 
|
 |
|
The Legal Intelligencer
State Argues $150 Mil. Risperdal Suit Should Have Gone to Jury
By Gina Passarella
May 17, 2012
Some of the Commonwealth Court's judges seemed skeptical at oral arguments Wednesday as to whether Janssen Pharmaceutica defrauded the state government out of $150 million in payments for antipsychotic drug Risperdal or if it was just a lack of research by public officials that led the Medicaid program to pay for the more expensive drug.
Pennsylvania appealed to the Commonwealth Court a Philadelphia judge's nonsuit of its claims against Janssen, now operating as Ortho-McNeil-Janssen Pharmaceuticals Inc., a division of Johnson & Johnson. An en banc panel of the court heard arguments Wednesday as to whether the state did, or even needed to, prove it relied upon marketing from Janssen that Risperdal, at $4 a pill, was superior to other drugs like Haldol, which was 50 cents a pill. The state is seeking damages of $3.50 — the difference between the two pills — for each Risperdal pill that was reimbursed by Medicaid between 1994 and 2008.
The appellate arguments in Commonwealth of Pennsylvania v. Ortho-McNeil-Janssen Pharmaceuticals come about one month after an Arkansas judge awarded plaintiffs $1.1 billion in damages for a similar case over the marketing of Risperdal. The same attorneys in that case are the ones involved in the Pennsylvania suit.
On Wednesday, Judge Anne Covey twice asked Pennsylvania's attorney whether the state should have done some research before agreeing to reimburse Medicaid providers for this drug.
"It's hard to conceive of the Commonwealth of Pennsylvania as an easy target, as a mark, for a fraudulent scheme," Judge Mary Hannah Leavitt told the state's attorney, Robert W. Cowan of Bailey Perrin Bailey in Houston.
Leavitt said the state didn't have to reimburse for the prescriptions. But Cowan said the state has to reimburse for Medicaid prescriptions when those drugs have been approved by the Food and Drug Administration.
Cowan argued the Philadelphia Court of Common Pleas erred when it dismissed before trial the state's Medicaid fraud claim, finding Janssen was not a provider that could have defrauded the state. Cowan also argued that Philadelphia Common Pleas Judge Frederica A. Massiah-Jackson "wrongfully took this case away from the jury" as to the common law fraud and misrepresentation claim when she found the state did not have a confidential relationship with Janssen that would have given it an assumption of reliance on Janssen's marketing. Massiah-Jackson had further found that the state did not prove it relied on the marketing in reimbursing for the Risperdal prescriptions.
Cowan said he would still argue the state had a confidential relationship with Janssen because the discounted prices Janssen charged the state for the pills were confidential. And even if that doesn't create a confidential relationship, Janssen still had a duty to tell Medicaid the claims of superiority weren't true. He said there was also evidence at trial that Janssen knew a lot of Risperdal prescriptions were given through Medicaid and the company targeted Medicaid.
Massiah-Jackson said the state had to prove it or its physicians justifiably relied on statements or representations that caused the state to act in a way that caused the harm. It was at trial that the state first argued it had a "confidential" relationship with Janssen that would entitle the state to a presumption of reliance rather than require it prove justifiable reliance.
In support of that argument, the state relied on information provided by Janssen for determining the "unit rebate amount" of each Risperdal prescription. The details provide that the amount is "'confidential and may not be disclosed.'" The state said that created a "'confidential,' and/or 'fiduciary' relationship" between the two parties.
Massiah-Jackson disagreed, ruling such a confidential relationship exists when the parties are not equal. She said both parties are "independent, sophisticated business and government entities entrusted with equal knowledge of the complicated federal and state legislative mandates."
But Cowan told the Commonwealth Court Wednesday that it doesn't matter if both parties are equal. In this case, he said, there is a payer "compelled by law" to purchase Janssen's product, the price of which is inflated by fraudulent activity by Janssen.
Janssen's attorney, Edward M. Posner of Drinker Biddle & Reath, said there was no evidence doctors relied on any misrepresentation by Janssen in prescribing Risperdal over Haldol. He said there was no evidence that Risperdal's price was supported or sustained by false claims of superiority.
He said the state has two claims. The first is that Janssen misrepresented the drug's superiority to doctors, and the second is that it misrepresented facts to the state by not telling the state that the FDA had warned Janssen not to market superiority claims without first doing tests. Posner said neither of those claims tie to inflated prices.
Posner said the state is looking for damages for every instance of Risperdal prescriptions, even if the drug was in fact the superior drug for that specific patient.
Massiah-Jackson said in her June 2010 opinion in the case that the state was trying to "avoid the unavoidable," which was the learned intermediary doctrine.
While the state argued the theory didn't apply, the judge said the doctrine requires the state to show that if a different warning was given to doctors, who are learned intermediaries, they would have prescribed a different drug. As to the causation argument, Massiah-Jackson said she was concerned there was no evidence to show an internal Janssen letter from 1993 or internal marketing documents regarding Risperdal were provided to anyone involved in the state's purchasing or prescribing of Risperdal or that they would have swayed the prescribing habits of the state's doctors.
In terms of the second count raised by the state, claiming unjust enrichment, Massiah-Jackson said only that the state failed to present a claim for which equitable relief could be granted.
There have been six Risperdal marketing cases that have gone to trial across the country, including the one in Pennsylvania. Of that group, three have resulted in verdicts for the plaintiffs and one resulted in a settlement, according to a report by Legal affiliate The Am Law Litigation Daily .
Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI.
|
|
|
|
|
Home
