In re Neurontin Mktg. And Sales Practices Litig..This Document Relates To:kaiser Found. Health Plan Inc.

• Decision Date: 03 November 2010
• Docket Number: Civil Action No. 04–cv–10739–PBS.
• Citation: 748 F.Supp.2d 34
• Parties: In re NEURONTIN MARKETING AND SALES PRACTICES LITIGATION.This Document Relates to:Kaiser Foundation Health Plan, Inc., et al.v.Pfizer, Inc., et al.
• Court: U.S. District Court — District of Massachusetts

748 F.Supp.2d 34

In re NEURONTIN MARKETING AND SALES PRACTICES LITIGATION.This Document Relates to:Kaiser Foundation Health Plan, Inc., et al.

v.Pfizer, Inc., et al.

Civil Action No. 04–cv–10739–PBS.

United States District Court, D. Massachusetts.

Nov. 3, 2010.

Linda P. Nussbaum, Kaplan Fox & Kilsheimer LLP, New York, NY, Thomas M. Greene, Greene LLP, Boston, MA, and Thomas M. Sobol, Hagens Berman Sobol Shapiro, Cambridge, MA, for Kaiser Foundation Health Plan, Inc.Mark S. Cheffo, Skadden Arps, New York, NY, Raoul Kennedy, Skadden Arps, San Francisco, CA, and James E. Hooper, Wheeler Trigg O'Donnell LLP, Denver CO, for Pfizer, Inc.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

SARIS, District Judge.

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I.  INTRODUCTION AND SUMMARY                                            37
                II. FINDINGS OF FACT                                                    39
                

    A.   Kaiser Foundation Health Plan and Kaiser Foundation Hospitals  39
                

         1.  Kaiser's Proactive Drug Management                         39
                         2.  Kaiser's Placement of Neurontin on Formularies             40
                

    B.   Marketing of Neurontin                                         41
                

         1.  FDA Approval of Neurontin For Epilepsy Treatment           41
                             The “Strategic Swerve” to Maximize Neurontin Profits For
                         2.  Off–Label Indications                                      42
                         3.  Efforts to Expand On–Label Uses Fail at the FDA            42
                         4.  The Two Marketing Partnerships                             43
                         5.  Use of Medical Liaisons for Off–Label Marketing            45
                         6.  Investigation by the FDA                                   46
                             FDA Rejection of Neurontin for Neuropathic Pain and
                         7.  Approval For Post–Herpetic Neuralgia (PHN)                 46
                         8.  Warner–Lambert Guilty Plea                                 47
                

    C.   Target: Kaiser                                                 47
                

    D.   The Marketing Fraud                                            48
                

         1.  Bipolar Disorder                                           48
                

             i.   Direct Marketing to Physicians                        49
                             ii.  Publication Strategy                                  50
                             iii. Sponsorship of Continuing Medical Education (CME)     52
                             iv.  Communications with the Cochrane Review               53
                             v.   The Bottom Line                                       53
                

         2.  “Kick Ass” on Neuropathic Pain                             53
                

             i.   Publication Strategy                                  54
                             ii.  Direct Marketing and Sponsorship of CMEs              58
                             iii. Detailing Doctors                                     59
                             iv.  The Bottom Line                                       59
                

         3.  Migraine                                                   59
                

             i.  Publication Strategy                                  59
                             ii. Sponsorship of CME Events                             61
                

         4.  Nociceptive Pain                                           61
                         5.  Doses Greater than 1800 mg/day                             62
                

    E.   Kaiser's Reliance on Pfizer's Misrepresentations               63
                    F.   Kaiser's DUAT and DRUG Campaigns                               66
                    G.   Injury/Damages                                                 67
                

    H.   Neurontin's Efficacy for Off–Label Conditions                  70
                

         1.  Bipolar Disorder                                           71
                

             i.   Pande Trial                                           71
                             ii.  Frye Trial                                            71
                             iii. Guille Trial                                          72
                             iv.  Vieta Trial                                           72
                             v.   Mokhber Trial                                         72
                

         2.  Neuropathic Pain                                           74
                

             i.    Gorson Trial                                         74
                             ii.   Backonja Trial                                       74
                             iii.  Reckless Trial                                       75
                             iv.   POPP Trial                                           75
                             v.    Tamez–Pérez Trial                                    75
                             vi.   Morello Trial                                        75
                             vii.  Serpell Trial                                        76
                             viii. Bone Trial                                           76
                             ix.   Tai Trial                                            76
                             x.    Levondoglu Trial                                     76
                             xi.   Van de Vusse Trial                                   76
                             xii.  Parsons Trial                                        76
                

         3.  Migraine                                                   79
                

             i.   Trial 879–200                                         79
                             ii.  Trial 945–217                                         80
                             iii. Mathew Trial                                          80
                             iv.  Di Trapani Trial                                      80
                

         4.  Doses Greater than 1800 mg/day                             80
                

                III. CONCLUSIONS OF LAW                                                 81
                

    A.   Fraudulent Business Acts or Practices                          81
                    B.   Pfizer's Legal Defenses                                        83
                

         1.  Standing                                                   83
                         2.  Statute of Limitations                                     83
                

             i.  Tolling Under American Pipe                           83
                             ii. The Discovery Rule                                    84
                

         3.  Prescriptions Written Outside California                   87
                         4.  Causation                                                  88
                

             i.   Reliance by DIS and P & T Committees                  89
                             ii.  Prescribing Behavior by PMG Physicians                91
                             iii. Quantifying the Fraud                                 93
                

    C.   Restitution                                                    93
                

                IV. ORDER                                                               94
                

I. INTRODUCTION

Approved by the Food and Drug Administration (FDA) in 1993 as a secondary treatment for epilepsy, Neurontin became one of the top selling drugs in the world. Sales rose from fewer than 50,000 prescriptions in 1995 to more than 1.4 million in 2004. The success of the drug was due to the illegal activities of Parke–Davis, Warner–Lambert and Pfizer, companies that undertook a nationwide effort to unlawfully market this drug for off-label uses for which there was little or no scientific evidence of efficacy. The Food, Drug and Cosmetic Act (FDCA) prohibits such off-label marketing by pharmaceutical companies. See 21 U.S.C. § 355(a).

Dubbed “snake oil” by Pfizer's own sales team, Neurontin was promoted through a publication strategy that suppressed negative clinical trials and showcased positive ones. Pfizer also sponsored continuing medical education programs and detailed doctors to promote off-label uses of the drug. Eventually Warner–Lambert pled guilty to criminal violations of the FDCA and paid civil fines and criminal penalties totaling $430 million.

This action, which was independently filed in the District of Massachusetts, is related to a larger multi-district litigation (MDL) that consolidates for pretrial purposes Neurontin-related civil lawsuits brought nationwide. One group of MDL cases consists of products liability actions claiming that Neurontin caused someone to commit or attempt to commit suicide. Another group of cases involves lawsuits related to the sales and marketing of Neurontin. This case falls within the latter category. Pfizer previously moved for summary judgment in most of the sales and marketing cases. The Court allowed the summary judgment motion as it related to plaintiffs Guardian Life Insurance Company and Aetna, Inc., two other third party payors, because the Court found that these companies had not provided admissible evidence to create disputed fact issues with respect to reliance or causation. See In re Neurontin Mktg. & Sales Practices Litig., 677 F.Supp.2d 479 (D.Mass.2010).

Kaiser Foundation Health Plan and Kaiser Foundation Hospitals (collectively, “Kaiser”), bring this case against Pfizer, Inc. and Warner–Lambert Company (collectively, “Pfizer”), alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and the California Unfair Competition Law (“UCL”). See 18 U.S.C. § 1962(c) (RICO); Cal. Bus. & Prof.Code § 17200(UCL). Kaiser spent about $200 million on Neurontin from 1996 to 2004. After a five-week trial, on March 25, 2010 a federal jury found that Pfizer engaged in a RICO enterprise that committed mail and wire fraud by fraudulently marketing Neurontin for off-label conditions such as bipolar disorder, neuropathic pain, and migraine, and at doses greater than 1800 mg/day. The jury found for defendants with respect to plaintiffs' claims of fraudulent promotion of Neurontin for nociceptive pain.¹ The jury rendered a verdict in plaintiffs' favor on the remaining claims in the amount of $47,363,092. ( See Jury Verdict, Docket No. 2760.) The statute requires the Court to treble the award to $142,089,276. 18 U.S.C. § 1964(c).

Now before this Court is the question of whether that same conduct violated the UCL. During a trial that spanned five weeks, the parties presented testimony of twenty-one live witnesses and eighteen witnesses by deposition. The trial involved...