In re Xarelto (Rivaroxaban) Prods. Liab. Litig.
| Decision Date | 08 July 2021 |
| Docket Number | MDL NO. 2592 SECTION L |
| Parties | IN RE: XARELTO (RIVAROXABAN) PRODUCTS LIABILITY LITIGATION THIS DOCUMENT RELATES TO: Louisiana Health Service and Indemnity Co. d/b/a Blue Cross and Blue Shield of Louisiana, et al. No. 15-CV-03913 |
| Court | U.S. District Court — Eastern District of Louisiana |
Before the Court is Defendants' Motion to Dismiss the First Amended Class Action Complaint of three health care third-party payors. R. Doc. 17888. Plaintiffs oppose the motion, R. Doc. 17925, and Defendants replied. R. Doc. 17932. Having considered the parties' briefs and the applicable law, and having heard oral argument, the Court now rules as follows.
This case arises out of the multi-district litigation ("MDL") involving the prescription anticoagulant medication known as Xarelto. To put this matter in perspective, a brief review of the litigation is helpful. Beginning in 2014, lawsuits were filed in federal courts throughout the nation against Defendants Bayer Corporation, Bayer HealthCare LLC, Bayer HealthCare Pharmaceuticals Inc., Bayer HealthCare AG, Bayer Pharma AG, Bayer AG, Janssen Pharmaceuticals, Inc., Janssen Research & Development, LLC, Janssen Ortho LLC, and Johnson & Johnson (collectively, "Defendants"). In their suits, plaintiffs assert that they or their family members suffered severe bleeding and other injuries due to Xarelto's allegedly inadequate warning label, as well as other theories.
The Judicial Panel on Multidistrict Litigation ("JPML") determined that the plaintiffs' claims involved common questions of fact, and that centralization under 28 U.S.C. § 1407 would serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation. Accordingly, on December 12, 2014, the JPML consolidated the plaintiffs' Xarelto claims into a single multidistrict proceeding ("MDL 2592"). MDL 2592 was assigned to Judge Eldon E. Fallon of the United States District Court for the Eastern District of Louisiana to coordinate discovery and other pretrial matters in the pending cases. Subsequent Xarelto cases filed in federal court have been transferred to this district court to become part of MDL 2592 as "tag along" cases. In addition, a number of cases were filed directly in this Court and became part of this MDL proceeding. At its peak, the Court had over 30,000 individual cases in this MDL.
After years of discovery and six bellwether trials, the Plaintiffs' Steering Committee ("PSC") and the Defendants entered into settlement discussions and reached a settlement in early 2019. On March 25, 2019, the PSC and Defendants announced the Master Settlement Agreement, which resolves the claims of eligible Xarelto patients who suffered bleeding events, strokes, or cerebrovascular accident, venous thromboembolism, blood clots, and other various injuries that they associated with their use of Xarelto. R. Doc. 17623-1 at 6-7. This is an opt-in settlement program and thus far, over ninety-nine percent of the plaintiffs in this litigation have chosen to opt into the settlement. In addition, all personal injury claims by plaintiffs outside of the settlement program have now been resolved.
The current matter involves Defendants' alleged unfair and deceptive marketing practices related to Xarelto. Three third-party payors ("TPPs")— Louisiana Health Service and Indemnity Company d/ba/ Blue Cross and Blue Shield ("LABC"), Allied Services Division Welfare Fund ("Allied"), and HMO Louisiana, Inc. ("HMO Louisiana")—brought this action on behalf of themselves and a putative class of TTPs seeking to recover the amounts paid by Plaintiffs to fill Xarelto prescriptions dispensed to their insureds from July 1, 2011 through the present.
The FDA approved Xarelto in July 2011 for the prevention of deep vein thrombosis and pulmonary embolism following hip or knee replacement surgeries, in November 2011 to reduce the risk of stroke and embolism in patients with non-valvular atrial fibrillation, and in November 2012 to treat deep vein thrombosis or pulmonary embolism and their recurrence. Although Plaintiffs admit that Defendants submitted relevant information to the FDA and warned in an FDA-approved label that "Xarelto can cause serious and fatal bleeding," Plaintiff maintain that Defendants did not adequately inform the prescribing medical community about the risks of uncontrollable bleeds associated with Xarelto or advise on how to stabilize a patient should a bleed occur. R. Doc. 1337 ¶ 136. Plaintiffs further allege Defendants fraudulently marketed Xarelto as a "one size fits all," once-daily medication that did not require blood monitoring, minimizing the risks associated with that usage. Id. ¶ 150.
As part of their business model, Plaintiffs contract with an outside vendor to provide pharmacy benefit management services for the drug component of their healthcare plans. These pharmacy benefit managers ("PBMs"), after reviewing clinical evidence, prepare a formulary, which is a list of drugs that are approved for coverage by the TTPs.1 Id. ¶ 162. In order for a drug to be listed on the formulary, it must be assessed by the PBM for clinical safety, efficacy, and cost effectiveness. Id In accordance with this procedure, Xarelto was included on Plaintiffs' formularies. Plaintiffs provided reimbursement, in whole or in part, for Xarelto prescriptions prescribed by doctors for covered patients in several states.
Plaintiffs now allege that Defendants mispresented Xarelto's safety and efficacy to the FDA, prescribing physicians, PBMs, and the medical community as a whole. In particular, Plaintiffs argue if the FDA, PBMs, and/or prescribes had truthful and complete information about Xarelto: (1) the Plaintiffs would not have paid for Xarelto at all because PBMs would not have put it on the formularies; or (2) the PBMs would have placed Xarelto in a disfavored tier on their formularies, decreasing the cost to the payors of the drug and deterring physicians from prescribing it. Id. ¶¶ 160-165. In either circumstance, the payors allege, they would have paid for the more affordable, less dangerous drug, warfarin. Id. ¶ 161.
Based on these allegations, Plaintiffs assert claims for: 1) common law fraudulent misrepresentation; fraudulent concealment; and fraud and deceit; 2) violation of the Illinois Consumer Protection Act; 3) violation of the Louisiana Unfair Trade Practices Act ("LUTPA"); 4) violation of the New Jersey Consumer Fraud Act ("NJCFA"); 5) violations of other state consumer protection statutes; 6) violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"); 7) redhibition; and 8) unjust enrichment.2 R. Doc. 1337. Plaintiffs seek class certification and monetary damages with pre-judgment and post-judgment interest, treble damages, fees and costs. Regarding the unjust enrichment claims, Plaintiffs seek disgorgement, restitution, and the creation of a constructive trust. Id. at 75.
These claims have been dormant since Plaintiffs filed the First Amended Complaint on September 29, 2015. In the meantime, six bellwether trials were held—three in the MDL3 and three in the Pennsylvania state court4—each of which resulted in judgment in favor of Defendants. Except for the nature of the injuries at issue, the TPPs' factual allegations underlying their claims are identical to those put forth by the personal injury plaintiffs in the MDL.
Defendants now seek to dismiss the Complaint in its entirety under Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure. R. Doc. 17888. In particular, Defendants contend that each of Plaintiffs' claims fail to plead facts that would establish proximate causation. First, Defendants argue that Plaintiffs fail to demonstrate a "direct relation" between the injury asserted and alleged injurious conduct, in violation of the proximate cause requirement set forth by the United States Supreme Court in Holmes and its progeny. Second, Defendants assert that Plaintiffs impermissibly rely on a fraud-on-the-market theory to establish proximate causation. In Defendants' view, the claim that the medical community as a whole, rather than individual physicians, acted in a particular way in response to the alleged misrepresentations is insufficient to establish liability. Third, Defendants argue that Plaintiff's fraud-based claims fail to satisfy Federal Rule of Civil Procedure 9(b) because Plaintiffs do not identify any particular physician or pharmacy benefit manager that received any alleged misrepresentation, the timing of content of the misrepresentation, or how it caused Plaintiff to act or refrain from acting.
Defendants also provide a number of arguments in support of dismissing Plaintiffs' state law claims, including that Plaintiffs' failed to demonstrate sufficient causation under the various state consumer protection and unfair trade practice statutes.
Plaintiffs oppose the motion, arguing that they have adequately allegedly a direct causal link between the Defendants' fraudulent marketing of Xarelto and the TPPs' injuries. R. Doc. 17925. Next, Plaintiffs counter that their allegations of fraud are sufficient to support their fraud claims under FRCP 9(b). Finally, Plaintiffs further argue that their claims under the state consumer protection and unfair trade practices statutes withstand the alternative grounds for dismissal advanced by Defendants.
The Federal Rules of Civil Procedure permit a defendant to seek a dismissal of a complaint based on the "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A complaint should not be dismissed for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 47 (...
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