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
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.

from Blogger

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