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Zafarana v. Pfizer Inc.

July 19, 2010

KATHLEEN ZAFARANA AND BRAD DUMVILLE, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
PFIZER INC. AND PHARMACIA & UPJOHN CO., DEFENDANTS.



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

MEMORANDUM AND ORDER

This case is now before the Court on Defendants' Motion to Dismiss Plaintiffs' Amended Civil Consumer Class Action Complaint (Doc. No. 17). For the reasons set forth below, Defendants' Motion is GRANTED.

Factual Background*fn1

Plaintiffs bring this suit to recover for the actions taken by Defendants in marketing, promoting, and selling twelve of their prescription medications: Lyrica, Geodon, Relpax, DepoProvera, Zyvox, Lipitor, Zithromax, Zoloft, Zyrtec, Viagra, Aricept, and Norvasc. All of these drugs fall under the purview of the Federal Food, Drug, and Cosmetic Act ("FDCA"), which requires that all pharmaceutical drugs receive approval as being safe and effective for the treatment of specific conditions and in specific dosages. Further, the Act limits companies to promoting and marketing their drugs for these approved uses and dosages. Plaintiffs assert, however, that Defendants have a corporate culture that fosters ambivalence to the FDCA as well as a history of violating the Act in order to maximize profits on their approved drugs. For each of the drugs named in their Amended Complaint, Plaintiffs allege that Defendants engaged in a campaign of fraudulent and misleading marketing and advertised these drugs for off-label uses. This conduct culminated in the US Department of Justice's September 2, 2009, announcement that it had settled several qui tam actions brought against Defendants for their marketing of drugs in violation of the FDCA between January 1, 2001, and October 31, 2008, for which Defendants agreed to pay over $2 billion in fines.

Plaintiff Zafarana is a resident of New Jersey and was prescribed Lyrica to treat her idiopathic torticollis. The FDA approved Lyrica on December 30, 2004, as a treatment for diabetic peripheral neuropathy and postherpetic neuralgia. Later, on June 13, 2005, the FDA approved Lyrica for use as an adjunctive treatment of partial onset seizures in adults with epilepsy. Finally, Lyrica has been approved for the treatment of fibromyalgia. Plaintiffs, however, allege that the drug was also promoted for off-label use, including as a treatment for chronic pain, neuropathic pain, perioperative pain, and migraines. In addition, Defendants are alleged to have used unsubstantiated, false, and misleading comparative studies about the efficacy, safety, and cost-effectiveness of Lyrica. Plaintiff Zafarana took Lyrica from at least January of 2006 until January of 2007, and claims that it had no medical benefit for her condition. Further, Plaintiff alleges that she suffered from two side effects of Lyrica: weight gain and blurred vision. Finally, Plaintiff asserts that she paid a significant amount more for Lyrica than she would have paid for other, recognized, treatments for idiopathic torticollis, such as tylenol and stretching.

Plaintiff Dumville is currently a resident of Wisconsin, but in 2001 received treatment for his depression in Pennsylvania, and was prescribed Geodon and Zoloft for this condition. Geodon has received FDA approval for the treatment of schizophrenia and acute manic or mixed episodes associated with bipolar disorder. It can also be used to treat acute agitation associated with schizophrenia. Defendants are alleged, however, to have promoted Geodon for the treatment of depression, bipolar maintenance, mood disorder anxiety, aggression, dementia, attention deficit hyperactivity disorder, obsessive compulsive disorder, autism, and posttraumatic stress disorder. In addition, Plaintiffs charge Defendants with marketing Geodon as being as safe, more effective, and less costly than other antipsychotics, but in doing so materially minimizing and concealing Geodon's serious side-effects, which include increased mortality in certain elderly patient populations and an increased risk of a potentially lethal heart arrhythmia. This marketing is alleged to have taken place from January 1, 2001, through December 31, 2007. Plaintiff Dumville was prescribed Geodon in 2001 to treat his depression. He alleges that he received no medical benefit from taking Geodon and "immediately" stopped taking it due to suffering from "a number of severe side effects," although the exact nature of these side effects is undisclosed. Further, Plaintiff alleges that he could have been prescribed other, less expensive alternatives, including cognitive behavioral therapy, tricyclics, and MAO inhibitors.

Zoloft is an anti-depressant that inhibits the reuptake of serotonin by neurons, and was approved by the FDA in 1991 for the treatment of depression. In February of 2003, it was also approved for acute and long-term treatment of social anxiety disorder. Plaintiffs allege that, in promoting Zoloft, Defendants "paid illegal remuneration for speaker programs, mentorships, preceptorships, journal clubs and [gave] gifts including entertainment, cash, travel, and meals to health care professionals to induce them to prescribe Zoloft." Although Plaintiff Dumville states that he was prescribed Zoloft to treat his depression, he does not state when he was prescribed the medication, for how long of a period he took the medication, whether it had any medical benefit on his condition, or whether he suffered from any side effects due to taking the medication. He does, however, state that generic versions of the drug were available at a substantially decreased price.

Plaintiffs' Amended Complaint also contains detailed allegations about the marketing scheme for each of the drugs named in their Amended Complaint. In relation to Lyrica, Plaintiffs assert that Defendants took actions such as directing their sales representatives to discuss and use promotional materials that made representations as to the effectiveness of the drug in relation to other drugs when there were no peer-reviewed studies supporting these claims, directing sales representatives to contact doctors who did not treat any of the conditions that Lyrica was approved to treat, and using studies and speakers that supported off-label uses of Lyrica. Plaintiffs allege that these marketing strategies were developed at a series of "launch meetings" held from September of 2005 through November of 2005. Plaintiffs point to several specific times and events involved in this scheme, including the following: the September 12 through 15, 2005, formal launch of Lyrica at an Anaheim, California, meeting for the entire Western Region sales force; an October 12, 2005, e-mail to the sales force that authorized the promotion of "secondary endpoints," which were essentially beneficial off-label uses of the drug; the Point of Action meeting held in Indianapolis, Indiana, on October 31 through November 2, 2005, that also encouraged sales representatives to promote Lyrica for unapproved uses; a meeting held at the Technology Park Hilton in Denver, Colorado, on May 9, 2006, at which sales representatives were directed to make comparisons of Lyrica to Keppra, using data from two separate studies, but presenting it in a manner that gave the impression that the two had been the subject of a head-to-head comparison; a March 2006 meeting for newly hired sales representatives held at the Arrowwood facility in upstate New York during which Defendants directed their sales force to compare Lyrica to gabapentin despite a lack of studies supporting this marketing, and that was followed by a promotional pamphlet making such comparisons in September of 2006; and a sales-force training on promoting Lyrica for off-label uses, and specifically on comparing Lyrica to gabapentin, that was conducted at the Galena, Illinois, meeting on May 30 and 31, 2006. Finally, throughout this time period, Plaintiffs assert that Defendants paid significantly increased honoraria and speaking fees to doctors and physician assistants to promote Lyrica for off-label uses.*fn2

Plaintiffs also provide extensive detail regarding the alleged illegal marketing of Geodon. Plaintiffs assert that the scheme to market for off-label uses began in November 2002 at a meeting of Pfizer sales managers at the Disney Complex in Orlando, Florida. Plaintiffs note that a key to this program was the involvement of Dr. Neil S. Kay, who was paid significantly more for his speeches promoting Geodon for off-label uses than Defendants usually paid for promotional speeches. As one example of such a speech, Plaintiffs point to his October 16, 2002, presentation in which he promoted Geodon for off-label uses. Plaintiffs also assert that slides from these speeches were sent to sales representatives for use in selling Geodon. Further, Plaintiffs assert that Defendants made unsubstantiated comparisons between Geodon and Seroquel, Abilify, Zyprexa, and Risperdal. This included an August 17, 2006, voice mail left for over ninety sales representatives, as well as a November 10, 2006, meeting in St. Louis, Missouri, at which allegedly false and misleading promotional materials were passed out to Defendants' sales force.

With regard to Zoloft, Plaintiffs' sole allegation in the Amended Complaint points to a misleading suggestion in Defendants' 2006 Annual Report that Zoloft is broadly indicated for children. Plaintiffs also detail the various FDA approvals and Defendants' associated marketing schemes in connection with the other drugs that are named in their Amended Complaint. We do not find it necessary to catalogue in detail all of these allegations in this Memorandum, however, as neither of the named Plaintiffs raises any allegations relating to these other drugs. These claims will turn on whether Plaintiffs have standing to assert them on behalf of yet-to-be-joined class members and on the outcome of Defendants' separate Motion to Strike Class Action Allegations, making a full consideration of the factual allegations unnecessary at this time.

Plaintiff Zafarana filed this action on September 2, 2009. Defendants filed a Motion to Dismiss on January 15, 2010, and Plaintiff Zafarana then filed an Amended Complaint on February 12, 2010, adding Plaintiff Dumville at that time. Counts I through III are brought under the New Jersey Consumer Fraud Act ("NJCFA"), the Wisconsin Deceptive Trade Practices Act, and the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), respectively, for Defendants' misrepresentations and nondisclosures concerning the safety, efficacy, and cost effectiveness of the medications, and for Defendants' use of kickbacks and other improper inducements to deceive consumers.

Plaintiffs assert that they were harmed in that Defendants' actions caused Plaintiffs to be prescribed drugs that were ineffective for Plaintiffs, that were unsafe and caused Plaintiffs to suffer side effects, and that were more expensive than other reasonable alternatives available to Plaintiffs. Count IV is brought for similar conduct, but states that it is brought pursuant to the consumer protection laws of the remaining 47 states, the District of Columbia, and Puerto Rico. Count V is for "conspiracy/concert of action/aiding and abetting," and seeks to recover for a conspiracy to defraud consumers that lasted from approximately January 1, 2001, through October 31, 2008. Finally, Count VI is a claim for unjust enrichment, and seeks to recover any overpayments that were made by Plaintiffs because they were prescribed Defendants' more expensive drugs.

Standard

Federal Rule of Civil Procedure 12(b)(6) requires a court to dismiss a complaint if the plaintiff has failed to "state a claim on which relief can be granted." In evaluating a motion to dismiss, the court must take all well-pleaded factual allegations as true, but it is not required to blindly accept "a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 283, 286 (1986). Although a plaintiff is not required to plead detailed factual allegations, the complaint must include enough facts to "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

Federal Rule of Civil Procedure 9(b) requires that a party who is alleging fraud "state with particularity the circumstances constituting fraud." This applies both to statutory and common law claims of fraud. Christidis v. First Pa. Mortgage Trust, 717 F.2d 96, 99 (3d Cir. 1983). In determining whether Rule 9(b) applies, the court should look at the factual allegations that are made in support of a particular legal claim, and not whether the claim is explicitly brought as one for fraud. Shapiro v. UJB Fin. Corp., 964 F.2d 272, 288 (3d Cir. 1992). If the plaintiff is unable to plead with specificity because the information is within the defendant's control and requires discovery, the plaintiff must explicitly allege that this information is within the defendant's control and state the facts on which the charge is based so that it is clear to the court that the charge is not baseless. FDIC v. Bathgate, 27 F.3d 850, 876 (3d Cir. 1994) (citing Craftmatic Sec. Litig. v. Kraftsow, 890 F.2d 628, 645 (3d Cir. 1989)).

Discussion

As an initial matter, we think it necessary to clarify that Rule 9(b) does apply to the present proceedings. Plaintiffs are seeking to recover for fraudulent conduct on Defendants' part in engaging in intentionally misleading marketing that would be relied upon by physicians, and, by proxy, their patients, in order to increase Defendants' profits. Plaintiffs, however, certainly have pled with sufficient particularity to satisfy Rule 9(b), as they have included great detail about people, dates, and locations allegedly involved in any fraudulent conduct. Our discussion below will not focus on whether Plaintiffs' Amended ...


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