Johnson v. Gilead Scis., Inc.

Decision Date28 September 2021
Docket NumberCase No. 4:20-cv-1523-MTS
Citation563 F.Supp.3d 981
Parties Darren JOHNSON, on behalf of himself and all others similarly situated, Plaintiff, v. GILEAD SCIENCES, INC., Defendant.
CourtU.S. District Court — Eastern District of Missouri

Adam Matthew Evans, Hollis Law Firm PA, Overland Park, KS, J. Toji Calabro, Calabro Law Office, Kansas City, MO, for Plaintiff.

David Ryan Carpenter, Pro Hac Vice, Joshua E. Anderson, Pro Hac Vice, Sidley Austin LLP, Los Angeles, CA, Thomas J. Magee, Charles N. Insler, Hepler Broom LLC, St. Louis, MO, for Defendant.

MEMORANDUM AND ORDER

MATTHEW T. SCHELP, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Defendant's Motions to Dismiss, Doc. [6], under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. For the following reasons, the Court denies the Motion.

I. BACKGROUND 1

This case arises out of Defendant Gilead Sciences, Inc.’s ("Gilead") allegedly unlawful and unjust conduct in connection with the sale and marketing of prescription drugs containing tenofovir disoproxil fumarate ("TDF") and tenofovir alafenamide ("TAF") for the treatment of HIV. Doc. [4] ¶ 1. Plaintiff Darren Johnson alleges Defendant engaged in deceptive practices when it sought approval of TDF based on misrepresentations of TDF's superiority and ended TAF development under false pretenses, therefore knowingly depriving Plaintiff of a safer and efficacious drug. Id. ¶¶ 12, 46, 66.

The following facts form the basis of Plaintiff's Complaint. Defendant simultaneously developed TDF and TAF in the late 1990s. Id. ¶ 10. Defendant patented TDF in the 1990s and TAF no later than July 2000. Id. In 2001, Defendant filed a New Drug Application ("NDA") to approve TDF for marketing under the brand name "Viread," and it was approved by the FDA. Id. ¶ 11. Defendant did not file an NDA for TAF in 2001, although Plaintiff alleges Defendant "knew [TAF] promised to be more effective and safer than TDF." Id. ¶ 12. In a December 31, 2001, 10-K report, Defendant stated that TAF may have greater potency than TDF. Id. ¶ 12. Other studies from the "early 2000's indicated that TAF was a game changer." Id. ¶ 17. Plaintiff alleges "Defendant knew ... that TAF ... would be objectively superior to TDF because it would be more effective (‘greater potency than Viread,’ ‘greater antiviral efficacy’) and safer (‘a dose that is ten times lower than Viread’)." Id. ¶ 19. As late as January 29, 2004, Defendant was still publicly reporting TAF development as a "novel" drug based on "Phase I/II results." Id. ¶ 14. Later that year, Defendant applied for, and the FDA approved in August 2004, a TDF-based drug, marketed as "Truvada." Id. ¶ 15.

In an October 2004 press release, Defendant announced it was discontinuing the development of TAF because it "does not believe [TAF] has a profile that differentiates it [from TDF] to an extent that supports its continued development." Id. ¶ 16. Plaintiff alleges Defendant engaged in "suppression and concealment of TAF in 2004 under false pretenses, specifically to deprive Plaintiff ... from purchasing the TAF-based products so that Plaintiff ... would have to purchase the less effective and more dangerous TDF-based products." Id. ¶ 66. According to Plaintiff, Defendant "continued to withhold the safer TAF-based drugs from the market so that it could continue to generate billions of dollars in profits from its TDF-based products." Id. ¶ 26. Plaintiff alleges that a December 31, 2004, 10-K report shows "Defendant knew, and warned its shareholders, that maintaining the sales of its TDF dugs were essential to its competitiveness and, ultimately, survival." Id. ¶ 22. The report states, in part, "We are currently dependent on sales of our HIV products .... If we are unable to continue growing our HIV product revenues or maintain AmBisome sales, our results of operations are likely to suffer and we may need to scale back our operations. " Id. (emphasis added).

Defendant's patent on Viread – the first TDF drug launched – was set to expire in 2017, and, as Plaintiff alleges, "to maintain its profits, Gilead believed it had to convince doctors and patients to switch over to TAF-based products before TDF generics hit the market." Id. ¶ 27. In January 2012, Defendant announced its relaunch of TAF development. Id. ¶ 28-29. In a January 2012 press release, Defendant touted its TAF relaunch as "an important milestone in Gilead's efforts to develop the next generation of best-in-class therapies for HIV," and that because "it can be used once-daily at one-tenth the dose of [TDF] ... [TAF] could enable the development of a new range of single-tablet regimens for HIV that optimize clinical efficacy, safety and tolerability for patients." Id. ¶ 29. Defendant "identified nothing in the science that had changed in the intervening years that would cause such an about face," as the 2004 discontinuation characterizations were in "stark contrast" to Defendant's January 2011 statements. Id. ¶ 30. According to Plaintiff, "[w]hat had changed was that Gilead had made a fortune on its TDF ‘franchise’ in the intervening years and was preparing to make billions more on a ‘new generation’ of patent-protected drugs using TAF instead of TDF, as TDF's patents were sunsetting." Id. ¶ 30. Less than four years after Defendant's re-launch of TAF development, from November 2015 through November 2016, the FDA approved Defendant's NDAs for various TAF-based medications, including Genvoya, Odefsey, and Descovy. Id. ¶ 31. "Once the TAF-based drugs were released into the market, sales of the TAF-based drugs far eclipsed the TDF-based analogs." Id. ¶ 68.

Plaintiff alleges he used two TDF medications: "Truvada" starting in or around May 2012, and "Complera" starting in or around May 2014. Id. ¶¶ 42-43. In or around March 2016, he switched to a TAF medication, "Odefsey." Id. ¶ 44. Plaintiff alleges Defendant "hid" from Plaintiff "the risk profile for the TDF-based drugs." Id. ¶ 68. Based on Defendant's alleged misrepresentations, Plaintiff alleges, "he purchased TDF-based drugs with the expectation that TDF-based drugs had a certain risk profile, and that they were the most effective and safest version of the therapy known to Gilead." Id. ¶ 68. Plaintiff also alleges Defendant's misrepresentations concerning TAF and TDF allowed Defendant to "command such [artificially high] prices" for TDF medications, the allegedly inferior drug. Id. ¶ 68. Had Plaintiff known that the TDF-drugs were "less effective and more dangerous than they needed to be," Plaintiff "would not have paid what he paid" for TDF-drugs. Id. ¶ 46. Had Plaintiff known that TDF was inferior to TAF, and if TAF was available to him, Plaintiff would not have taken any TDF drug. Id. ¶ 45.

Based on the foregoing, Plaintiff asserts two causes of action under Missouri state law against Defendant: unfair or deceptive practices in violation of the Missouri Merchandising Practices Act ("MMPA"), Mo. Rev. Stat. § 407.020 (Count I) and unjust enrichment (Count II). Id. ¶¶ 66, 70-74. In the instant Motion, Defendant moves to dismiss Plaintiff's Complaint for failure to state a claim under Federal Rules of Civil Procedure 8, 9(b), and 12(b)(6). Doc. [6].

II. LEGAL STANDARD

The notice pleading standard of Federal Rule of Civil Procedure 8(a)(2) requires a plaintiff to give "a short and plain statement showing that the pleader is entitled to relief." If the plaintiff fails to do so, Rule 12(b)(6) allows a party to move to dismiss a purported claim if it "fail[s] to state a claim upon which relief can be granted." To survive a Rule 12(b)(6) motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotations and citation omitted). The factual content of the plaintiff's allegations must "allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Cole v. Homier Distrib. Co. , 599 F.3d 856, 861 (8th Cir. 2010) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ). "Threadbare recitals of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ; Bell Atlantic v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). If a claim fails to allege one of the elements necessary to recovery on a legal theory, that claim must be dismissed for failure to state a claim upon which relief can be granted. Crest Constr. II, Inc. v. Doe , 660 F.3d 346, 355 (8th Cir. 2011).

The Court "must liberally construe a complaint in favor of the plaintiff," Huggins v. FedEx Ground Package System, Inc. , 592 F.3d 853, 862 (8th Cir. 2010), and must grant all reasonable inferences in favor of the nonmoving party, Lustgraaf v. Behrens , 619 F.3d 867, 872–73 (8th Cir. 2010). Although courts must accept all factual allegations as true, they are not bound to take as true "a legal conclusion couched as a factual allegation." Twombly , 550 U.S. at 555, 127 S.Ct. 1955 (internal quotations and citation omitted); Iqbal , 556 U.S. at 677–78, 129 S.Ct. 1937. Indeed, "[c]ourts should dismiss complaints based on ‘labels and conclusions, and a formulaic recitation of the elements of a cause of action.’ " Hager , 735 F.3d at 1013 (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).

III. DISCUSSION

First, Defendant argues Plaintiff's claims are preempted by the "impossibility" of complying with both state and federal law. Doc. [7] at 7. Second, Defendant claims Plaintiff failed to plead facts showing a violation of the MMPA, namely any actionable misrepresentation or ascertainable loss. Id. at 10. Lastly, Defendant argues Plaintiff's unjust enrichment claim fails because he did not plead facts showing Defendant engaged in any wrongful conduct and that Plaintiff did receive what he bargained for with his TDF-medication...

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