A federal judge in Florida tossed a consolidated case brought by several union health and welfare benefit funds that claimed they were tricked into paying hundreds of millions of dollars for the drugmaker's Seroquel anti-psychotic as a result of an alleged off-label marketing campaign that misrepresented safety and effectiveness.
What's significant about this decision by US District Court Judge Anne Conway is that the funds claimed AstraZeneca and Parexel violated the federal Racketeer Influenced and Corrupt Organizations statute, otherwise known as RICO, which can result in paying treble damages, plus legal fees. You may recall that US District Court Judge Jack Weinstein recently ruled that third-party payors can proceed with a class-action lawsuit that claims Lilly violated the RICO statute in marketing Zyprexa (back story).
And in reaching his decision, Weinstein ruled Lilly may be held responsible if doc relied on the drugmaker's alleged misrepresentations, paving the way for a class-action suit. Conway, however, made a disinction by ruling that reliance on representations about a drug can vary. In her view, each doc would have to be questioned separately to determine their reasons for prescribing Seroquel and the extent to which their decisions were influenced by AstraZeneca's alleged misrepresenations (here is the ruling).
"In the context of this case, establishing that plaintiffs’ injuries were caused by defendants' misconduct would require an inquiry into the specifics of each doctor-patient relationship implicated by the lawsuit," Conway wrote. "Furthermore, as Defendant AstraZeneca points out in its motion, this individualized inquiry would likely have to be conducted with regard to each consumer purchase transaction or third-party reimbursement payment made over the last approximately ten years."
As a result, one expert says Conway's ruling creates a split with Weinstein's decision in Zyprexa, which should hearten drugmakers fearing RICO class-action lawsuits from insurers and funds.
"These two decisions are both at the trial court level, so they're less significant than appellate decisions would be," Mark Herrmann, an attorney at Jones Day who defends drugmakers, tells us. "But they reflect a high-stakes game, because they speak to whether insurance companies can bring RICO class actions by saying that drug companies misrepresented the benefits of their drugs, increasing the insurers' payments."