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The Commonwealth Court yesterday dismissed the state’s lawsuit accusing 13 pharmaceutical companies of a price-inflation scheme but gave the state attorney general leave to submit an amended complaint with more specific pleadings against all defendants but one. The court dismissed the Japanese pharmaceutical firm Takeda Chemical Industries Inc. from the action entirely. Takeda had filed preliminary objections to being sued in Pennsylvania, where it doesn’t directly market or distribute products. A Takeda subsidiary in the United States, TAP Phar-maceutical Products Inc., is another named defendant in the case. Considering all the defendants’ preliminary objections, a unanimous seven-judge panel of the Commonwealth Court found that the complaint filed last year by then -Attorney General Jerry Pappert lacked the “specificity” required by the state rules of civil procedure. “The defendants could not be expected to defend adequately claims against them when the complaint fails to aver facts necessary for that defense,” President Judge James Gardner Colins wrote in Commonwealth of Pennsylvania v. TAP Pharmaceutical Products Inc. The court gave the Attorney General’s Office – now led by Tom Corbett – 30 days to submit an amended complaint. No one from that office was available for immediate comment yesterday, but a spokeswoman issued a brief statement, saying the attorney general would remedy the court’s technical concerns with the complaint by filing a new one “promptly.” Lawyers at the firm of Kline & Specter, which is handling the litigation in conjunction with the Attorney General’s Office, did not return calls for comment. Pappert last March sued AstraZeneca PLC, Bayer AG, GlaxoSmithKline PLC, Pfizer Inc., Amgen Inc., Schering-Plough Corp., Bristol-Myers Squibb Co., Johnson & Johnson, Baxter International Inc., Aventis Pharmaceuticals Inc., Boehringer Ingelheim Corp. and Dey Inc. – in addition to Takeda and TAP. Colins said the complaint asserts only “generally” that the pharmaceutical companies engaged in unfair and deceptive marketing techniques and conspiracies that caused Pennsylvania consumers and state health agencies to be overcharged for their drugs. The court needs more facts, Colins explained. “We remind the plaintiff that Pennsylvania is a fact-pleading, rather than notice, state,” he wrote. “Thus, the pleadings should conform to the elements necessary to state a cause of action.” To consider claims of unjust enrichment, fraudulent concealment, civil conspiracy and unfair trade practices, the court and state law require details, Colins said. For example, although the plaintiff “submitted documentary evidence that substantiates its [fraud] claims, the pleadings fail to reflect the information contained in those documents,” Colins wrote. “While some of the specific instances of the alleged misconduct may need to await discovery, the complaint nevertheless fails to discriminate with regard to the conduct of each defendant, as to the manner of fraud, and their drugs.” Among the details the court asked for in its opinion were descriptions of the alleged injured parties, the relationships between parent companies and subsidiaries, and the nature of the transactions of which the plaintiff complained. Several of the defendants have either pleaded guilty to or settled federal criminal charges of unlawful marketing and sales practices, but the state alleges its consumers have not been fully compensated by these defendants or the others that haven’t faced criminal charges related to the practices. Specifically, Pappert’s complaint attacks the defendants’ practice of seeking market advantage by offering the incentive to medical care providers of paying a lower acquisition price for pharmaceutical products than the higher “average wholesale price” that is set by defendants and used by the providers when billing consumers and state agencies for the drugs. The complaint asserts that the defendants fraudulently concealed the allegedly improper practice and that the state and Pennsylvania consumers should be compensated for their losses. “The defendants have pointed out various aspects of the complaint that require embellishment in order to satisfy [Rule 1019(a) of Civil Procedure]: (1) how have other proceedings failed to compensate the commonwealth fully; (2) which manufacturers used certain methods to achieve certain reductions in acquisition costs, and which drugs were involved; (3) how the defendants’ prices were not legally permissible and how the defendants misled the plaintiff and those it represents into believing that they were paying a legally permissible price,” Colins wrote. The court did not address the defendants’ challenge to the state’s standing to file the action or other preliminary objections. Counsel for Takeda, Anthony C. Porcelli of Jenner & Block in Chicago, declined to comment on the decision yesterday. Calls to other defense counsel were not returned. (Copies of the 23-page opinion in Commonwealth of Pennsylvania v. TAP Pharmaceutical Products Inc. , PICS No. 05-0114, are available from The Legal Intelligencer . Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information. Some cases are not available until 1 p.m.)

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