Life sciences and healthcare class actions

Richard Krumholz, Global Head of Litigation and Disputes: Welcome, everyone, to the Norton Rose Fulbright class action update series. My name is Richard Krumholz, Global Head of Litigation at the firm, and with 1,200 disputes lawyers around the world, it really should come as no surprise that we see litigation trends far sooner than our peers. Today, we welcome D'Lesli Davis, Co-Head of Life Sciences at the firm. Welcome, D'Lesli.

D'Lesli Davis, Head of Life Sciences and Healthcare, United States: Thanks, Richard. It's great to join you and kind of try to read the tea leaves here, and there really is a lot to report.

Richard Krumholz: Well, you know, our global Litigation Trends Survey in the US, and I do want to start with the United States, because it probably has more class actions, obviously, than any other region in the world, and our Litigation Trends Survey has indicated that it's the top threat, according to general counsel, really, around the globe. So if you could start us off with the US, that would be great.

D'Lesli Davis: Well, that's right. I mean, class actions are keeping GCs up at night, and that's true for the life sciences GCs, as well. In the United States, the DOJ is just dead-set on aggressive enforcement right now, so that creates this public regulatory foundation. But what we're seeing in the life sciences area is a real increase in private antitrust class actions, and those are brought by direct purchasers, they're brought by end payers, even independent resellers of generic and branded drugs. And those claims really are price-fixing claims. They're also that settlement scheme in the patent world, the pay-to-play schemes, those are the claims that are coming up in this private antitrust stuff.

Richard Krumholz: What are you seeing in Canada? I know that we reached out to all of our partners across the globe, and Randy Sutton, your Co-Head of Life Sciences around the globe, was one of those folks. What did Randy have to say as to Canada?

D'Lesli Davis: So, Randy has really interesting, good news for life sciences. He says that they are seeing in Ontario, the province where a lot of these life science class actions are brought, that they're defeating class certification at a record number there.

While that's great news for our life sciences clients, right, there are a couple of additional ramifications for that. The first is that you're seeing an uptick in class actions then in the other provinces like British Columbia, like Quebec.

The second is that you're also seeing an uptick in the individual mass tort actions. Now, while that sounds like bad news, we're actually hearing from our clients that that's good news, because in the individual mass tort scenario, it's a lot easier to evaluate the claims and see if they're good claims, meritorious claims, or not so much. And when you're in the class action scenario, right, there's so much time spent on commonality that you can't really get to the crux of, "are these viable claims?"

Richard Krumholz: What are you seeing in South Africa?

D'Lesli Davis: So, in South Africa, Natasha Naidoo, our Head down in South Africa looking at the life sciences class action world, says they have seen a 300 percent increase in class certification, and a huge amount of that is in the medical device scenario.

In South Africa, there's not really any legislation that allows for class actions, but the attorneys and the courts there, through the use of uniform rules of court and the constitution, have sort of crafted a class action practice down there.

And then there is a Consumer Protection Act of 2008 that is a product-liability-focused act that provides big remedies here that can be tagged onto these created class actions.

Richard Krumholz: D'Lesli, take us to the European Union, where I know that class actions really hadn't taken hold until much recently.

D'Lesli Davis: Sure, I spoke to Nikolas Smirra, a life sciences Partner in our Munich office, and he reported that there are big changes in the work in the EU, with regard to class actions.

So, with the passage of the European Representative Actions Directive, a directive that mandates that EU member states must, by June of 2023, pass legislation that allows pre-ordained consumer protection groups or agencies to pursue class redress, sound like class actions, right?

That has been a sweeping change for what's going to go on in the EU. Those actions are focused on things like data privacy breaches, financial protocol breaches, violations of consumer protection law, and then the expectation is that remedies will be broad; something like a sweeping change to a consumer contract, right?

So, they're really expecting big changes, not only because of the directive, but because each member state can enact it the way they want to. So Germany, for instance, may be much broader than France. So, a lot to watch there.

Richard Krumholz: Does that mean that there's a regulatory gating, of sorts, before it gets to the courts?

D'Lesli Davis: Well there is, and of course, it's hard for us in the US to understand exactly what that means, but with the EU collectively deciding, "We need this," and yet the member states having the discretion to do it the way they want, it's hard to really see how this is going to look, and Nikolas says to stay tuned.

Richard Krumholz: Incredibly interesting. Let's go down under. I know you spoke to Cameron Harvey, Head of Litigation in Australia. Can you take us through what's going on there?

D'Lesli Davis: Sure. Cameron noted, as we all know, that Australia has a really well-regulated class action environment down there and that, in the life sciences space, once you see something drug-or medical device-related in the US, you're going to see it crop up in a class action down in Australia pretty quickly.

So, that's par for the course, but what he said is the really new differentiator down in Australia is that they have a very aggressive regulator, and that regulator is just combing through adverse event reports to see what's going on and be ready to take action quickly.

And, another theme for the day, right, that's happening with medical devices at a really upped pace.

Richard Krumholz: What are you seeing generally in the pharma, biotech and medical device space across the globe?

D'Lesli Davis: Well, you know, securities is always an issue there, certainly in the US and elsewhere, but not a big uptick there. So, when you look at what's happening, I think across the board, the US angle is that economic loss, that antitrust class actions are growing in this space, but what we're seeing globally as we talk to these heads of life sciences across the board is that we're seeing that become more Westernized: more litigations, more class actions. So, stay tuned, it could be really a growth area.

Richard Krumholz: And is that the reason you think that we're seeing through our litigation trends survey that this is really the top threat that the in-house counsel fear most?

D'Lesli Davis: It has to be and, of course, with these life sciences companies, we've got so many entities doing business across the globe that this Westernization trend can be something that can be really concerning.

Richard Krumholz: D'Lesli, thank you so much for your time today, and to our viewers, we hope that you have found this to be both helpful and educational. And if, of course, you ever need anything, feel free to reach out.