Third Circuit Addresses Issue of Standing in “Off-Label” Pharmaceutical Marketing Litigation

347px-Medical_Journals_As_an_Extension_of_the_Marketing_Arm_of_Pharmaceutical_Companies.pngThe Third Circuit Court of Appeals affirmed the dismissal of a consolidated putative class action lawsuit against pharmaceutical company and its affiliated marketing companies. A trial court had ruled that plaintiffs lacked standing to sue the defendants over alleged off-label marketing of certain drugs. The plaintiffs were consumers, whose doctors allegedly prescribed the medications for off-label uses; and third-party payors (TPPs), including an insurance company and several unions. In In re: Schering Plough Corp. Intron/Temodar Consumer Class Action, the Court of Appeals ruled that the plaintiffs had not shown a sufficient connection between the defendants’ marketing and the actual prescriptions or the alleged injuries. The case demonstrates not only an aggressive posture by the defendant, but also the difficulty of asserting a class action in drug-related injury cases.

The U.S. Food and Drug Administration (FDA) regulates prescription medications, approving drugs for certain uses and prohibiting advertising for unapproved, or “off-label,” uses. It does not, however, regulate doctors, and therefore has no jurisdiction over how doctors prescribe approved drugs. The defendant, Schering-Plough Corporation (Schering) manufactured several oncology and hepatitis drugs approved by the FDA. A 2001 FDA investigation found that Schering had promoted off-label uses of these drugs. Schering eventually pleaded guilty to one count of conspiracy to make false statements to the government and entered into a settlement agreement, paying a $180 million fine in 2007. It also paid $255 million to settle civil fraud claims with Medicare, Medicaid, and the Veteran’s Administration.

Lawsuits against Schering by consumers and TPPs soon appeared all over the country, claiming that Schering’s misconduct caused doctors to prescribe their drug for off-label, and therefore ineffective, uses. The Judicial Panel on Multi-District Litigation consolidated the cases and moved them to the District of New Jersey. The named plaintiffs filed a consolidated class action in December 2007 alleging violations of federal and state Racketeer Influenced and Corrupt Organizations (RICO) acts, state consumer fraud laws, and various common law claims. The TPPs claimed that they had to pay for both the ineffective prescription and a subsequent effective one, while the consumers claimed injuries and medical expenses. The District Court dismissed the entire suit in July 2009 for lack of standing and failure to state a claim, holding that the complaint did not include enough facts connecting the alleged injuries to the alleged misconduct.

That September, one consumer and four TPPs filed separate amended complaints, each asserting putative nationwide classes. Each complaint alleged various acts of fraud and misrepresentation regarding the oncology and hepatitis drugs, intended to induce physicians to prescribe them for off-label uses. In June 2010, the court dismissed the TPP complaint for failing to show standing to sue, specifically by not sufficiently pleading injury and causation. It dismissed the consumer complaint for not showing causation between the alleged misconduct and injury.

The Third Circuit affirmed the trial court’s dismissal of both complaints. finding that neither the consumer nor the TPPs had standing to sue. Essentially, the court held that neither group of plaintiffs could demonstrate that Schering’s marketing actually caused any doctors to prescribe any of those drugs for those off-label uses. Without that causal connection between the alleged act of misconduct and the alleged injury, there was no standing.

The Maryland pharmacy error attorneys at Lebowitz & Mzhen can assist you if you have been injured by drugs prescribed, dispensed, or administered incorrectly. Contact us today online, or call (800) 654-1949 to see if you may recover damages.

Web Resources:

Opinion (PDF), In Re: Schering Plough Corp. Intron/Temodar Consumer Class Action, U.S. Court of Appeals for the Third Circuit, May 16, 2012 (source)

More Blog Posts:

CEO of Fitness Website Pleads Guilty to Labeling “Drugs” as “Nutritional Supplements,” Pharmacy Error Injury Lawyer Blog, April 27, 2012
Pharmaceutical Company Fined $1.1 Billion Over Deceptive Drug Marketing, Pharmacy Error Injury Lawyer Blog, April 12, 2012
FDA Weighs in on Marketing Pharmaceuticals via Social Media, Pharmacy Error Injury Lawyer Blog, January 5, 2012
Photo credit: ‘Medical Journals As an Extension of the Marketing Arm of Pharmaceutical Companies’ by Margaret Shear, Public Library of Science [CC-BY-2.5], via Wikimedia Commons.

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