Third-Party Payers Denied Class Certification in Neurontin, Vioxx Litigation

Third-party payers may have a tough time getting class certification in suits alleging economic injury from drug purchases given recent rulings in Neurontin and Vioxx litigation.

In a May 13 decision, Massachusetts District Judge Patti Saris denied class status to consumers and third-party payers alleging financial damages from Pfizer's off-label promotion of its anti-epileptic drug Neurontin (gabapentin). She concluded that the plaintiffs could not show that they were all injured as a result of Pfizer's fraudulent marketing.

In the Vioxx case, Los Angeles Superior Court Judge Victoria Gerrard Chaney denied class certification to third-party payers who claimed they would not have purchased Vioxx, or not paid so much for it, had they known of its cardiovascular risks. Chaney ruled that plaintiffs would have to show they relied on Merck's misrepresentations or nondisclosures in purchasing the drugs and there was no evidence they could do so.

Saris has mulled the question of class certification at great length in the Neurontin litigation. She denied the plaintiffs' first motion for certification in August 2007 but said they could submit a new request addressing her concerns that they had failed to satisfy four requirements for certification.

Link Between Marketing, Purchasing Unclear

In her current 51-page opinion, Saris said the plaintiffs had fixed three of these deficiencies: they altered the parameters of the plaintiff subclasses so they are narrow enough to show common issues of fact; they showed that the number of potential plaintiffs in the subclasses is sufficiently large; and they put forward subclass representatives that are sufficiently typical of the class as a whole.

But Saris said they failed to overcome the predominance requirement, in this case meaning that the plaintiffs failed to show that they all received Neurontin as a result of Pfizer's off-label marketing.

Saris explained that determining whether fraudulent marketing resulted in plaintiffs' receiving an off-label prescription for Neurontin would depend on whether each prescribing doctor was exposed to off-label marketing and whether it played a role in the physician's decision to prescribe Neurontin to a particular plaintiff. Saris had previously concluded that individualized inquiries would be unnecessary if "a statistical analysis could show that essentially all of the prescriptions written for plaintiffs were the result of the alleged fraud."

While the plaintiffs offered such a statistical model, Saris said a quartet of rulings since August 2007 led her to reconsider allowing the use of statistical evidence to establish a class-wide presumption of causation.

In one of these cases, International Union of Operating Engineers Local No. 68 Welfare Fund v. Merck, the New Jersey Supreme Court denied class certification to a labor union health plan that alleged Merck fraudulently marketed Vioxx as superior to other pain medications (¹ (Also see "Vioxx Ruling May Curtail Health Plan Class Actions Against Drug Companies" - Pink Sheet, 17 Sep, 2007.), p. 25). The court concluded that each payer made a different decision about whether to place Vioxx on its formulary, and thus there were not common questions of law to pursue a class action.

Individual Payers Could Pursue Litigation

Saris seemed reluctant to let Pfizer off the hook, however, encouraging plaintiffs to pursue individual suits against the company.

"The court is still quite troubled by defendants' blatantly illegal off-label promotion activities for which they have been criminally sanctioned," Saris wrote, alluding to Pfizer's 2004 guilty plea in which it agreed to pay $430 million in fines and damages to states and the federal government (² (Also see "Warner-Lambert GMP Conviction Plays Role In Neurontin Case" - Pink Sheet, 17 May, 2004.), p. 5).

"Defendants have fought this suit tooth-and-nail, and a small TPP [third party payer] would be wary of taking on the drug Goliath," she stated. "Still, much of the work has been done. This denial of class certification does not preclude individual TPPs from bringing suit on their own behalf, as many well-heeled TPPs have already done."

Plaintiffs may be reluctant to take up battle on their own since any award in an individual case is comparatively small. As a group, plaintiffs have been seeking $4 billion to $4.5 billion in damages for Pfizer's promotion of Neurontin for five separate off-label indications. In building a case for class certification, they had gathered testimony from scientific experts that Pfizer slanted and suppressed scientific data about the effectiveness of Neurontin for unapproved indications (³ (Also see "Neurontin Off-Label Suit: Plaintiffs’ Experts Claim Pfizer Slanted Studies" - Pink Sheet, 13 Oct, 2008.), p. 20).

FDA Study "Is Not A Silver Bullet For Plaintiffs"

The third-party payer cases were consolidated with several hundred personal injury suits in multidistrict litigation proceedings before Saris as In re: Neurontin Marketing, Sales Practices and Product Liability Litigation.

Saris recently issued a significant ruling in the product liability portion of the litigation. In a May 5 order, she denied Pfizer's motion to exclude testimony from plaintiffs expert witnesses that by altering the brain chemistry of its users, Neurontin has the biological capacity to cause mood and behavior changes that predictably result in suicidal actions.

FDA had flagged this potential risk in 2005 when it asked manufacturers of antiepileptics for data on whether use of the drugs increased the risk of suicidal behavior. In her May 5 ruling, Saris noted that FDA conducted a meta-analysis of 199 placebo-controlled clinical studies involving 11 different antiepileptic drugs, including Neurontin.

In January 2008, FDA issued an alert to health care professionals stating that patients taking these drugs had twice the risk of suicidal behavior compared to those receiving placebo. But the agency said in the alert that this did not mean FDA had concluded there is a causal relationship between the two. The agency also submitted an amicus brief in the Neurontin litigation reiterating that point.

Saris said the FDA study "is not a silver bullet for plaintiffs" as it produced a positive association but not a statistically significant one. She further stated that although the parties' experts debate the strength and specificity of the association, its presence alone strengthens the plaintiffs' case for admission of its expert testimony.

The first Neurontin personal injury trial, Bulger v. Pfizer, is scheduled to begin July 27.

- Brenda Sandburg ([email protected])