States Sue Drug Makers Over Deceptive Marketing

Some states are going after drug makers in an effort to cease deceptive marketing practices and broaden possible liability for the drug industry.

Up until now, noted The Wall Street Journal, industry has paid large amounts—in the billions of dollars—to settle claims brought by the federal government. Drug makers such as GlaxoSmithKline, PLC; Sanofi SA; Bristol-Myers Squibb Co.; and Teva Pharmaceutical Industries Ltd. are being looked at by the attorneys general of several states. It is expected that the states will utilize consumer-protection laws typically used to prosecute abusive debt collectors and deceptive car sellers, the Journal noted.

Some allegations against drug makers of consumer-law violations have been resolved in multi-state settlements. For instance, the $181 million Johnson & Johnson agreed to pay in 2012 to settle consumer-protection claims by 36 states and the District of Columbia (DC) over the way in which it promoted its antipsychotic, Risperdal, for unapproved uses, said the Journal. The drug maker never admitted to any wrongdoing or legal or regulatory violation, but said it agreed to the settlement to avoid additional litigation.

In other cases, some states have pursued drug makers alone, which has led to large single-state awards and settlements, said the Journal. “More states feel empowered to bring these kinds of actions solo,” said David Hart, an assistant attorney in charge of the financial fraud and consumer-protection section of the Oregon Justice Department.

This February, attorneys general in Kentucky and Maryland filed lawsuits against GlaxoSmithKline in their state courts, alleging the drug maker deceptively marketed Type 2 diabetes drug, Avandia. According to the allegations, Glaxo misrepresented Avandia’s—which has been linked to increased heart attack and stroke risks—safety and efficacy. Five other states are also pursuing similar lawsuits over Glaxo and Avandia, opting out of a 2012 settlement with Glaxo in which the drug maker agreed to pay $90 million to settle consumer-protection claims by 37 other states and DC, said the Journal.

“In the case of Avandia, we opted out of the multistate because we felt we could obtain a better result by taking our own action,” said a spokeswoman for the Kentucky Office of the Attorney General. A spokesman for the Maryland Office of the Attorney General declined to comment to the Journal.

In 2012, an Arkansas state judge ordered Johnson & Johnson to pay $1.2 billion after a jury found its prior marketing of Risperdal violated state consumer-protection and Medicaid-fraud laws. That case was brought by the Arkansas attorney general, said the Journal. The drug maker was also mandated to pay large penalties in other lawsuits brought by attorneys general in South Carolina and Louisiana, and last year agreed to pay $158 million to settle a Texas Risperdal lawsuit.

As we’ve written, Johnson & Johnson was previously accused of marketing Risperdal as a safe and effective treatment for some symptoms of dementia among the elderly. Risperdal is only approved to treat schizophrenia and symptoms of bipolar disorder and actually increases the risk of death in the elderly who suffer from dementia. The drug was being marketed illegally to treat symptoms including irritability and aggression among dementia sufferers and was also illegally marketed to treat symptoms of Alzheimer’s disease, which also increased patient risks of death and serious injuries.

Plaintiffs’ law firms have also begun pushing consumer-protection lawsuits to state attorneys general and some states have moved this litigation to outside counsel after issuing requests for proposals (RFPs) for the work. For the most part, state officials are not required to prove a drug maker’s marketing led to injury or harm in these cases, explained the Journal. The state need only convince a judge or jury that a drug’s marketing was in some way deceptive.

While it is not illegal for a physician to prescribe a drug for an off-label treatment, it is a violation of U.S. Food and Drug Administration (FDA) regulations for the manufacturer of the drug to do so. Any new indications for a prescription drug must first receive FDA approval and requires extensive clinical safety trials to determine that the drug provides a benefit to a new class of patients.

Meanwhile, attorneys general of Mississippi and West Virginia have sued Bristol-Myers and Sanofi over Plavix and South Carolina has sued Teva’s Cephalon unit, over the way in which it promoted Provigil for unapproved uses, said the Journal.

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