Health plan plaintiffs scored big in a trio of appellate rulings in multidistrict litigation over Pfizer Inc.’s off-label marketing of Neurontin. The U.S. Court of Appeals for the First Circuit affirmed a $142 million verdict against the company and revived class certification plus racketeering and state law claims.
The MDL, which dates to November 2004, followed Pfizer division Warner-Lambert’s May 2004 deal with the government to settle off-label marketing charges. The company pleaded guilty to two mislabeling charges and agreed to pay a $240 million criminal fine and $190 million in civil fines.
In one of the cases, Kaiser Foundation Health Plan v. Pfizer Inc., the court affirmed a February 2011 judgment for Kaiser that included trebling of a $47.4 million verdict to $142 million. The damages were to compensate the health insurer for payments for off-label Neurontin prescriptions. The U.S. Food and Drug Administration approved use of the drug as an anti-seizure agent for epilepsy sufferers.
"Pfizer’s fraudulent marketing plan, meant to increase its revenues and profits, only became successful once Pfizer received payments for the additional Neurontin prescriptions it induced," Chief Judge Sandra Lynch wrote. "Those payments came from Kaiser and other [third-party payors]." Joining her were Senior Judge Kermit Lipez and retired U.S. Supreme Court Justice David Souter, sitting by designation.
In Aetna Inc. v. Pfizer Inc., the court reversed Chief Judge Patti Saris’s rulings for Pfizer. It revived Aetna’s Racketeer Influenced and Corrupt Organizations Act and Pennsylvania Insurance Fraud Statute claims and remanded the case.
Finally, in Harden Manufacturing Corp v. Pfizer Inc., the court reversed Saris’s rulings for Pfizer. It revived self-insurer Harden and other class members’ RICO, New Jersey Consumer Fraud Act and state common law claims. Additionally, it vacated Saris’s denials of class certification and remanded.
"We’re gratified by the court’s affirmance of the verdict in Kaiser’s favor," said David Frederick, a partner at Washington’s Kellogg, Huber, Hansen, Todd, Evans & Figel who argued for Kaiser.
Aetna lawyer Peter St. Phillip, a partner at Lowey Dannenberg Cohen & Hart in White Plains, N.Y., similarly was "gratified that the court applied common sense to the economic realities of the prescription drug business in acknowledging the direct economic relationship between drug companies and the third-party payers they depend upon to pay for their products."
And Thomas Greene of Boston’s Greene LLP, who argued for Harden, said: "We’re looking forward to getting back in front of Judge Saris and moving for class certification of a class of all the small and large health plans."
Several additional firms represented Harden plaintiffs in the appeal, including The Barrett Law Group of Lexington, Miss.; The Dugan Law Firm of New Orleans; Hagens Berman Sobol Shapiro of Seattle; and Lieff Cabraser Heimann & Bernstein of San Francisco.
Mark Cheffo, a partner at New York’s Skadden, Arps, Slate, Meagher & Flom, argued for Pfizer in Aetna, and Washington partner John Beisner in Harden. Kathleen Sullivan, a New York partner at Los Angeles-based Quinn Emanuel Urquhart & Sullivan, argued for Pfizer in Kaiser.
In a written statement, Pfizer spokesman Christopher Loder said the company "continues to believe there was no basis in fact or law" for the Kaiser judgment and awards. Pfizer believes the district court’s dismissals were correct in the other cases and was exploring its appellate options.
"Pfizer believes that doctors and the FDA, and not courts, should make determinations about the efficacy of medicines and whether they should be prescribed to individual patients," Loder said.
Sheri Qualters is a reporter for The National Law Journal, a Legal affiliate based in New York.