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Schachter, Hendy & Johnson, Attorneys At Law

Some Fraud Claims Resurrected in Testosterone MDL

Posted on Mar 15, 2016

An Illinois federal judge on Monday brought back half a lawsuit filed by consumers who say drugmakers didn’t warn about health problems linked to certain generic testosterone replacement therapy drugs, saying that he’d erred in ruling that some allegations were preempted by federal law. 

In reconsidering his November ruling that claims about the drugs were preempted because the companies didn’t have the power to unilaterally strengthen their warnings, U.S. District Judge Matthew Kennelly said that seven of the suit’s 14 claims survived as long as they’re based on allegations of fraudulent off-label marketing. The other seven claims, which dealt mainly with design defects and failure to warn arising from the use of Pfizer Inc.'s Depo-Testosterone and Auxilium Pharmacutiecal Inc.'s Testopel, remained dismissed, as did the consumers’ request for additional discovery.

Originally, when Judge Kennelly determined that Pfizer and Auxilium couldn’t independently change their drugs’ labels, he concluded that all of the consumers’ state-law claims were preempted. In reaching that conclusion, he also believed the consumers to have conceded that their fraud claims would fail. “But upon further review and reflection, the court no longer believes that plaintiffs specifically conceded that their fraud-based claims would fall if the court disagreed with them on the preemption issue,” he said Monday.  Although no circuit court has addressed the issue of whether fraud claims against generic drug manufacturers based on off-label promotions are preempted, other district courts have said such claims are viable, Judge Kennelly said. 

Pfizer and Auxilium had argued that the broad U.S. Food and Drug Administartion labeling rules they have to follow include types of off-label promotions and that other federal courts had dismissed comparable claims as preempted, but Judge Kennelly disagreed. 

“Defendants’ obligations under state fraud law to refrain from falsely promoting their drugs for unapproved uses do not conflict with their obligations under federal law to maintain their warning labels,” he said. “Because the fraud-based claims based on off-label promotion do not make it impossible to comply with both state and federal law, those claims are not preempted.” 

The consumers’ request for additional discovery was denied in November because Judge Kennelly saw the question of preemption as a legal question and determined that more discovery wouldn’t change the outcome. After reconsideration, he held that the consumers have still failed to identify a non-speculative reason for suspecting that additional discovery will uncover the evidence they seek — evidence showing the FDA had previously approved independent labeling changes. 

“If courts were to grant discovery requests based on the speculative possibility that a defendant’s correspondence with a federal agency might shed light on the agency’s interpretation of its own regulations, the issue of federal preemption would have to be postponed to the summary judgment stage in numerous cases,” the judge said, denying their request for further discovery. 

The drugmakers could not be reached for comment Tuesday, but a lawyer for the consumers praised the decision. 

“This ruling will give victims the right to hold pharmaceutical giants responsible for prioritizing company profits over their own safety and the safety of consumers across the country,” Ron Johnson of Schachter Hendy & Johnson PSC, co-lead counsel for the plaintiffs, said in a statement. 

The claims against Pfizer, its subsidiary Pharmacia & Upjohn, and Auxilium, an Endo Pharmaceuticals, Inc. unit, are part of a sprawling multi-district litigation against manufacturers of testosterone replacement therapy drugs, or TRTs. The lawsuits allege that drugmakers invented a disease and used fraudulent and aggressive marketing campaigns to sell TRTs for off-label uses despite known, but intentionally unadvertised, health risks such as an increased risk of a stroke or heart attack. 

Lawsuits filed by health insurers are also included in the MDL, alleging the pharmaceutical companies caused them to pay for medically unnecessary uses of the TRTs.

 

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