Wednesday, May 16, 2012

More Nails in the Coffin of Third Party Payor Actions

In a pair of precedential opinions, the Third Circuit affirmed today the dismissal - for lack of standing- of the Intron off-label promotion RICO class action.

See:  In Re: Schering Plough Corp. Intron/Temodar Consumer Class Action, No. 10-3046, 3047, slip op. (3d Cir. May 16, 2012), and In Re: Schering Plough Corp. Intron/Temodar Consumer Class Action, No. 10-3047, slip op. (3d Cir. May 16, 2012).  You don't need to read both.  They're the same opinon

In both cases the court affirmed dismissal for want of standing. Third party payers aren't legally injured by off-label promotion. 


[T]o establish standing, [plaintiff] must allege facts showing a causal relationship between the alleged injury - payments for [the drug] that was ineffective or unsafe for the use for which it was prescribed - and [defendant's] alleged wrongful conduct.
3046, slip op. at 21.  Can't be done, held the unanimous court:


Local 331 must allege facts sufficient to show that the [the drug] which it paid for was prescribed to its members for ineffective off-label uses because of [defendant's] alleged misconduct.  There are no averments that come close to satisfying this standard.
 Id. at 23 (emphasis original).

Nor could another plaintiff (an individual - what a terrible plaintiff) establish standing when that plaintiff didn't even use the drug alleged in the complaint:

[T]he allegedly phony trial did not even concern a treatment regimen that [plaintiff's] doctor prescribed to her is dispositive.  There is no allegation of fact that supports a connection between [defendant's] unlawful conduct of involving [the prescriber] in a phony trial, and [his] prescription for a different drug therapy.
Id. at 31.

In addition, the opinion makes a couple of interesting procedural points:  (1) a plaintiff cannot incorporate by reference lengthy documents into its complaint since that would make answering the complaint impossible.  Id. at 29.  (2) "Information and belief" allegations, where the basis for the information and belief is not stated, "allege insufficient facts" to support any cause of action.  Id. at 33.  These will be useful rulings in obtaining dismissal of similarly poorly pleaded complaints in the future.

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