Judgment Entered for Kaiser on RICO, Unfair Competition Claims

On March 11, 2011, District Court Judge Patti Saris entered judgment in favor of Kaiser Foundation Health Plan, whom Greene LLP successfully represented as trial counsel in March 2010.  The order officially tripled a jury’s award of damages against Pfizer on RICO claims to $142 million.  In addition, the order updated the court’s previous finding that Pfizer caused damages to Kaiser under California’s Unfair Competition Law, entering judgment on that claim at just under $103 million.  The judgment order, filed by the court on February 22 and entered today, is available here.

The RICO verdict is the first against a pharmaceutical manufacturer and was based on Kaiser’s claim that a pattern of fraud caused Kaiser to pay for prescriptions of the drug Neurontin for a variety of off-label indications.  Although Neurontin was only approved by the FDA as an adjunctive treatment for epilepsy and for postherpetic neuralgia, Pfizer and its predecessors marketed the drug for bipolar disorder, migraines, general neuropathic pain, and in doses above those that had been approved by the FDA.  This off-label marketing turned Neurontin into an unexpected blockbuster, with prescriptions for off-label indications outstripping those for approved indications nearly ten to one.  In Greene LLP attorney Thomas M. Greene’s closing argument at trial (reprised in the “Battle of the Lawyers” last November), Greene noted that profits from Neurontin, originally expected to total $500 million over the lifetime of its patent, instead grew to of $1 billion per year, fueled by off-label prescriptions.

Both judge and jury in the case were persuaded by the evidence offered by experts Dr. David Kessler, former head of the FDA, as well as Dr. Kay Dickersin, who testified on selective publication practices designed to boost off-label sales.  Dr. Dickersin concluded that Pfizer and its predecessors misrepresented Neurontin clinical studies by presenting secondary or newly introduced outcomes in some clinical studies as primary outcomes, and in publishing about some clinical studies in high circulation journals while publishing about other results in low circulation journals and even in non-peer reviewed formats.  Dr. Dickersin’s research about publication bias and Neurontin studies was published in the New England Journal of Medicine.

Before Pfizer acquired Neurontin from Warner-Lambert, one Pfizer employee referred to the drug as “the snake oil of the twentieth century,” the last and only time a Pfizer employee would ever candidly admit that Neurontin was ineffective for the myriad of off-label indications for which it was being marketed.  Judge Saris noted that remark in her 146 page findings of fact and conclusions of law issued last October, in which she found Neurontin ineffective for many of these off-label indications.

Before arguing the Kaiser trial in 2010, Greene LLP attorneys also successfully pursued the first off-label marketing claim under the False Claims Act, arguing that marketing drugs off-label constituted pharmaceutical fraud on the government.  In that case, Greene LLP attorneys argued that because off-label promotion practices are illegal, those practices become Medicare and Medicaid fraud when a pharmaceutical company causes non-reimbursable off-label prescriptions.

Comments are closed.