WASHINGTON (Legal Newsline) - A laboratory criticized by the Food and Drug Administration of having “scientific deficiencies” and accused by pharmaceutical companies as being in league with plaintiff attorneys has announced a contract with the Pentagon to perform quality testing on drugs for the Defense Department.
The contract with Valisure is technically a cooperative research and development agreement and doesn’t involve any payments. But it could help the New Haven, Conn., lab attract new clients for a business that Securities and Exchange Commission filings indicate may have raised as much as $10 million from investors so far.
Congresswoman Rosa DeLauro (D-Conn.) hailed the agreement in an Aug. 8 news release, saying Valisure will “ensure our men and women in uniform have access to safe and secure medicines.”
A Defense Department spokesperson couldn’t verify details of the contract, which Valisure said is to develop a scoring system for the quality of medications including imported generic drugs. “We are looking into your request,” the Pentagon spokesperson said in an Aug. 28 email.
Valisure was founded as an online pharmacy and testing lab but sold the pharmacy before receiving a critical review from the FDA and shifted to testing drugs for impurities and dangerous substances. Defendants accuse Valisure of using inaccurate testing methods and coordinating efforts with lawyers – including the brother-in-law of Valisure chief executive David Light – by sharing reports with them before filing citizen petitions the with the FDA.
Lawyers have repeatedly filed class actions citing Valisure research on the same day the lab files its citizen petitions with the FDA and before they are publicly posted on the agency’s website. Defendants in multidistrict litigation over the popular heartburn medicine Zantac accused Valisure of having a “cozy relationship with the plaintiffs’ bar” in a February 2022 request for a subpoena seeking information about the lab’s financial relationships with plaintiff firms.
A judge quashed the subpoena but later dismissed the case, ruling Valisure’s methods for detecting a cancer-causing substance called NDMA were unreliable. The lab heated the drug in an “artificial stomach” to 266 degrees, far above what it would encounter in the human body, and exposed it to a level of salt that would kill a human. No NDMA was detected at normal temperatures, the judge found.
Valisure also prompted a wave of recalls of suntan lotion and other personal-care products after filing FDA petitions claiming they contained unsafe levels of benzene, although an industry association said the lab was using the safety limit for products consumed orally, not on the skin. Some of the resulting lawsuits have settled for millions of dollars, including million-dollar fees for the lawyers who filed them.
The FDA criticized Valisure’s methods in a Dec. 5, 2022, letter, saying the lab “failed to establish and document the accuracy, sensitivity, specificity and reproducibility of its test methods.” Among other things, the agency said Valisure didn’t calibrate instruments correctly, improperly switched methods when results were “out of specification” and entered test data into cloud computing accounts without retaining proper backup documentation.
Valisure, in response, said it is accredited by ISO, an international standard-setting organization. It once touted its status as an FDA-certified lab to potential clients but deactivated its registration amid criticism from the agency that clients would incorrectly believe they could validate current good manufacturing practices, or CGMP. In a response to the FDA, Valisure said its testing is “only for informational and marketing purpose and not for any regulatory purpose.”
Despite this, some in Congress, including Rep. DeLauro and Florida Republican Rep. Neal Dunn, are pushing for new laws that would produce a windfall for labs like Valisure by requiring drug and cosmetics companies to hire independent labs to test their products. Valisure paid the lobbying firm of former Sen. Tom Daschle $190,000 between 2019 and 2020 to support laws including the Safer Beauty bill requiring cosmetics manufacturers to disclose “certificates of analysis” listing all ingredients. The bill is sponsored by Reps. Jan Schkowsky (D-Ill.) and Lizzie Fletcher (D-Texas).
Unilever showed how lucrative the independent testing business might be in a court filing in a Connecticut class action it is fighting over benzene in antiperspirants. The filing includes a September 2022 letter from Valisure’s lawyer, Marty Sipple, offering to test Unilever’s aerosol products for benzene for an up-front payment of $1.25 million and $250,000 a month, promising to keep results confidential.
Unilever complained that Valisure had already been paid by plaintiffs to produce the research cited in the class action and suggested Valisure might have been offering to keep test results for its products out of the citizen petition it filed with the FDA that month.
In a response to questions, Valisure declined to say how much money it has raised from investors or to name any clients. It said it is “occasionally hired as a consulting expert for law firms due to Valisure’s leadership in identifying dangerous contaminants in pharmacy products.” Asked if it had any financial arrangements with law firms based on the success of litigation, the firm said it “had no contractual engagements with any plaintiff firm regarding the Zantac MDL.”
Defendants seeking to probe further into Valisure’s financial arrangements have run up against a problem: While lawyers cite the lab in their initial complaints, they don’t designate it as an expert witness in subsequent litigation. That means judges can reject subpoenas for information normally available about witnesses, which happened in the Zantac MDL.
Valisure was founded in 2015 by Yale graduates Light and Adam Clark Joseph, an economist, as an online pharmacy selling drugs the lab had certified as safe. Valisure sold the pharmacy shortly before a 2021 FDA inspection found numerous violations including failing to notify the agency of “illegitimate product” and never filing annual reports as a wholesale distributor. It filed its first FDA petitions in 2019, including the claim Zantac contained dangerous levels of NDMA.
The FDA required a nationwide recall of the drug soon after, but quickly criticized the lab’s methods as “not suitable.” In 2020, Valisure filed a petition claiming the diabetes drug metformin also had dangerously high levels of NDMA. The filing spawned at least eight lawsuits and a limited recall but the FDA again criticized the lab, stating in a June 2020 letter that its methods were “unreliable.”
“The use of unvalidated testing procedures, such as those Valisure used to test metformin products can lead to inaccurate results creating confusion and thereby causing a public health risk,” the agency said.
Valisure routinely includes recall demands and a request for the FDA to mandate independent lab testing in its citizen petitions. “We disagree that a regulation requiring or a guidance recommending independent testing is necessary,” the FDA said in 2020. “Independent testing does not generally provide a unique insight into risks and is therefore generally not warranted.”
Valisure’s activities have likely provided a windfall for plaintiff lawyers including Light’s brother-in-law Yitzhak S. Levin of Levin Citron Rodal of Miami. His was among the firms that sued over Zantac at the same time as Valisure filed its citizen petition with the FDA. He was quoted at the time as saying “the very medications we have been taking to heal us have actually been putting us at risk of developing cancer.”
Levin’s firm also sued Procter & Gamble over benzene on Nov. 4, 2021, the same day Valisure filed a citizen petition over those products. That case ultimately was consolidated in a class action that produced $2.4 million in fees while class members received a total payout of $3.6 million - $25,000 in cash and $3.5 million in vouchers for P&G products.
Other law firms that could have gotten advance word of Valisure’s filings include Bursor & Fisher of Miami, Honik Law in Philadelphia and Kanner & Whiteley of New Orleans. A judge awarded them a third of a $3 million settlement in January of a class action against Walmart and Artnaturals over benzene in hand sanitizer that was based on a Valisure study.
Representatives DeLauro and Dunn are pushing for an amendment to the Defense procurement law requiring offshore pharmaceutical companies to hire an “accredited independent laboratory” to certify their products as safe. The new rule would define accreditation as meeting ISO 17025, which Valisure holds.