On April 3, 2013, the First Circuit Court of Appeals ruled that drug manufacturer Pfizer, Inc.’s fraudulent marketing of the drug Neurontin directly caused plaintiffs Kaiser Foundation Health Plan Inc., Harden Manufacturing Corporation and Aetna Inc. to suffer financially. The three plaintiffs brought suit against Pfizer in a Massachusetts federal court, alleging that Pfizer violated federal racketeering laws by fraudulently marketing the epilepsy drug Neurontin as having collateral, off-label benefits. The plaintiffs contended this caused health care providers to pay for prescriptions that were essentially ineffective at treating the health conditions at issue. Pfizer argued that there was no causal chain between the drug manufacturer and the injury allegedly suffered by the Plaintiffs. However, the three-judge panel disagreed with Pfizer and ruled against the company in all three cases. A brief summary of each ruling follows:
The First Circuit affirmed the $142 million jury verdict in favor of HMO operator Kaiser. In that case, Pfizer was accused of marketing Neurontin as effective in the treatment of several disorders, including neuropathic pain and migraines, even though such claims were unsupported by scientific evidence. Kaiser officials claimed they were duped into believing that migraines and bipolar disorder could be treated effectively with Neurontin. Pfizer argued that Kaiser physicians used their own judgment to prescribe Neurontin and, therefore, no causal chain existed between the company and patients prescribed the drug for off-label purposes. However, the appeals court found that Pfizer directly influenced the doctors into prescribing the drug for off label purposes. The court noted that the fraudulent marketing by Pfizer included paying Kaiser doctors to write medical articles with false information about the drug’s supposed off label benefits.
In the Harden case, the First Circuit ruled against Pfizer, finding that the lower court erred in ruling that the plaintiffs – including Blue Cross Blue Shield of Louisiana – failed to show direct causation between Pfizer’s fraudulent marketing of Neurontin to treat bipolar disorder and the alleged financial injury. The appeals court reversed the lower court’s granting of summary judgment, vacated its class certification denial and remanded it for further proceedings.
In the third case, the Aetna case, the First Circuit reversed the lower court, ruling that the HMO provided enough evidence of causation and damages to survive summary judgment on its RICO claims.
The First Circuit’s rulings against Pfizer last month changed the landscape for third-party payor cases involving defective pharmaceuticals. In terms of how a plaintiff must prove its case from a causation and damages perspective, the appeals court materially softened the “individual proof” rule, allowing instead for “aggregate proof” in these off label marketing cases. According to the Court, “Once a plaintiff presents evidence that he suffered the sort of injury that would be the expected consequence of the defendant’s wrongful conduct,” the burden shifts to the defendant to rebut this causal inference. Although Pfizer presented testimony from doctors who stated that they prescribed Neurontin for off-label uses without relying on Pfizer’s misrepresentations, the existence of these individual doctors did not defeat the implication that Pfizer’s misinformation had a significant influence on thousands of other prescribing decisions.
In addition to the aggregate statistical evidence, the plaintiffs offered documents showing that psychiatrists almost never prescribed Neurontin for bipolar disorder until after Pfizer began its off-label marketing. Significantly, at that point prescriptions jumped by 1700 percent in two years. Ultimately, the Court found that it is a jury’s responsibility to weigh the individual testimony presented by Pfizer against the aggregate and circumstantial evidence presented by the plaintiffs.
The Warner-Lambert Company developed and marketed Neurontin for several years before Pfizer acquired the drug maker in 2000. Four years later, Warner-Lambert pleaded guilty and agreed to pay $430 million to resolve off-label marketing allegations by the Justice Department. If you need more information on these cases, contact Ali Hawthorne, a lawyer in our Consumer Fraud Section, at 800-898-2034 or by email at Alison.Hawthorne@beasleyallen.com.
Sources: Law360.com and Civil Justice Magazine
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.