Sidney Hillman Health Ctr. of Rochester v. Abbott Labs. & Abbvie Inc.

Decision Date29 June 2016
Docket NumberNo. 13 C 5865,13 C 5865
Citation192 F.Supp.3d 963
Parties SIDNEY HILLMAN HEALTH CENTER OF ROCHESTER and Teamsters Health Services and Insurance Plan Local 404, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs, v. ABBOTT LABORATORIES AND ABBVIE INC., Defendants.
CourtU.S. District Court — Northern District of Illinois

192 F.Supp.3d 963

SIDNEY HILLMAN HEALTH CENTER OF ROCHESTER and Teamsters Health Services and Insurance Plan Local 404, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs,
v.
ABBOTT LABORATORIES AND ABBVIE INC., Defendants.

No. 13 C 5865

United States District Court, N.D. Illinois, Eastern Division.

Signed June 29, 2016


Catherine Jeanne Osuilleabhain, Edmund S. Aronowitz, Adam J. Levitt, Grant & Eisenhofer P.A., Chicago, IL, James J. Pizzirusso, Kristen M. Ward, Hausfeld

192 F.Supp.3d 964

LLP, Washington, DC, James J. Sabella, Grant & Eisenhofer P.A., Frank R. Schirripa, Hach Rose Schirripa & Cheverie LLP, New York, NY, Mary S. Thomas, Grant & Eisenhofer P.A., Wilimington, DE, for Plaintiffs.

William F. Cavanaugh, Jr., Adeel Abdullah Mangi, Jonah Moses Knobler, Niji Jain, Scott C. Caplan, Patterson Belknap Webb & Tyler LLP, New York, NY, Jonathan Richard Lahn, Kirkland & Ellis LLP, Chicago, IL, for Defendants.

OPINION AND ORDER

SARA L. ELLIS, United States District Judge

Sidney Hillman Health Center of Rochester ("Hillman") and Teamsters Health Services and Insurance Plan Local 404 ("Local 404," and collectively with Hillman, the "Funds") are multi-employer benefit plans and health services funds that provide health benefits, including prescription drug coverage, to their members. The Funds seek to represent a nationwide class of such third-party purchasers or third-party payors ("TPPs") who from 1998 to 2012 reimbursed and paid all or some of the purchase price for Depakote, a drug developed and initially marketed by Abbott Laboratories and later by AbbVie, Inc. (collectively, "Abbott"), for indications not approved by the Food and Drug Administration (the "FDA").1 The Funds also seek to represent subclasses of TPPs in New York and Massachusetts. The Funds bring claims for violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c), conspiracy to violate RICO, 18 U.S.C. § 1962(d), violation of the New York deceptive business practices act, N.Y. Gen. Bus. Law § 349, and unjust enrichment under New York and Massachusetts law.2 Abbott has moved to dismiss the amended class action complaint. Because the Funds have not adequately alleged proximate cause under RICO, the Court dismisses the RICO claims. With the dismissal of the federal claims, the Court declines to address the state law claims, deferring consideration of Abbott's arguments on these issues until the Funds have adequately alleged a basis for the Court's subject matter jurisdiction.

BACKGROUND3

Since 1983, the FDA has approved Depakote (divalproex sodium), which is sold and marketed by Abbott, for the treatment of epileptic seizures, acute manic or mixed

192 F.Supp.3d 965

episodes associated with bipolar disorder, certain absence seizures for adults and children over ten years old, and adult migraine prevention and prophylaxis. The FDA has not approved Depakote for the treatment of dementia, including agitation associated with dementia, bipolar depression, schizophrenia, attention deficit hyperactivity disorder ("ADHD"), narcotic drug withdrawal, or any other uses.

Nonetheless, Abbott has marketed Depakote for such unapproved "off-label" uses. To do so, it has used intermediary marketing firms, allegedly independent entities, paid physician spokespeople, as well as its own internal sales divisions. These efforts resulted in dramatically increased sales of Depakote, reaching $1.5 billion in 2007.

Abbott established and controlled three enterprises to promote off-label Depakote uses. First is what the Funds have termed the "CENE Enterprise," comprised of Abbott, associated physicians, the Council for Excellence in Neuroscience Education ("CENE"), and ACCESS Medical Group ("ACCESS"). CENE—a purportedly independent continuing education medical group with undisclosed ties to Abbott—disseminated materials and sponsored webinars and meetings on off-label Depakote uses. CENE also retained "faculty" and "council" physician members to promote Depakote for off-label uses. ACCESS aided CENE by creating continuing education materials, including slide show presentations for use by doctors in Abbott's speakers' bureau. The second—the so-called "PharmaCare Enterprise"—included Abbott, its sales representatives, and PharmaCare Strategies, Inc. ("PharmaCare Strategies"), a market development firm that trained Abbott employees to successfully promote Depakote for off-label uses. PharmaCare Strategies conducted its training off-site rather than at Abbott's headquarters. The third enterprise, the "ABcomm Enterprise," funneled kickbacks to physicians to increase Depakote prescriptions. The ABcomm Enterprise included physicians and other medical professionals, Abbott, and ABcomm, Inc. ("ABcomm"), a medical continuing education provider that created training materials and provided live activities. Abbott controlled and participated in each of these enterprises with the goal of increasing the amount of off-label Depakote prescriptions purchased by the TPPs.

Through these three enterprises, Abbott sponsored dinners and other programs where a physician would speak on off-label Depakote uses. Abbott directly or indirectly compensated the speaker, also paying for the meals of those physicians attending the dinners. Abbott funded physicians' studies of Depakote, which served as a backdoor way of increasing Depakote prescriptions. Abbott also funded the development of clinical practice guidelines for Depakote that mandated its use as a first-line of defense for dementia and long-term agitation and sundown syndrome in patients suffering from dementia. The guidelines did not disclose Abbott's financial support, instead purporting to be independent. Similarly, Abbott issued supplements to medical journals disguised as peer-written articles free from pharmaceutical manufacturer influence that promoted Depakote's use for off-label indications.

In addition to working with these outside entities and physicians to promote off-label uses of Depakote, Abbott also had internal mechanisms in place to drive such sales. This included providing incentive packages to sales representatives based on their success in marketing Depakote. Abbott promoted standardized messaging among its sales representatives, providing them with scripts on how to sell physicians on prescribing Depakote for off-label uses. Abbott then had monthly contests for each

192 F.Supp.3d 966

district sales area, rewarding sales representatives for their delivery of the scripted messages. To optimize its targets, Abbott accessed and analyzed prescription data from Health Market Science, Inc. Abbott encouraged its sales representatives to discuss the lower cost of Depakote and its higher likelihood of reimbursement when compared to other medications such as Lamictal, an anticonvulsant used for maintenance treatment of bipolar I disorder (for which Depakote is not indicated). Abbott also instructed sales representatives to encourage physicians to use rapid loading or increased doses of Depakote in their patients, despite warning labels and other dosing instructions. Abbott blurred the lines between bipolar mania and agitation associated with dementia to make its sales appear legitimate, used data that did not relate directly to Depakote, and promoted Depakote directly to patients and caregivers at support group meetings. But because Abbott wanted to conceal its off-label marketing, it instructed its sales representatives not to place their call notes—i.e., their summaries of sales calls with physicians—concerning off-label uses of Depakote into its computer system and instructed them to indicate discussions of on-label diagnoses instead.

Abbott marketed Depakote for off-label uses despite having no reliable evidence of its safety or efficacy for the treatment of these off-label conditions and, in some cases, having evidence that it was actually ineffective or unsafe for those conditions. For example, a study suspended in March 1999 for safety reasons "failed to show that Depakote was effective in treating the signs and symptoms of mania in elderly dementia patients." Doc. 92 ¶ 60. Abbott also started but did not complete another clinical trial to evaluate Depakote's safety and efficacy in treating agitation in elderly dementia patients in 2000 and received reports in May 2003 and December 2004 that Depakote made no meaningful difference in the treatment of elderly dementia patients when compared to a placebo group.

Nonetheless, Abbott persisted with its off-label marketing efforts. According to FDA projections, between March 2008 and February 2009, for retail outpatient Depakote prescriptions for patients over 61 years old, approximately 11% were associated with a schizophrenia diagnosis, 6.1% with a dementia diagnosis, and 5.4% with a depression diagnosis. Over the same time period, more than 12% of retail outpatient Depakote prescriptions for patients 17 years or older were associated with a schizophrenia diagnosis, nearly 17% of retail outpatient Depakote prescriptions for patients between 12 and 16 years old were associated with an ADHD diagnosis, and 25% of retail outpatient Depakote prescriptions for patients between 17 and 20 were associated with conduct disturbance or impulse...

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