That's the question raised in a motion filed by the drugmaker's lawyers in a whistleblower lawsuit in federal court in New Jersey. The case, which has actually been kicking around a few years, was recently unsealed and centers on the fatal side effects associated with a neuromuscular blocking agent known as Raplon that Organon withdrew in 2001. (Here's the background).
A former Organon employee alleges that Organon failed to disclose to the FDA concerns about serious bronchospasm that were cited by Raplon clinical trial investigators prior to the drug’s launch in 1999. And the employee, Jeff Feldstein, has added Schering-Plough as a defendant since the drugmaker recently paid $14.3 billion to acquire Organon. Here is the Schering-Plough motion.
In arguing the suit should get booted, Schering-Plough's lawyers say he could have learned about Raplon problems from product-liability lawsuits or news reports, which means he doesn't have the right to file suit. (UPDATE: Although as reported previously, Feldstein claims Organon didn't disclose serious adverse events - as opposed to adverse events - prior to approval). They also maintain he doesn't satisfy rule 9b, a provision of the False Claims Act that requires a whistleblower to provide specific info about false claims submitted to government programs for payment.
This is standard stuff. But toward the end, the motion gets interesting, because the lawyers then charge that Feldstein also failed to prove the "successor (company) had notice of the claim before the acquisition." In other words, Schering-Plough's lawyers suggest the drugmaker may not have known about the lawsuit, despite the potential for a sizeable liability. Or did it?
This, of course, raises several troubling issues. What, if anything, did Schering-Plough and its reps know about the lawsuit when conducting due diligence prior to the Organon acquisition? Did Organon and its reps not disclose the lawsuit fully and properly to Schering-Plough and its reps? As Shearling Gets Plowed points out, this is likely to upset the investment bankers who helped the drugmaker raise money for the Organon deal. After all, what were they told about the lawsuit? And at the end of the day, who will take the heat if due diligence wasn't performed properly?