Lipitor class action proceeds, in part

Prohias v. Pfizer, Inc., --- F.Supp. 2d ----, 2007 WL 1682515 (S.D. Fla.)

The plaintiffs’ putative nationwide class action alleges that Pfizer engaged in false and misleading advertising of its cholesterol-lowering drug, Lipitor, which is the most widely prescribed statin. This ruling addressed Pfizer’s motion to dismiss the claims of certain individuals and of the Pennsylvania Employees Benefit Trust Fund.

It’s undisputed that Lipitor lowers cholesterol. What’s disputed is whether this has any effect on heart attacks. Lipitor was approved by the FDA in 1996 for patients with primary hypercholesterolemia, an approval expanded to all patients in 1998. Before 2004, the FDA had included that the relationship between Lipitor’s cholesterol-lowering effect and disease rates was unknown. In 2004, Lipitor was first approved for the prevention of cardiovascular disease in certain patients – specifically, the FDA approved labeling that Lipitor reduced the risk of heart attacks in adults without clinically evident coronary heart disease, but with multiple risk factors (e.g., being over 55, smoking, hypertension, low “good” cholesterol, or a family history of early heart disease). Lipitor’s approval did not extend to include claims of reduction in cardiovascular morbidity and mortality.

Pfizer’s ads frequently show pictures of women or the elderly with their cholesterol numbers prominently displayed, warning that “high cholesterol is a risk factor for heart disease.” (Most of the ads explicitly say that Lipitor “has not been shown to prevent heart disease or heart attacks.”) Pfizer also promotes Lipitor to doctors for the prevention of heart disease in women and elderly patients. The plaintiffs argued, however, that there is no scientific evidence that Lipitor reduces the risk of heart disease in women or elderly patients who do not already have heart disease or diabetes. Nonetheless, 34% of survey respondents indicated that they believe that Lipitor has been shown to prevent heart attacks. (So much for that explicit disclaimer.)

Plaintiffs alleged that Pfizer’s misleading advertising creates artificial demand for Lipitor and an artificial price increase, thus causing economic injury to Lipitor purchasers. They did not allege that Lipitor failed to affect cholesterol. Their claims were (1) state-law consumer fraud, (2) unjust enrichment, and (3) negligent misrepresentation.

The individual plaintiffs are 65-year-old men who haven’t been diagnosed with heart disease or diabetes. The Pennsylvania Employees Benefit Trust Fund provides prescription drug coverage to over 270,000 participants and beneficiaries. It alleged that “if not for Pfizer’s deceptive advertising campaign, it would have excluded Liptor from approved formulary schedules, set a lower value in the formulary, or set a higher co-pay obligation.” Because the Fund has some control over the prices it pays for drugs, unlike individuals, the court had earlier ruled that it had a greater ability than individuals to maintain claims for recovery of monies paid.

The court ruled that plaintiffs’ claims based on ads that ran before July 2004 (when Lipitor was approved to prevent cardiovascular disease) were not preempted by federal law or by relevant state “safe harbor” statutes. The plaintiffs argued that the pre-July 2004 ads were inconsistent with Lipitor’s FDA-approved label. Under Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), state law requirements that parallel FDA rules are not preempted. Likewise, Florida and Massachusetts have safe harbor statutes that bar lawsuits challenging conduct specifically permitted by a federal or state regulatory scheme, but plaintiffs allege that Lipitor’s marketing violated federal law.

The post-July 2004 claims, by contrast, were prempted by federal law, were barred by the safe harbor statutes, and were in addition not misleading as a matter of law, because they merely restated the approved labeling. The court acknowledged that the FDA only approved risk-reduction claims as to patients with multiple risk factors for coronary heart disease, and the ad claims weren’t limited to that group, but the ads “derive[d] from, and largely comport[ed] with,” the approved label.

The court expressed “serious doubts” about the chance of success on the remaining claims because most of the ads specifically stated that Lipitor hadn’t been shown to prevent heart disease or heart attacks, and those ads weren’t misleading as a matter of law because they substantially comported with the FDA approved label. Comment: they might not have been false as a matter of law, but can evidence that the ads misled consumers be enough to establish a violation of the law? Maybe there are things you can say on a label that you can’t say in the same way in an ad. (This is especially relevant if Lipitor is only helpful to certain groups. Many years ago, the FTC went after Geritol for advertising that it was useful to combat fatigue, but that was only true if the fatigue was due to anemia and not some other cause, so a lot of tired people bought Geritol in vain.)

The court also dismissed the plaintiffs’ claims for unjust enrichment because they had adequate remedies at law, and also because they received the benefit of their bargain. Lipitor lowered cholesterol. They claim they wouldn’t have bought the drug without the misleading representations, but that was “too little too late” – they received the benefit even if they now do not want the bargain. Given that Lipitor is now approved for reducing heart attacks in elderly men and women with multiple risk factors, and that the plaintiffs had not shown that they lacked multiple risk factors, they even got the entire benefit of their bargain – lower cholesterol and reduced risk of heart disease.

The court refused to dismiss the Fund’s claims for negligent misrepresentation and consumer fraud under Pennsylvania law. The negligent misrepresentation claim concerned Pfizer’s failure to qualify its statements and disclose that there was no evidence of ultimate health benefit from Lipitor. Usually there is no duty to speak absent a fiduciary relationship, but at least one Pennsylvania case holds that huge information disparities between a knowledgeable seller and a lay buyer can require disclosure. The court was skeptical that this rule applied absent a health or safety risk, but it refused to dismiss the complaint at this stage. (I’m not sure why the court didn’t discuss the other instance in which omissions are usually actionable, which is when they are directly relevant to explicit claims – such as when an advertiser fails to disclose the meaning it gives to a term in an ad that consumers are likely to interpret another way.)