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Health Plan Loses in Suit Faulting Eli Lilly's Zyprexa MarketingPa. employee benefit fund alleged anti-psychotic was wrongly prescribed
A health insurance plan that covers state workers has lost another battle to get pharmaceutical companies to reimburse it for anti-psychotic drugs that were allegedly prescribed without medical necessity. A Philadelphia judge dismissed the two remaining claims the Pennsylvania Employees Benefit Trust Fund had brought against Eli Lilly & Co. over its marketing of Zyprexa on Dec. 10. In dismissing the breach of express warranty claim, the judge said the fund didn't directly receive any express warranties from Eli Lilly.
The Legal Intelligencer2009-12-24 12:00:00 AM
The health insurance plan that covers state workers has lost another battle to get pharmaceutical companies to reimburse it for anti-psychotic drugs that were allegedly prescribed without medical necessity.
Philadelphia Common Pleas Court Judge Howland W. Abramson dismissed the two remaining claims the Pennsylvania Employees Benefit Trust Fund had brought against Eli Lilly & Co. over its marketing of Zyprexa on Dec. 10.
In dismissing the breach of express warranty claim, the judge said the fund, which provides health insurance and prescription drug coverage to state employees, didn't directly receive any express warranties from Eli Lilly. The pharmaceutical company only marketed to physicians. Abramson threw out the unjust enrichment claim as well, ruling the fund couldn't show evidence that each prescription of Zyprexa was medically unnecessary or ineffective.
The fund lost a similar case against AstraZeneca in Florida this July. It sued AstraZeneca over its marketing of Seroquel, arguing, as it did in the Eli Lilly case, that the pharmaceutical company marketed the drug for unapproved uses and improperly told doctors it was better than alternatives that were cheaper.
U.S. District Judge Anne C. Conway of the Middle District of Florida ruled the fund did not expressly receive the marketing pitches on Seroquel and was too remote from the alleged harm to have a viable claim. As did Abramson, Conway also pointed out the difficulties in determining, on a transaction-by-transaction basis, whether the company's conduct caused the prescription to be written.
The fund initially sued Eli Lilly, AstraZeneca and Janssen Pharmaceutica in a combined suit filed in Philadelphia in April 2007. It sought recovery for the cost of treatment of injuries caused by Zyprexa, Seroquel and Janssen drug Risperdal. The court severed the claims in May 2008 and ordered the fund to file separate complaints against Janssen and AstraZeneca. The court also dismissed several claims against Eli Lilly, leaving only the breach of express warranty and unjust enrichment claims, according to the opinion.
Abramson's opinion in Pennsylvania Employee Benefit Trust Fund v. Eli Lilly is in response to Eli Lilly's motion for summary judgment on the two claims.
Abramson pointed out in his opinion that the fund never directly pays Eli Lilly for the prescriptions because it outsources those transactions to a pharmacy benefits manager. The fund has never spoken with representatives from Eli Lilly nor has it ever taken possession of Zyprexa, he said. Abramson ruled the fund didn't meet the requirements under the claim to be considered a third-party recipient of the warranty.
"PEBTF fails to direct the court to any evidence indicating whether and how PEBTF itself became apprised of the alleged promises made by Lilly at events targeting physicians," Abramson said. "The case law is clear that the third party recipient of an express warranty must be aware of the specific terms of the warranty in order to sustain a claim for breach of that warranty."
Abramson said the fund can't solely rely upon expert testimony and statistical evidence to prove it was aware of the warranty.
In arguing its unjust enrichment claim, the fund said Eli Lilly promoted the drug for unnecessary uses for which the drug was ineffective at a cost the fund said was higher than safer, effective alternatives, according to the opinion.
Abramson said the theory is based on the concept of medical necessity, which is complex and individualized. Because each patient presents a unique set of symptoms and could respond differently to any given medication, an individualized analysis is needed to determine whether a different drug would have been better.
"Medical necessity cannot be determined solely by examining the market conditions surrounding Zyprexa prescriptions during a specific period of time nor can it be based on expert opinion that Lilly over promoted the drug to doctors," Abramson said. "Rather, individualized proof is required to determine whether Zyprexa was prescribed for a valid medical reason despite any influence exerted by Lilly's alleged promotional misconduct."
Texas-based Bailey Perrin Bailey and Philadelphia-based Cohen Placitella & Roth represented the fund in all three suits. Eli Lilly was represented by attorneys at Pepper Hamilton.
The case against AstraZeneca was moved from federal court in Philadelphia to Florida. The fund filed a case against Janssen in late May 2008 in Philadelphia Common Pleas Court. That case is still ongoing.