Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Actiq Sales and Marketing Practices Litigation

May 22, 2009

IN RE: ACTIQ SALES AND MARKETING PRACTICES LITIGATION


The opinion of the court was delivered by: Tucker, J.

MEMORANDUM AND ORDER

Presently before this Court is Defendant's Motion for Judgment on the Pleadings as to the Racketeer Influenced and Corrupt Organizations ("RICO") Counts of Plaintiffs' First Amended Consolidated Class Action Complaint. For the reasons stated below, this Court will grant Defendant's Motion.

BACKGROUND

Plaintiffs bring this class action to recover damages for payments to Defendant Cephalon, Inc. as a result of Defendant's allegedly unlawful marketing of the drug Actiq. Plaintiffs Employers Mutual Casualty Company, EMCASCO Insurance Company, Union Insurance Company, and Indiana Carpenters Welfare Fund are insurers responsible for paying all or a portion of costs of prescription drug purchases by their members and beneficiaries. Am. Compl. ¶¶ 10-11. Plaintiff Pennsylvania Turnpike Commission provides group medical benefits for eligible employees as a party to a contract, issuer of a policy, or sponsor of a plan. Am. Compl. ¶ 12). Plaintiffs all allege that through various contracts, policies, or plans, they paid some portion of the cost for Actiq prescriptions during the relevant time period.

Defendant Cephalon is a pharmaceutical company that manufactures and sells several prescription drugs, including Actiq. Am. Compl. ¶ 13. Actiq is a prescription drug approved by the United States Food and Drug Administration ("FDA") for the purpose of managing breakthrough cancer pain in patients with malignancies who are already receiving and tolerant to opoid therapy for their underlying cancer pain.

Plaintiffs allege that Actiq is a potent painkiller that was FDAapproved solely for cancer patients whose pain could not be managed with other drugs. Am. Compl. ¶ 2. Plaintiffs further allege that because of Actiq's high potential for abuse, the FDA expressly required Defendant to display a warning that the drug was not approved for any off-label uses. According to Plaintiffs, Defendant was aware that the cancer community was a limited market for Actiq, and consequently, for financial gain, Defendant pursued a deceptive marketing scheme which included marketing to a wide range of practitionersfor off-label uses such as back pain, head aches, and migraines. Plaintiffs aver that the unlawful, off-label marketing of Actiq caused sales to increase from $15 million in 2000 to $471 million in 2006. Am. Compl. ¶ 34. Plaintiffs allege that Defendants encouraged general practitioners to prescribe Actiqeven though this drug was inappropriate, medically unnecessary, and not FDA approved for treatment of these conditions. Am. Compl. ¶ 41-46. Plaintiffs further allege that as a result of unlawful marketing activities, Defendant pled guilty to violating the Federal Food, Drug and Cosmetic Act, and agreed to pay a $425 million settlement resulting from Federal and State Medicaid Claims. Am. Compl. ¶ 62. Plaintiffs contend that class members were injured by payment of excessive prescription costs for off-label uses of Actiq, and now seek to recover excess payments.

In response, Defendant argues that Plaintiffs' claims overlook several intervening decision-makers, whose acts affect Plaintiffs' alleged injuries. Examples of the decision-makers referenced by Defendant are physicians with the independent medical judgment regarding what the appropriate course of treatment is for an individual patient, the judgment of pharmacy benefit managers to cover Actiq in their plan, and Plaintiffs' policies regarding coverage and reimbursement of Actiq prescriptions.Essentially, Defendant asserts that the various intervening decision-makers negate causation, and therefore Defendant's liability.

Plaintiffs filed three separate complaints in October, November, and December of 2007, all alleging that Defendant's devised an unlawful marketing scheme and asserting claims for violation of consumer-protection statutes and unjust enrichment. Defendant moved to dismiss the complaints and this Court denied the motions, and consolidated the three cases. Plaintiffs filed their first Amended Consolidated Class Action Complaint on May 16, 2008, which reasserts the allegations in the original complaints and raises two new claims RICO claims. Defendant moved for judgment on the pleadings as to the RICO counts pursuant to Federal Rule of Civil Procedure 12(c) on August 29, 2008.

LEGAL STANDARD

A motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) is subject to the same standard of review applicable to a motion to dismiss under Rule 12(b)(6). See Turbe v. Gov't of Virgin Islands, 938 F.2d 427, 428 (3d Cir. 1991). In considering a motion to dismiss under Rule 12(b)(6), the Court must accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, viewing them in the light most favorable to the plaintiff. Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d. Cir. 2005). A Rule 12(b)(6) motion should be granted only if it appears to a certainty that no relief could be granted under any set of facts that could be proved. Id.

Thus, the allegations in the complaint must transcend the speculative, and instead, state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1965, 1969, 1974 (2007). Applying the plausibility standard, a court may accept as true only well-pleaded allegations, which does not include bald assertions or legal conclusions. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 2007).

DISCUSSION

18 U.S.C. § 1962(c) makes it unlawful for any person employed by or associated with any enterprise to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity. In order to state a RICO claim under 18 U.S.C. § 1962, a plaintiff must first demonstrate statutory standing under RICO. A civil RICO plaintiff is required "to make two related but analytically distinct threshold showings: (1) that the plaintiff suffered an injury to business or property; and (2) that the plaintiff's injury was proximately caused by the defendant's violation of 18 U.S.C. § 1962." Maio v. Aetna, Inc., 221 F.3d 472, 483 (3d Cir. 2000). If statutory standing is met, plaintiff must then allege facts to establish the following: (i) the existence of an enterprise engaged in or affecting interstate commerce; (ii) that the defendant was employed by or associated with the enterprise; (iii) that the defendant participated, directly or indirectly, in ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.