Wednesday, December 4, 2019
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Ninth Circuit:
Maker of Drug That Withholds Warnings of Dangers Can Be Liable for Refunds
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday ordered reinstatement of an action by persons who purchased an anti-diabetes drug and want their money back because the makers did not reveal that the medicine increases the risk of bladder cancer.
The opinion reverses a one-sentence order by District Court Judge Stephen V. Wilson of the Central District of California dismissing a putative class action under the under the Racketeer Influenced and Corrupt Organizations Act (“RICO”).
Suit was brought not only by purchasers, but also a healthcare fund that made reimbursements to those who bought the drug, Actos.
Bea’s Opinion
Writing for a three-judge panel, Circuit Judge Carlos T. Bea said:
“Today we confront an issue of first impression in our circuit, and one that has caused an apparent circuit split among four of our sister circuits: In civil actions brought under the Racketeer Influenced and Corrupt Organizations Act (‘RICO’) against pharmaceutical companies, do patients and health insurance companies who reimbursed patients adequately allege the required element of proximate cause where they allege that, but for the defendant’s omitted mention of a drug’s known safety risk, they would not have paid for the drug?”
Bea recited that the U.S. Supreme Court in the 1992 case of Holmes v. Securities Investor Protection Corporation held that for liability to attach in a RICO case, there must be “some direct relation between the injury asserted and the injurious conduct alleged.”
Conflicting Views
He noted that the Second and Seventh Circuits have held that a drug-maker’s failure to reveal consequences of using the product does not proximately cause harm to the patient because the act of the physician in writing the prescription and the acts of pharmacy benefit managers are intervening causes, while the First and Third Circuits have taken a contrary stance.
“We think the First and Third Circuits have it right because their reasoning is more consistent with the Supreme Courts direct relation requirement,” Bea wrote.
He said:
“Here, Plaintiffs seek to hold Defendants liable for the consequences of their own acts and omissions toward Plaintiffs: the money spent by Plaintiffs to purchase Actos.”
Personal Injury Actions
The action does not seek damages for personal injuries through ingestion of Actos. Such actions are being separately maintained
The Food and Drug Administration on Sept. 17, 2010, put out the word that it was investigating the side effects of Actos. On June 15, 2011, it issued a warning, which says it “is informing the public that use of the diabetes medication Actos (pioglitazone) for more than one year may be associated with an increased risk of bladder cancer.”
Sales of the drug plummeted by 80 percent.
The case is Painters and Allied Trades District Council 82 Health Care Fund v. Takeda Pharmaceutical Company Ltd., 18-55588.
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