Former Food and Drug Administration (FDA) Commissioner Margaret A. Hamburg, her hedge-fund executive husband, and Fortune 500 giant Johnson & Johnson colluded to enrich themselves by failing to warn the public about a “deadly” antibiotic, a federal racketeering lawsuit claims.
“Once confirmed as FDA commissioner, Dr. Margaret A. Hamburg acted as the instrumentality that all defendants used to perpetrate their conspiracy and racketeering enterprise by having her act illegally and outside the scope of her authority as FDA commissioner to suppress material information to plaintiffs and the public that Levaquin was inherently dangerous and in fact, deadly,” the complaint alleges.
The suit was filed in the U.S. District Court for the District of Columbia Jan. 19, 2016, on behalf of five individuals who claim they suffered severe physical harm as a result of taking the antibiotic.
“Had this information been disclosed to plaintiffs and the public at large, her and her husband’s financial gain and net worth would have plummeted, since Dr. Margaret A. Hamburg’s husband, Peter F. Brown, reaped and continues to reap huge financial gain as a result of Renaissance Technologies, L.L.C.’s holdings of Johnson & Johnson stock,” according to the complaint.
Alexandra Walsh, an attorney for Hamburg, said “Mr. Klayman’s allegations against Dr. Hamburg are patently false. There is no factual or legal basis for the lawsuit he has filed, and we are confident the court will dismiss his claims in their entirety.”
Walsh was referring to attorney Larry Klayman, who represents the plaintiffs in the suit.
The suit further claims that Hamburg ignored pleas from medical experts, patients and U.S. senators to add additional warning labels so she could profit personally, according to the racketeering complaint filed in U.S. District Court for the District of Columbia.
President Obama appointed Hamburg to run the FDA from May 2009 to March 2015, while her husband, Peter F. Brown, was a co-CEO at New York hedge fund giant Renaissance Technologies.
Renaissance had substantial stock in Levaquin-owning Johnson & Johnson during Hamburg’s FDA tenure, according to the lawsuit and U.S. Securities and Exchange Commission records obtained independently by The Daily Caller News Foundation. Forbes estimated Brown earned roughly $90 million in total compensation in 2012.
The plaintiffs — Terry Aston, John Fratti, Linda Martin, David Melvin and Jennifer Wilcox — claim they suffered muscle twitching, abdominal pain, kidney and liver damage, hair loss, depression, psychosis, and hearing and vision problems, among a host of other issues, from Levaquin.
The FDA’s Adverse Event Reporting System documented “500 reported deaths associated with consuming Levaquin” from 2009 to 2015, although the FDA assumes only 10 percent of such events are reported and there could be as many as 5,000 deaths, the complaint alleges.
The plaintiffs seek $870 million in punitive and other damages and a jury trial. The suit also names as defendants Robert L. Mercer and Renaissance founder James H. Simons, Brown’s colleagues during Hamburg’s tenure, and Johnson & Johnson subsidiary Ortho-McNeil-Janssen Pharmaceuticals.
The FDA first approved Levaquin for some uses in 1996, but the FDA Adverse Reporting System since at least 2009 documented the drug’s association with serious nerve and psychiatric damage, the complaint claims.
Pennsylvania’s U.S. senators — Democrat Robert Casey and Republican Pat Toomey — also requested more FDA warning labels on Levaquin in 2010, the complaint notes.
Dr. Charles Bennett, oncologist and researcher at the Southern Network on Adverse Reactions at the University of South Carolina, filed two citizens petitions to Hamburg’s FDA in 2014, urging further labeling to warn of possible cell damage and neurodegenerative diseases like Parkinson’s, Alzheimer’s and Huntington’s associated with Levaquin.
Hamburg also received “hundreds” of emails from people who had severe health problems from taking Levaquin, but did nothing, the complaint claims.
The FDA added some additional warning labels for Levaquin in August 2013 to warn of risk for “possibly permanent nerve damage from antibacterial fluoroquinolone,” but suppressed the drug’s full dangers, the complaint alleges.
It wasn’t until November 2015, after Hamburg left, that an FDA advisory committee recommended clearer, more comprehensive warning labels for Levaquin and related drugs, the complaint alleges.
The complaint also alleges that Hamburg verbally supported the October 2013 FDA approval of painkiller Zohydro, produced by pharmaceutical company Alkermes, while Renaissance held significant stock in Alkermes.
An FDA advisory board voted 11-2 against approving Zohydro in December 2012 over fears the drug didn’t have enough anti-abuse protections, and 28 state attorneys general urged the FDA to undo its approval of the drug in December 2013.
Sen. Joe Manchin, a Democrat from West Virginia, introduced a bill in 2014 to ban the opioid. But Hamburg defended the drug’s approval in a March 2014 congressional hearing, saying that, “if appropriately used, it serves an important and unique niche with respect to pain medication and it meets the standards for safety and efficacy.”
Both Alkermes and Johnson & Johnson stock value increased significantly during Hamburg’s tenure, according to Yahoo Finance historical data.
Renaissance also increased its holdings from 117,800 shares worth $2.79 million to 794,686 shares worth $22.79 million in the second quarter of 2013 before Zohydro’s October 2013 approval, according to the complaint.
The Office of Government Ethics (OGE) directed Hamburg and her husband to divest all personal holdings in Renaissance, except those in Renaissance’s Medallion Fund because OGE considered its computerized quantitative model similar to a blind trust, according to the Wall Street Journal. Hamburg’s financial disclosures show she kept between $250,000 and $500,000 in Medallion Fund assets, and Brown kept more than $1 million.
But the complaint alleges Hamburg failed to disclose that her husband “at all material times, still held shares in — and benefits financially from — all of the stocks of Renaissance, via Renaissance Technologies profit-sharing …”
Lawyers for Brown, Mercer, Simmons, Renaissance Technologies and Johnson & Johnson did not respond to requests from TheDCNF for comment.
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