Although it is not a drug/device case (if it were, we would have discussed it before now), the recent Supreme Court decision in Gallardo v. Marstiller142 S. Ct. 1751 (2022), raises some interesting issues that attorneys defending personal injury action of any sort should consider.  Settlement of any personal injury case involving a

This post is from the non-Dechert side of the blog.

Our latest Zantac litigation decision is not from the Florida MDL, but rather a standalone case in Maryland − Mayor & City Council of Baltimore v. GlaxoSmithKline, LLC, 2022 WL 537004 (Md. Cir. Jan. 28, 2022).  It’s a split decision, and depending on which

The Xarelto personal injury claims settled in 2019 after six bellwether trials all ended with defense verdicts.  What remained, until now, were several third-party payor (health insurers, “TPPs”) actions that have been dormant for almost six years.  Despite the passage of time, the motions before the court in 2021 were to dismiss under Rules 12(b)(6)

In this blogger’s family, Monopoly is cutthroat.  No freebies.  No passes.  I own it, you land on it – you pay.  Can’t pay, take a mortgage.  We play to bankruptcy.  Being from New Jersey we are partial to the original based on the streets of Atlantic City.  But we’ve also owned the Star Wars edition,

This post comes solely from the Cozen O’Connor side of the blog.

The MDL court in the Testosterone Replacement Therapy (“TRT”) litigation involves more than just individual product liability cases. It includes a class action. In particular, a single named plaintiff, Medical Mutual of Ohio (“MMO”), seeks to represent a class of third-party payers

We’ve previously written several posts (not recently) on Medicare secondary payer (“MSP”) issues – which we characterized as “boring.”  The recent MSP decision, Humana Insurance Co. v. Paris Blank LLP, 2016 WL 2745297, 187 F. Supp.3d 676 (E.D. Va. 2016), is a lot less boring.  That’s because of the defendant – a plaintiff-side law firm.

And the law firm lost.

What’s going on? To start with, in addition to the government itself, certain private entities, “Medicare Advantage Organizations” (“MAO”) (abbreviations are ubiquitous in this area) are allowed to bring suits to recover as MSPs (that was what one of our earlier posts was about).  The MSP statute is quite broad as to who can be legally liable for not ensuring that Medicare is treated as a secondary payer:

any or all entities that are or were required or responsible (directly, as an insurer or self-insurer, as a third-party administrator, as an employer that sponsors or contributes to a group health plan, or large group health plan, or otherwise) to make payment with respect to the same item or service (or any portion thereof) under a primary plan.

42 U.S.C. §1395y(b)(2)(A)(iii). Recovery in an amount double the actual Medicare outlay is available in litigated cases. Id.

In our neck of the woods (PA & NJ, anyway), a MAO’s ability to sue as if it were the government is already established. In re Avandia Marketing, Sales Practices, & Products Liability Litigation, 685 F.3d 353 (3d Cir. 2012).  (We note that our CA blogger would view this issue differently, see Parra v. PacifiCare of Arizona, Inc., 715 F.3d 1146, 1154 (9th Cir. 2013)).  So the fact that Humana held that an MAO had standing to sue, 2016 WL 2745297, at *4, would not have resulted in this post.

What interests us is the holding that a lawyer and his law firm – thankfully, a plaintiff law firm − can be an “entity” “responsible (directly . . . or otherwise)” for making a MSP payment.  The allegations in Humana were not kind to the defendants.  They represented a plaintiff in an auto accident.  Supposedly, they received a one settlement check made out jointly to it and the plaintiff MAO, but “ultimately deposited the check without [the MAO’s] endorsement.”  Id. at *2.  Allegedly, certain other settlement checks “from several insurance companies” were also received and deposited, without joint the joint payor issue. Id. All told, the settlements totaled $475,600.  Id.

Continue Reading Medicare Secondary Payer – A Lot Less Boring Now

July in D.C. is hot and sticky.  When scorching day follows scorching day, area residents look forward to evening thunderstorms, not just to water otherwise thirsty lawns and gardens but to cool things down.  Lightning can be frightening—that the words almost rhyme is no accident—but it seems to always accompany our rain during the swampiest part of our summers.

The decision in Sidney Hillman Health Ctr. v. Abbott Labs., No. 13 C 5865, 2016 U.S. Dist. LEXIS 84662 (N.D. Ill. June 29, 2016), is not as dramatic as a flash of lightning or as stirring as a thunderclap.  To us, though, it provides some welcome relief and suggests that a larger storm is coming for cases like this.  (Like awkward cocktail party banter, we will keep our discussion of weather brief.) Hillman is one of many third payor cases based on alleged off-label promotion of a prescription drug.  It is of the variant where benefit plans principally used RICO as the vehicle to try to get damages for past payments for members’ prescriptions for unapproved indications.  We sometimes lump such cases together with those using the False Claims Act or various state fraud statutes to try to recover for amounts paid as a result of allegedly improper marketing, often with large fines or a damages multiplier in the mix.  Sometimes these cases are class actions on behalf of lots of payors around the country.  Sometimes they are pursued by governmental entities, which occasionally outsource the work to contingency fee lawyers.  In their various forms, these TPP cases have caught our attention.  We have been particular perturbed by some courts’ blithe acceptance of collective proof of causation in these cases, the point of which is to lump together as many purported actionable claims or implicated payments as possible without having to generate proof as to why each prescription was written or paid.  We have also questioned whether statutes like RICO (enacted to combat organized crime) or the False Claims Act (enacted to combat war profiteering) are being stretched beyond their legitimate bounds to accommodate these cases, simply because the defendants are unpopular or the coffers of the governmental or benefit plan plaintiffs need an infusion of cash.

Many of these cases have also been predicated on the idea that promotion of off-label use is inherently wrong.  Over the last year or so, largely because of Amarin, the underpinnings of that idea have been eroding fast.  The First Amendment’s prohibition on laws “abridging the freedom of speech” applies to commercial speech, including commercial speech by and on behalf of drug companies about uses of their products that are off-label.  If truthful statements about unapproved uses of the drug—like those that accurately represent the information on risks and benefits and make clear what the label says—are protected, then civil liability should not be based on them.  That would go for cases under the FCA, RICO, or various state laws—with the Fourteenth Amendment making the First Amendment applicable to states.  To our eyes, some of the notorious cases imposing massive liability for alleged off-label promotion of prescription drugs seem to have relied in large part on vilifying truthful off-label promotion.  (Keep in mind that even pre-Amarin FDA regs allowed drug companies to provide information about off-label uses under certain circumstances without it being considered “promotion.”)  So, a First Amendment storm is brewing for these cases, both in terms of the precedential value of decisions in cases that did not differentiate between truthful and false statements about off-label uses and the viability of complaints drafted with the expectation that no such differentiation would be necessary.

This brings us back to Hillman, which had an interesting litigation history of its own.  It followed FCA and related actions based on alleged off-label promotion by the manufacturer of a prescription seizure and migraine medication.  A large settlement of civil and criminal claims, with attendant press coverage, followed.  The Hillman plaintiffs filed a putative class action over a year later, alleging overpayments for off-label prescriptions between 1998 and 2012.  The trial court dismissed on statute of limitations and the Seventh Circuit reversed.  The plaintiffs amended and the defendants moved to dismiss.  Along the way, there have been a number of product liability claims with the same drug, complete with off-label promotion allegations and preemption of some warnings claims.  (As an aside, it would be interesting if some of the alleged misrepresentations about safety in the Hillman complaint were about the same issues about which it would have been impossible for the defendants to warn.  There is no preemption for RICO claims, because preemption only applies to state law, but it should be hard to misrepresent a drug’s safety by accurately repeating the contents of a label that could not have been changed as to a particular risk.)

Continue Reading Another Off-Label Promotion Third Party Payor Case Lacks Causation

In third party payor litigation over prescription medical products, we have often marveled at the causation arguments that plaintiffs have offered and the willingness of some courts to accept collective proof over what really should involve individualized proof. Like here, here and here. (This same dynamic plays out when governmental entities seek reimbursement for such products too.) Usually, though, the plaintiffs allege that the manufacturer’s fraud—under whatever particular statutes or headings it is pursued—was unknown to them during the time for which they seek damages for amounts paid for the product and that the damages stopped once they found out. In Teamsters Local 237 Welfare Fund v. Astrazeneca Pharms. LP, No. 415, 2015, 2016 Del. LEXIS 236 (Del. Apr. 12, 2016), the plaintiff payors were undone by their concession that they knew about the alleged fraud and kept paying for the drug at issue anyway. Based on its self-described common sense analysis, the Delaware Supreme Court affirmed the dismissal for lack of causation without weighing in on the Superior Court’s rejection of causation where individual physicians made individual decisions about what to prescribe. This is a good result, but we are concerned about the implications for the practices of payors who seem increasingly interested in signing up with contingency fee lawyers to sue medical product manufacturers. (In case you were wondering, that was a teaser, designed to get you to read all the way to the end of the post.)

The basic facts are that the plaintiff filed a purported nationwide class action on behalf of third-party payors in Delaware state court in 2004, alleging that the defendant violated state consumer fraud laws by falsely marketing Nexium as being more effective than Prilosec, an older product with allegedly one-half of the same active ingredient per dose. Adding some facts omitted in the opinion, the initial NDA for Prilosec had been approved in 1989 (under the name Losec) and lost exclusivity in 2001, around which time FDA approved the NDA for Nexium, which had an enantiomer (here, the left hand chiral image) of the Prilosec’s active ingredient as its active ingredient. The indications for both drugs were expanded through the years, with Prilosec going over-the-counter in 2015. These drugs together accounted for a large chunk of the prescriptions written for heartburn, gastroesophageal reflux disease, and related complaints. Plaintiffs claimed that the development of Nexium and the marketing campaign after its introduction were designed to get the defendant paid a high price for its newer branded product instead of money going to pay for cheaper generic versions of the older product. They claimed they had been harmed by paying for the Nexium prescribed by physicians for the patients participating in their plans. The same group of lawyers apparently filed other “essentially identical class actions” with different sets of named plaintiffs, including one in Delaware federal court that resulted in the dismissal of a New York consumer fraud claim. Ignoring some history and details much like the plaintiffs ignored the marketing for Prilosec over the last fifteen years and the difference between a racemic mixture and an enantiomer, the Delaware state court action woke up from a long slumber in 2014 with its second amended complaint asserting the same claims the federal court had disposed of a few years before.

The Superior Court first determined that the law of New York, where the named plaintiffs were based, applied instead of the law of Delaware, where the defendant was based, or the laws of thirteen other states. Id. at *9. The court found that plaintiffs had not alleged the causation required for a consumer fraud claim: the “purported chain of causation that runs from the allegedly deceptive advertisements that may have influenced the decisions of individual doctors to prescribe a drug to their patients to causally affect the payer unions in this case is simply too attenuated,” as the doctors would be “presumed to go beyond advertising medium and use their independent knowledge in making medical decisions.” Id. at **9-10. We certainly like this reasoning, which would apply to a bunch of these cases. We also like that the court did not give plaintiffs a fourth chance to frame a complaint that stated a claim.

Continue Reading TPPs Fail to Put Their Money Where Their (Litigation) Mouth Is and Lose

Here is another guest post, one expressly not emanating from the Dechert side of the blog. Rather it is written by Reed Smith’s Elizabeth Graham Minerd.  As always with our guest posts, she is entitled to all the credit from her shared wisdom, as well as any blame.  So, without further ado:

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I recently had a partner ask me:  Will the court consider our client’s actions (not in any FDA safe harbor) to be off-label promotion—i.e., were their actions “promotional” in nature even though they were not advertising the product for off-label uses.  After extensive research, I returned to him more or less empty-handed.  I explained the arguments for and against our client’s actions being considered “promotion” of off-label uses, but I could not provide a definitive answer because there was simply no case law on point.
Over the last several years, there have been numerous cases discussing the legal ramifications of promoting drugs or medical devices for off-label uses from seemingly every angle. Indeed, this blog has a handy tag “Off-Label Use” that discusses many of these cases. But this basic question—what counts as off-label promotion?—has largely gone unanswered.  Recently, however, the Court in United States ex rel. King v. Solvay S.A., 2016 U.S. Dist. LEXIS 14804 (Feb. 8, 2016 S.D. Tex.), laid out a few examples of what is not off-label promotion.