Friday, May 05, 2017

City of Chicago can sue pharmacos for falsely advertising opiods

City of Chicago v. Purdue Pharma L.P., 211 F.Supp.3d 1058 (N.D. Ill. 2016)

The court sustained in part a claim by Chicago against defendant pharmacos, based on their allegedly deceptive and unfair marketing campaigns that served to “reverse[] the medical understanding of opioids so that prescribing opioids to treat chronic pain long-term would be commonplace.” Defendants, among other tactics, allegedly deployed sales reps to doctors and other prescribers to mislead them into believing that the benefits of using opioids to treat chronic pain outweighed the risks and that opioids could be used safely by most patients. The pharmacos allegedly “knowingly disseminated unbranded marketing messages that were inconsistent with information on defendants’ branded marketing materials,” including misrepresentations that that opioids improved function, that addiction risk could be managed, and that withdrawal was easily managed, and misleading minimization of the adverse effects of opioids and overstatements of the risks of NSAIDs.

The court refused to stay or dismiss under the primary jurisdiction doctrine. The court wouldn’t have to determine whether opioids were appropriate for the treatment of chronic, non-cancer pain or whether defendants’ drugs’ labels were accurate, but whether defendants deliberately misrepresented the risks, benefits, and superiority of opioids when marketing them to treat chronic pain, “contrary to ... scientific evidence and their own labels[.]” “Courts are equipped to adjudicate such claims.”

The complaint sufficiently alleged deceptive practices in violation of MCC § 2-25-090, which makes it unlawful for a business to “engage in any act of consumer fraud, unfair method of competition, or deceptive practice while conducting any trade or business in the city,” including “[a]ny conduct constituting an unlawful practice under the Illinois Consumer Fraud and Deceptive Business Practices Act.”  The ICFA requires: “(1) a deceptive act or practice by the defendant; (2) the defendant’s intent that the plaintiff rely on the deception; and (3) the occurrence of the deception during a course of conduct involving trade or commerce.” In an enforcement action, as here, the city didn’t have to allege injury and causation, or proximate harm to any consumer. “A deceptive practice violates the ICFA even if it doesn’t actually deceive or injure anyone ... and the Illinois Attorney General has the power to investigate and enjoin such a practice without a showing of actual loss.”  The same analysis applied to the city’s claims under MCC § 4-276-470(1), which makes it illegal to use deception, fraud, false pretense, or misrepresentation with the intent that others rely on such concealment, in connection with the sale or advertisement of any merchandise.

The city alleged sufficient facts to meet Rule 9(b)’s particularity requirement. It identified which Chicago-area prescribers defendants’ representatives made alleged misstatements to, what those alleged misstatements were, and generally when and where those alleged misrepresentations were made. In addition, the city alleged that defendants closely tracked specific dates and the identities of defendants’ sales representatives who made the detailing visits and such information would be found in discovery.

The city also alleged that defendants engaged in unfair acts and practices to promote the sale and use of opioids to treat chronic pain. An unfair practice (1) offends public policy; (2) is immoral, unethical, oppressive, or unscrupulous; or (3) causes substantial injury to consumers; unfairness “depends on a case-by-case analysis.” For public policy, a practice must violate a standard of conduct contained in an existing statute or common-law doctrine that typically applies to such a situation. The court found that the policy of discouraging drug addiction in Illinois, the “public policy, enshrined in state and federal law, seeking to ensure that pharmaceuticals are marketed and utilized appropriately,” and the public policy against victimization of vulnerable populations for profit, were not specific enough to constitute a relevant public policy.

A practice is immoral, unethical, oppressive, or unscrupulous when said conduct “leaves the consumer ‘little choice but to submit.’ ” The allegations didn’t rise to the level of leaving the prescriber or the consumer with limited alternatives to treat long-term pain.  

“A practice causes substantial injury to consumers if it causes significant harm to the plaintiff and has the potential to cause injury to a large number of consumers.” The alleged $13 million in false claims billed to the city was a significant sum, but the city didn’t allege enough under Rule 9(b) to connect defendants’ alleged deceptive marketing with prescriptions that were covered by the city.  The city was given leave to amend.  Similar analysis applied to the false claims allegations involving getting the city to pay for fraudulent claims for prescriptions for opioids that were not medically necessary or reasonably required to treat chronic pain.

The city alleged that defendants’ misrepresentations were material because if it had known of the false statements, it would have refused to authorize payment for opioid prescriptions to treat chronic pain. But it also alleged that it “paid and continues to pay the claims that would not be paid but for defendants’ illegal business practices,” which contradicts materiality.  Thus, the city didn’t sufficiently allege materiality, as required for a false claims cause of action.

The city would also have to connect its allegations about specific prescribers who heard defendants’ misrepresentations and prescriptions for defendants’ drugs that were paid by the city.  If those were sufficiently connected, the city would still need to allege that those prescribers relied on defendants’ misrepresentations when they prescribed defendants’ drugs. The city argued that reliance was plausibly pled by alleging: (1) the city’s increased spending on opioids; (2) interviews with Chicago prescribers who prescribed opioids paid for by the city and confirmed that they prescribed opioids based on deceptive marketing and patients’ demand; and (3) a sample of claims for opioids that were prescribed by physicians who were subject to defendants’ deceptive marketing and paid for by the city.  Defendants argued that intervening events broke the causal chain, including (1) the prescriber’s independent medical judgment; (2) the patient’s preferences; (3) the patient’s decision to fill a prescription; (4) the patient’s decision whether and how to use the medication; and (5) the city’s decision to cover and reimburse the prescriptions.  Defendants were improperly relying on RICO case law, which doesn’t ever find causation.  For false claims, general tort law principles applied, and a defendant is responsible for “the natural, ordinary and reasonable consequences of his conduct,” which includes the effect of many foreseeable intervening effects such as filling a prescription.  If the city did connect prescribers with prescriptions, the court would likely find adequate allegations of causation.  So too with unjust enrichment claims.

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