The U.S. Supreme Court left intact a $142 million award against Pfizer Inc. (PFE:US) and let two similar suits go forward with claims that the drugmaker defrauded insurers by illegally marketing its Neurontin epilepsy drug.
The justices without comment today rejected Pfizer’s appeal, letting stand three connected federal appeals court decisions. The cases are part of the fallout from a 2004 guilty plea by Pfizer’s Warner-Lambert unit to charges that it promoted Neurontin for unapproved “off-label’” uses.
The rebuff means a nationwide class-action suit can proceed, seeking damages on behalf of insurers, union funds and employers who paid for ineffective dosages of Neurontin. Pfizer must also defend against a suit by Aetna Inc. (AET:US), which says it paid for more than a million off-label Neurontin prescriptions. In addition, the world’s biggest drugmaker lost its challenge to a $142 million jury award won by the Kaiser Foundation’s health plan and hospitals.
Pfizer “strategically conducted a decade-long, multifaceted fraud to make Neurontin a blockbuster drug,” Kaiser argued in court papers.
Pfizer said in a statement that it “has strong defenses on the merits in the cases that will now proceed in the lower court.”
At the Supreme Court, Pfizer argued that the Boston-based appeals court improperly relaxed the standards for winning a case under the U.S. Racketeer Influenced and Corrupt Organizations Act, known as RICO. Pfizer said the appeals court should have required proof that the company’s marketing affected the prescriptions issued by individual doctors.
The lower court instead said the insurers could rely on aggregate data showing a link between Pfizer’s promotional spending for unapproved uses and the number of off-label prescriptions written.
The appeals court decisions “invite an unlimited escalation in RICO and related cases against pharmaceutical companies for off-label promotion using the shortcut of aggregate proof,” the New York-based company argued.
The suing insurers say Pfizer pitched Neurontin as a treatment for bipolar disorders, neuropathic pain and migraines, while suppressing or misrepresenting clinical studies that showed the drug wasn’t effective for those treatments.
The insurers point to an internal e-mail describing Neurontin as “the ‘snake oil’ of the twentieth century.”
The conduct occurred before Pfizer acquired Warner-Lambert in 2000. In its 2004 plea agreement, Warner-Lambert admitted it promoted Neurontin for off-label uses.
Federal law bars drugmakers from promoting uses that haven’t received Food and Drug Administration approval, though doctors are free to prescribe medicines for off-label purposes.
Warner-Lambert’s marketing increased off-label sales from 15 percent of all Neurontin prescriptions in 1994, its first year on the market, to 94 percent of Pfizer’s Neurontin sales in 2002, according to federal government court filings. The drug’s sales hit $2.3 billion in 2002.
The Aetna and class action cases can now go forward in a federal district court in Boston.
The Supreme Court case is Pfizer v. Kaiser Foundation, 13-289.
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