The 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.
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