, however, as of June 30, 2011, the date of the filing of the Second Amended Complaint in the Hochendoner case, U.S. Fabry patients were still allocated less than the FDA-recommended dose of Fabrazyme® . Hochendoner Compl. ¶ 77. Some Fabry patients diagnosed after June 2009 were receiving the reduced doses at the time of the Hochendoner filing, while others were still denied any access to the drug whatsoever. Hochendoner Compl. ¶ ¶ 81-82.

In August 2011, Genzyme ceased shipping Fabrazyme® in the United States, but not in Europe, and no U.S. patient received any medication from Genzyme during that month. Adamo Compl. ¶ 179. In November and December 2011, Genzyme allowed some patients in the U.S. to return to full dosage, but subsequently returned all patients to a reduced 50% dose. Adamo Compl. ¶ 182. In August 2010, U.S. Fabry patients had asked the NIH to exercise its " march-in rights" under the Bayh-Dole Act to allow other manufacturers to produce Fabrazyme® . Adamo Compl. ¶ 172. The NIH opened a case in March 2011 but closed it on February 13, 2013, based on Mt. Sinai and Genzyme's representations that it was able to fully supply Fabrazyme® to the U.S. market. Adamo Compl. ¶ ¶ 174, 241.

The pharmocological effectiveness of Fabrazyme® is diminished or negated by reducing the given dose below the FDA-recommended 1 mg/kg, reducing the dosage frequency to less than the FDA-recommended biweekly schedule, or reducing both below the FDA recommendations in combination. Hochendoner Compl. ¶ 44; Adamo Compl. ¶ 123. On November 16, 2010, the European Medical Agency published a statistical study of the Fabrazyme® supply shortage in Europe, which found that patients had an accelerated course of deterioration on the lower dose. Hochendoner Compl. ¶ 104; Adamo Compl. ¶ 163. Because Genzyme has denied Fabry patients access to the drug in FDA-recommended doses, Fabry patients have suffered a return of the symptoms of their life-threatening disease. Hochendoner Compl. ¶ 125; Adamo Compl. ¶ 208.

B. Procedural History

The Hochendoner plaintiffs brought their case against Genzyme and Mt. Sinai in March 2011 in the United States District Court for the Western District of Pennsylvania. Defendants moved to dismiss the case as to Mt. Sinai for lack of personal jurisdiction, to dismiss the case for failure to state a claim upon which relief may be granted, and to transfer any surviving claims to Massachusetts. The court granted Defendants' Motion to Transfer and directed the Clerk to transfer the case to the District of Massachusetts without ruling on the other aspects of the motion to dismiss.

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The Hochendoner plaintiffs filed their Second Amended Complaint after the transfer to this court. The Adamo plaintiffs filed their Complaint in this court against Genzyme and Mt. Sinai in June 2013, which they thereafter amended. Both Defendants moved to dismiss both Complaints. Genzyme filed motions to dismiss the entirety of each Complaint for failure to meet minimum pleading standards under Fed.R.Civ.P. 8 or, in the alternative, to dismiss multiple counts for failure to state a claim upon which relief may be granted under Fed.R.Civ.P. 12(b)(6). Mt. Sinai filed motions to dismiss joining in the arguments presented in Genzyme's motions, adding a number of arguments contending that particular counts should be dismissed for reasons pertaining solely to Mt. Sinai, and further moving to dismiss the entirety of both cases against Mt. Sinai for lack of personal jurisdiction. In addition, both Defendants moved to dismiss the Adamo Complaint as duplicative of the already pending Hochendoner case.

On November 20, 2013, the plaintiffs in both the Hochendoner and Adamo cases filed stipulations of dismissal as to Mt. Sinai, and I have terminated Mt. Sinai from the cases.[2] I have consolidated the Hochendoner and Adamo matters. Currently pending before me are the motions to dismiss filed in the two matters by Genzyme.

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II. STANDARD OF REVIEW

In order to survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), " a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citations and quotation marks omitted). All factual allegations in the complaint must be taken as true and all reasonable inferences drawn in the plaintiff's favor. SEC v. Tambone, 597 F.3d 436, 441 (1st Cir. 2010) (en banc). This " highly deferential" standard of review " does not mean, however, that a court must (or should) accept every allegation made by the complainant, no matter how conclusory or generalized." United States v. AVX Corp., 962 F.2d 108, 115 (1st Cir. 1992). Dismissal for failure to state a claim is appropriate when the pleadings fail to set forth " factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory." Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir. 1997) (internal citations omitted). The plaintiff must provide " a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal citations omitted).

III. DISCUSSION

The eighteen-count Second Amended Complaint in the Hochendoner case and the thirty-five count Amended Complaint in the Adamo case raise several categories of claims. Both Complaints allege violation of the Bayh-Dole Act (Hochendoner Count V & Adamo Count IV); tort law violations, including negligence (Hochendoner Count I & Adamo Count I), negligence per se (Hochendoner Count II), and strict liability (Hochendoner Count III & Adamo Count II); breach of warranty (Hochendoner Count IV & Adamo Count III); breach of contract duties to third-party beneficiaries under New York Law (Hochendoner Count XVII & Adamo Count XXXIV); and loss of consortium (Hochendoner Count XVIII & Adamo Count XXXV). They also allege violations of numerous state consumer protection and product liability laws. Both Complaints allege violations of the California Business and Professional Code (Hochendoner Count XV & Adamo Count VII), the Michigan Product Liability Act (Hochendoner Count XIV & Adamo Count XVI), the Michigan Deceptive Trade Practice Act (Hochendoner VIII & Adamo Count XVII), the Nevada Deceptive Trade Practices Act (Hochendoner Count VII & Adamo Count XXI), the North Carolina Unfair and Deceptive Trade Practices Act (Hochendoner Count X & Adamo Count XXIV), the Pennsylvania Unfair Trade Practices and Consumer Protection Law (Hochendoner Count VI & Adamo Count XXVII), the Washington Uniform Deceptive Trade Practices Act (Hochendoner Count XII & Adamo Count XXXII), and the Washington Product Liability Act (Hochendoner Count XIII & Adamo Count XXXIII).

The Hochendoner Complaint independently alleges violations of the Delaware Uniform Consumer Fraud Act (Hochendoner Count IX), the Florida Deceptive and Unfair Trade Practices Act (Hochendoner Count XI), and the New Jersey Product Liability Act (Hochendoner Count XVI). For its part, the Adamo Complaint alleges violations of the Arizona Consumer Fraud Act (Adamo Count V), the Arizona Products Liability Statute (Adamo Count VI), the Connecticut Product Liability Act (Adamo Count VIII), the Connecticut Unfair

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Trade Practices Act (Adamo Count IX), the Illinois Uniform Deceptive Trade Practices Act (Adamo Count X), the Indiana Products Liability Act (Adamo Count XI), the Indiana Deceptive Trade Practices Act (Adamo Count XII), the Product Liability Act of Kentucky (Adamo Count XIII), the Kentucky Consumer Protection Act (Adamo Count XIV), the Massachusetts Unfair and Deceptive Trade Practices Act (Adamo Count XV), the Minnesota Unlawful Trade Practices Act (Adamo Count XVIII), the Nebraska Uniform Deceptive Trade Practices Act (Adamo Count XIX), the Nebraska Product Liability Act (Adamo Count XX), the New Mexico Unfair Trade Practices Act (Adamo Count XXII), the New York Deceptive Trade Practices Act (Adamo Count XXIII), the Ohio Product Liability Act (Adamo Count XXV), the Ohio Deceptive Trade Practices Act (Adamo Count XXVI), the South Carolina Product Liability Act (Adamo Count XXVIII), the South Carolina Unfair Trade Practices Act (Adamo Count XXVIII), the Virginia Consumer ...


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