The pharmaceutical companies behind various testosterone replacement therapy drugs (“TRTs”) are currently defending their products on multiple fronts in a massive multidistrict litigation in the U.S. District Court for the Northern District of Illinois. The MDL was first consolidated in June 2014 and now comprises roughly 3,500 lawsuits. Many of the consumer plaintiffs allege the pharmaceutical companies failed to warn about the potential adverse side effects of using TRTs—such as AndroGel, a product manufactured by AbbVie Inc.—including stroke, blood clotting, cardiovascular events, and other heart related ailments. In December, U.S. District Judge Matthew Kennelly finalized the schedule for a handful of bellwether trials, the hope being that the resolution of these cases will serve as a basis for settlement discussions with respect to the other factually similar lawsuits in the MDL. Pursuant to a prior determination by Judge Kennelly, each bellwether trial involves claims related to AndroGel, as it is the most popular TRT on the market. The first of the bellwether trials is scheduled to begin in April 2017.
But consumers are not the only ones claiming injury caused by TRTs. Insurance companies are looking for a piece of the pie too. Medical Mutual of Ohio (“MMO”), an insurance company, filed suit in November of last year on behalf of a purported class of third-party payors (“TPPs”), alleging the purported class suffered economic injuries when they made reimbursement payments for “medically inappropriate TRT prescriptions,” and asserting RICO violations, common law claims, and violations of state consumer protection and insurance fraud statutes. Specifically, MMO claims the defendants “participated in a fraudulent marketing scheme that mischaracterized TRT drugs as a safe and effective treatment for various ‘off label’ conditions,” which resulted in the reimbursement payments. Currently, TRTs are only approved by the Food & Drug Administration for the treatment of a rare condition known as “classical hypogonadism,” which is characterized by abnormally low testosterone levels in men. According to MMO, however, the defendants have marketed TRTs as being safe and effected for the treatment of everything from cancer to AIDS. MMO also alleges the defendants perpetuated a “disease awareness” campaign that warned of an invented disease known as “andropause” or “Low T,” which some argue is merely the natural decrease in testosterone levels men experience as they age.
Last week, several of the pharmaceutical companies scored a substantial victory in the action brought by MMO. While allowing claims of conspiracy to violate RICO and negligent misrepresentation to stand, Judge Kennelly dismissed the remaining RICO allegations, common law claims, and claims of violation of state consumer protection and insurance fraud statutes for all defendants who had filed motions to dismiss. With respect to the dismissed RICO and common law claims, Judge Kennelly concluded that MMO simply had not alleged sufficient factual support that the defendants fraudulently marketed TRTs. “Though plaintiff alleges generally that defendants met with TPPs regularly, provided them with materials, and made safety and efficacy representations,” explained the court, “it does not identify which defendants made these representations or the approximate dates of any such meetings. In addition, its allegations regarding the contents of these communications are unduly general, at least given the absence of other details.” With respect to the various state law claims, the court concluded that Ohio law applied, but MMO “has not asserted any statutory insurance fraud claim under Ohio law, and it has withdrawn its claim under the Ohio Consumer Sales Practices Act in response to defendants’ motion to dismiss. Thus plaintiff has not stated any viable state statutory claim against any defendant.”
While the ruling was certainly a setback for MMO, the court concluded the defects in the complaint were curable and granted leave to amend. The question now is whether MMO can actually come up with specific facts to supplement the overly general allegations of “fraudulent marketing” in its complaint. This case is an interesting twist on the usual consumer protection lawsuit, and one we will continue to follow.