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Third-Party Payors’ RICO and State Unfair Competition Claims Against Pfizer Survive Summary Judgment in Off-Label Marketing of Neurontin Case


The First Circuit U.S. Court of Appeals issued decisions in three cases that arose from multidistrict litigation (“MDL”) concerning the off-label marketing of Neurontin, including this case, In re Neurontin Marketing and Sales Practices Litigation, 2013 WL 1320408 (C.A.1 (Mass.), April 3, 2013) (not designated for publication) (referred to by the First Circuit as Kaiser Foundation Health Plan, Inc. v. Pfizer, Inc.); and In re Neurontin Marketing and Sales Practices Litigation, 2013 WL 1320403 (C.A.1 (Mass.), April 3, 2013) (not designated for publication) (referred to by the First Circuit as Aetna, Inc. v. Pfizer, Inc.).

 

A self-insured employer, a public employee union health benefits trust, and a nonprofit health insurance provider, representing a putative class of third-party payors (“TPPs”), sued Pfizer, a drug manufacturer, for the off-label marketing of Neurontin, an anticonvulsant drug. Specifically, the TPPs raised claims under section 1962 of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.A §§ 1961–1968, the New Jersey Consumer Fraud Act (NJCFA), N.J. Stat. Ann. §§ 56:8–1 to 56:8–195, and state common law claims of fraud and unjust enrichment. The district court granted summary judgment to Pfizer and denied class certification on the plaintiffs' claims.

 

The First Circuit reversed in part, vacated in part, and remanded. The core of the plaintiffs' claims, as in the other two cases decided the same day, was the allegation that Pfizer engaged in a fraudulent off-label marketing campaign that caused the TPPs to pay for Neurontin prescriptions that were ineffective for the off-label conditions at issue, and that the plaintiffs suffered injury when they paid for those prescriptions.

 

The plaintiffs' appeal was limited to only the claims regarding the off-label use of Neurontin for bipolar disorder, as to both the summary judgment and the class certification issues. The plaintiffs argued that the district court erred in concluding that they failed to present a genuine issue of material fact as to whether their injuries were caused by Pfizer's conduct. They also argued that the district court abused its discretion in denying class certification on the basis of a finding that individual issues of causation and damages would predominate.

 

Applying the same reasoning the court set forth in the other two cases to the facts of record here, the court reversed the grant of summary judgment as to the plaintiffs' RICO claim. The First Circuit disagreed with the district court’s holding that the plaintiffs' failure to show any direct reliance on Pfizer's misrepresentations in making decisions about their formularies, together with the plaintiffs' use of aggregate evidence of causation, made their claims inadequate to survive summary judgment. The court also vacated the grant of summary judgment to Pfizer as to the state law claims. In light of its decision regarding summary judgment, the First Circuit vacated the denial of class certification and remanded the case for further proceedings consistent with its opinion.

 

The First Circuit found that genuine issues of material fact existed as to whether the injury to TPPs was a foreseeable and natural consequence of Pfizer's allegedly fraudulent scheme to promote and sell a prescription drug for “off-label” conditions, whether the allegedly fraudulent scheme caused the TPPs to pay for more prescriptions than they otherwise would have, and whether the prescription was ineffective for the off-label conditions, precluding summary judgment.

 

See: In re Neurontin Marketing and Sales Practices Litigation, 2013 WL 1320407 (C.A.1 (Mass.), April 3, 2013) (not designated for publication) (referred to by the First Circuit as Kaiser Foundation Health Plan, Inc. v. Pfizer, Inc.).

 

See Related Cases:

In re Neurontin Marketing and Sales Practices Litigation, 2013 WL 1320408 (C.A.1 (Mass.), April 3, 2013) (not designated for publication) (referred to by the First Circuit as Kaiser Foundation Health Plan, Inc. v. Pfizer, Inc.).

 

In re Neurontin Marketing and Sales Practices Litigation, 2013 WL 1320403 (C.A.1 (Mass.), April 3, 2013) (not designated for publication) (referred to by the First Circuit as Aetna, Inc. v. Pfizer, Inc.).

 

See also Medical Law Perspectives, March 2012 Report: Off-Label Use of Prescriptions: When is this Medical Malpractice? Is the Pharmaceutical Company Liable for Overpromotion?

 

 

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