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Acclarent Trial Media Monitoring 7/11/16
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Acclarent Execs Ask Judge To Halt 'Confusing' Prosecution
Jul 8, 2016 | Law360
By Brian Amaral
Lawyers for two former Acclarent Inc. medical device executives on Thursday urged the Boston federal judge overseeing their fraud trial to toss all remaining counts against them, arguing that the federal government has presented a case that no reasonable jury could convict them on.
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Acclarent Execs Ask Judge To Halt 'Confusing' Prosecution
Jul 8, 2016 | Law360
By Brian Amaral
Lawyers for two former Acclarent Inc. medical device executives on Thursday urged the Boston federal judge overseeing their fraud trial to toss all remaining counts against them, arguing that the federal government has presented a case that no reasonable jury could convict them on.
Former CEO William Facteau and head of sales Patrick Fabian said in a motion for judgment of acquittal — and oral arguments — that the government’s evidence against them in the off-label promotions fraud case has been woefully inadequate. For example, even though they’re accused of defrauding Johnson & Johnson, which later purchased the company, the government didn’t call a single J&J witness before resting.
“With the government now having presented the evidence it claimed would establish each of the charged crimes beyond a reasonable doubt, it is indisputable that both defendants’ and the court’s previously expressed concerns about the viability and ‘appropriateness of this prosecution’ were well-founded … and that there is insufficient evidence for a reasonable jury to convict on any of the charges,” Facteau and Fabian said Thursday. “This prosecution must therefore not proceed a step further.”
Such motions are standard for criminal trials. But it provides a thorough look into Facteau and Fabian’s lines of attack on the prosecution, and is likely to feature heavily in closing arguments — which could occur in the coming days. The prosecution was not required to argue its side to U.S. District Judge Allison Burroughs, indicating that tossing the case before it goes to a jury will be a steep climb.
On the fraud counts, Fabian and Facteau said, the prosecution hasn’t shown that they intended to defraud or mislead anyone about the Stratus medical device and that any missing information was material to the FDA, as required by the recent Escobar decision at the Supreme Court.
The weeks-long trial has focused on Acclarent’s Stratus device, cleared by the Food and Drug Administration in 2006. Prosecutors say that Facteau and Fabian misled the FDA about their true intentions for the device — resembling an elongated pen, it is inserted into a patient’s ethmoid sinus to clear infections. While the company said its function was to create breathing room in the sinus and distribute saline, it really designed the device, and then promoted it, to deliver the steroid Kenalog, prosecutors say.
But, Facteau and Fabian said Thursday, the record lacks any evidence showing that the company’s 510(K) applications hid anything material from the FDA. The 510(K) application is an easier path to clearance, based on similarity to another device, than pre-market approval, which involves pricey studies.
While the government is now focusing on saline versus Kenalog, the FDA never did at the time of the alleged criminal activity, Facteau and Fabian said.
Dr. Anjum Khan, an FDA doctor, testified that Acclarent hid evidence that saline didn’t work properly in the device.
“Dr. Khan’s complaint at trial that Acclarent did not inform her about the saline-elution rate is immaterial as a matter of law because such information was unnecessary to the clearance determination as a statutory matter,” Facteau and Fabian said. “This was amply evidenced by the fact that FDA never asked Acclarent for such information during the seven years the device was under its jurisdiction.”
The trial so far has featured doctors who say Acclarent focused exclusively on the off-label use of the device, sales reps who said they were trained to focus on its use as a steroid applicator, and FDA representatives who said the company did not inform them of adverse events in its safety studies.
On the adulteration and misbranding counts, the prosecution fails because of the “confusing” nature of the case, Facteau and Fabian said. The Food and Drug Administration’s procedures for clearing medical devices has confused experienced attorneys, a federal judge, even reporters. At issue, in part, is a medical device’s “intended use,” for which a clear definition proves elusive.
The lack of clarity violates Facteau and Fabian’s due process rights, they argued. They’ve raised the objection before in motions to dismiss.
“Defendants renew those legal arguments here, as reinforced by the parties’ and the court’s ongoing struggle to decipher the meaning of the provisions, and by the consistent testimony of witnesses demonstrating that the concept of ‘intended use’ is unknown and unknowable,” Facteau and Fabian said.
On the single conspiracy count, Facteau and Fabian said the government hadn’t come close to proving an essential element — that they intended to agree to break the law.
“To the extent there was improper action by certain sales representatives, the record is devoid of evidence that the situation was brought to defendants’ attention,” Facteau and Fabian said, adding: “Viewing the evidence in the light most favorable to the government, the record shows at most that among hundreds of sales representatives, a handful engaged in off-label promotion and used materials or talking points unapproved by Acclarent’s regulatory department.”
The government is represented by Sara Bloom, Patrick Callahan, William Weinreb and Raquel Toledo of the U.S. Department of Justice.
Facteau is represented by Reid Weingarten, William Hassler and Jessica Urban of Steptoe & Johnson LLP, Michael J. Pineault of Clements & Pineault LLP, and Leo Cunningham and Lisa Davis of Wilson Sonsini Goodrich & Rosati PC. Fabian is represented by Kristen A. Kearney, Frank A. Libby Jr., Daniel LaPenta and Brian J. Sullivan of LibbyHoopes PC.
The case is U.S. v. Facteau et al., case number 1:15-cr-10076, in the U.S. District Court for the District of Massachusetts.
--Editing by Kelly Duncan.
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