Canadian imported drugs whose origin was disclosed to end consumers couldn't trigger infringement/false advertising liability

AbbVie Inc. v. Payer Matrix, LLC, No. 23 CV 2836, 2026 WL 1846752 (N.D. Ill. Jun. 26, 2026)

Another round in AbbVie’s fight against Canadian imports.

Payer Matrix contracts with employers or an employer’s pharmacy benefit manager (PBM) or third-party administrator (TPA) to help their members access high-cost specialty drugs not covered under an insurance plan, including by assisting them in applying for drug companies’ patient assistance programs (PAP). PAP eligibility is determined by the drug company; it often requires applicants to be insured or underinsured. AbbVie specifically requires the member’s healthcare provider to complete much of the application, “so Payer Matrix follows up with providers to ensure that the applications submitted are timely.” “Payer Matrix disclosed its involvement in these applications to AbbVie and worked with AbbVie representatives as part of its PAP eligibility investigations.” It also “started a biosimilar program to encourage members and their health care providers to explore biosimilar alternatives to brand-name specialty drugs.”

AbbVie didn’t like that PAP lowered its revenue compared to its co-pay assistance program. It described alternate funding providers (AFPs) like Payer Matrix as a “malignant tumor” that “needed to be dealt with strategically and aggressively.” It therefore changed its PAP eligibility requirements to exclude patients working with Payer Matrix.

AbbVie told representatives to say that AbbVie had “updated [its] eligibility guidelines to respond to changes with [the patient’s] insurance provider,” and to say that AFPs “[c]an cause delays to treatment and be highly disruptive to patients, as well as infringing on benefits intended for patients who are uninsured or underinsured.” AbbVie sent denial letters stating that the denial was because AbbVie “believe[d] [the patient’s] insurance provider is, or is partnering with a third-party company to, inappropriately utilize our program instead of their insurance coverage.” Sometimes its representatives speaking to patients went further, telling patients that Payer Matrix was “committing fraud” or “operating illegally,” and directing them to contact Payer Matrix for assistance in paying for their medications. “AbbVie representatives also responded to telephone inquiries from healthcare providers by telling them that ‘Payer Matrix was causing [ ] problems with coverage,’ that Payer Matrix was acting illegally, and that the providers should not work with Payer Matrix.”

Meanwhile, the Patient Access Network (“PAN”), a charitable foundation to which AbbVie donated approximately $100 million in 2023, began speaking out against AFPs and specifically Payer Matrix. (Um. I’m sure they have plenty of legal advice, and of course I don’t expect our tax enforcers to do anything, but how on earth is it legal for AbbVie to give a bunch of money to a charity that it can write off as a donation and then get the money back from the charity, as expected? They should be allowed to write off the cost of the drugs purchased with AbbVie’s money, but that would be a lot less.)

Payer Matrix sued for various product disparagement/advertising torts as well as antitrust and RICO claims. The RICO claims failed because they were RICO claims. The antitrust claims failed because they were antitrust claims (it was antitrust injury that was missing).

Defamation: Illinois recognizes qualified privileges that protect against liability unless the publication was knowingly false or published while entertaining serious doubts about its truth, or the publication was disseminated beyond the proper parties. Some of AbbVie’s communications were protected by qualified privilege, including statements in the online PAP application, letters to denied PAP applicants, talking points provided to call representatives to respond to questions about PAP denials, resulting statements by call representatives, and some AbbVie statements to healthcare providers. Talking points to help AbbVie’s call representatives respond to questions about the instant lawsuit weren’t.

So, for those, knowledge of falsity or reckless disregard was required, or statements beyond the scope of the privilege—the latter was only alleged for a few statements by call representatives who said that Payer Matrix was acting “illegally” or “committing fraud,” and statements to healthcare providers that they should not work with Payer Matrix and that “all of the other [drug] manufacturers” would be following AbbVie’s lead. “The qualified privilege in this case is justified by the need for AbbVie to help patients and their providers understand their eligibility for the PAP. It is reasonable to conclude that statements that Payer Matrix was acting illegally and that healthcare providers should not work with Payer Matrix go beyond the scope of that need.”

As to plausible knowledge of falsity, the talking points allegedly directed AbbVie call representatives to state that AFPs “[c]an cause delays to treatment and be highly disruptive to patients, as well as infringing on benefits intended for patients who are uninsured or underinsured.” “But, Payer Matrix alleges, the delays were not Payer Matrix’s fault, and AbbVie, whose own benefits investigations were the real reason for the delays, knew it. That is enough to plausibly allege that AbbVie made this statement [and similar ones to a healthcare provider] while knowing that it was false.”

It was also plausible that AbbVie knew the falsity of the statement that it “updated [its] eligibility guidelines to respond to changes with [the applicant’s] insurance provider,” since AbbVie had allegedly worked with insurance plans affiliated with Payer Matrix and understood Payer Matrix’s role “since at least 2021,” and thus there were no AFP-related changes to applicants’ insurance plans in 2023 when the terms changed.

In addition, AbbVie plausibly knew of the falsity of statements by its representatives instructing denied PAP applicants to ask Payer Matrix for help with drug coverage, since it knew that wasn’t Payer Matrix’s role in the system.

But AbbVie’s statements about entities “inappropriately” using the PAP weren’t statements of verifiable fact, and so there couldn’t be scienter (or, of course, liability).

Additionally, AbbVie’s talking points explaining its reasons for bringing this lawsuit were non-actionable opinion: that Payer Matrix “misus[ed] patient assistance programs” and that “AbbVie aims to protect [its] programs and patients from [Payer Matrix’s] exploitative tactics.” These weren’t terms with precise meanings, and the context—explaining the lawsuit—bolstered the “opinion” characterization.

However, accusations that Payer Matrix’s conduct was “illegal” or “fraud” were verifiable in context.

Additional barriers defeated some accusations: Alleged statements by AbbVie that it changed its PAP eligibility requirements due to “changes with [the patient’s] insurance provider” were not “about” Payer Matrix. And alleged statements directing members to ask Payer Matrix for assistance with drug coverage were neither defamatory per se nor defamatory per quod. On their face, they didn’t impute commission of a crime, suggest an inability or lack of integrity in performing employment duties, or prejudice Payer Matrix in its trade (per se). Even if, as argued, they implied that Payer Matrix was responsible for paying drug costs but failed to do so, Payer Matrix didn’t plead a connection between its damages and this statement (per quod).

The remaining statements (illegality, fraud, delays) were defamatory per se, and Payer Matrix also alleged “special damages, including loss of contracts with health plans, cessation of referrals from brokers and [healthcare providers], lost profits, and harm to its reputation in the healthcare and health benefits industries,” including a $26 million drop in revenue from a single broker in 2024.

Tortious interference: It wasn’t independently wrongful to refuse to allow PAP participation by members of insurance plans affiliated with Payer Matrix or publish PAP policies and send denial letters that identified Payer Matrix by name. As for the stuff that survived the defamation screen above, AbbVie argued that it didn’t communicate directly with Payer Matrix’s actual clients. But “AbbVie had reason to believe that its comments would make their way back to Payer Matrix’s clients; it would be unreasonable to expect patients to whom AbbVie allegedly accused Payer Matrix of fraud to keep those accusations from their plan administrators or sponsors.” Payer Matrix also made specific allegations about losing specific clients due to AbbVie’s accusations.

Illinois Consumer Fraud Act: The Illinois Supreme Court recently emphasized that in all ICFA claims, the plaintiff must allege that it was the intended target of the alleged deception. Payer Matrix didn’t allege that AbbVie intended for it to rely on any alleged deception or unfairness, but only that it intended to cause reliance by “Members, Plans, PBMs, and TPAs.” So that claim was dismissed.

Illinois Uniform Deceptive Trade Practices Act Claim: The alleged false statements underlying the claim were not made “in the context of false advertising or promotion or a trademark violation.” Payer Matrix was judicially estopped from arguing that the DTPA covered the statements at issue. It defeated certain of AbbVie’s Lanham Act claims, and DTPA claims based on the same conduct, based on the arguments that (1) the Lanham Act is essentially coextensive with the DTPA, and (2) the accused statements were not made in commercial advertising or promotion. It could not now argue that the DTPA covered more than commercial advertising or promotion.

AbbVie also reasserted trademark/false association and false advertising claims based on allegations that Payer Matrix imported or helped import medicines from Canada.

In 2024, Payer Matrix began facilitating the importation of Canadian AbbVie medications in partnership with RxFree4me and RxFree4me’s affiliated Canadian pharmacies. Its advertising describes RxFree4me as its “vendor partner” and makes clear that the drugs are sourced internationally. For plans that participate, each patient gets a form asking them to authorize Payer Matrix to contact the patient’s prescriber and send the patient’s prescription to RxFree4me. “The form also states that the drugs will be dispensed by foreign pharmacies and asks the patient to appoint Payer Matrix as an agent to facilitate the order, including having the product packaged and delivered.”

If the patient completes the form, Payer Matrix asks the patient’s doctor to send the patient’s prescription to one of RxFree4me’s partner U.S. pharmacies, which then works with a Canadian doctor who writes a new prescription copied from the original. That goes to a Canadian pharmacy for filling and shipment. “Payer Matrix monitors and facilitates the shipments, including by contacting patients to confirm that they received the shipments.”

There are alleged differences between the two countries’ drugs, primarily FDA approval versus approval by Health Canada; packaging instructions with either a US or Canadian number to report side effects; and contact information for either a US or Canadian patient support program. “Some Canadian AbbVie labels include temperature ranges in Celsius, and dosage information for children and adolescents based on their weight in kilograms, whereas the U.S. AbbVie labels list temperatures in Fahrenheit and give weights in pounds.”

AbbVie also alleged that there were differences in how the drugs are shipped: Payer Matrix’s method uses third-party carriers that AbbVie hasn’t approved. “[B]ecause international shipping routes regularly exceed the storage temperature ranges for AbbVie’s medications, AbbVie ships its medicines in sealed, temperature-controlled containers and requires its authorized distributors to follow specific temperature-related guidelines during storage and transport.” However, it was unable to ensure that the shippers used by Payer Matrix comply with these requirements. Also, recalls are region-targeted, so U.S. patients would be alerted to recalls for drugs that they bought in the U.S., but not for drugs that they bought in Canada.

Even assuming that this was a “gray-market” case, AbbVie’s claims failed. Such cases find confusion only if there’s a material difference. Note: They should also fail if the consumer knows what she’s getting, even if it has a material difference! Maybe there can be unfair competition without competition, but there shouldn’t be trademark infringement without confusion.

And indeed, the court concluded that AbbVie needed to allege facts “plausibly showing that consumers would be confused by differences between the foreign and domestic products.” The court concluded, once again, that “[i]t is no secret that RxFree4Me sources drugs from Canada,” and “it should be obvious to Payer Matrix’s members that the imported drugs do not undergo U.S. regulatory processes because they are sourced from Canadian pharmacies.” Plan members fill out an authorization form that represents that the medication will be “dispensed by the foreign Pharmacy.” The form also authorizes Payer Matrix—not AbbVie—to facilitate the international order, “including by packing the Product and delivering it to the patient.”

“The differences that AbbVie cites are exactly the differences that Payer Matrix’s customers would reasonably expect from medications purchased internationally.” Even the shipping quality controls argument was “obviated by the fact that Payer Matrix members seeking non-U.S. drugs authorize Payer Matrix (that is, not AbbVie) to facilitate packing and delivery.” These differences could therefore not be material. (That’s not how I would have said it, but it fits with an empirical definition of materiality: We know that the differences weren’t material to the consumers who ordered the foreign drugs because they knew they were foreign drugs shipped by Payer Matrix.)

So nice to see: “To be sure, many of the cases suggest that the types of labeling, compliance, and quality control issues alleged here can be material in certain circumstances. But none of those cases involve the type of informed purchase at issue here.” There was no allegation here of counterfeiting, and the disclosures were made to end users, not intermediaries.

What about confusion by subsequent purchasers?  “That rationale holds up for the types of extremely expensive durable goods at issue in [cases involving farm equipment], but it does not make sense here, where Payer Matrix’s members purchase consumable medications.”

Nor were the differences as significant as those in Novartis Animal Health US, Inc. v. Abbeyvet Exp. Ltd., 409 F. Supp. 2d 264 (S.D.N.Y. 2005), where, a website sold British-market pet medications to U.S. consumers. “Even assuming the consumers in that case knew that they were purchasing medications intended for the British market, the differences were so significant that U.S. consumers would likely be confused by the British product. For example, the U.S. versions of the pills were flavored, and the British versions were unflavored; the British versions were also sold in different dosages.” Those differences would be material, unlike converting from pounds to kilograms. “And unlike the differences at issue here that are inherent to the differences between the Canadian and U.S. pharmaceutical markets—such as regulation by Canadian rather than U.S. regulatory bodies, and use of the metric system—there is nothing about the British pet medication market that would make a U.S. consumer expect to receive an unflavored medication when they were used to buying flavored medications from the same brand.”