Health Care Funds Push for Class Cert. in Celexa Drug MDL

Law360, New York (May 9, 2016, 4:05 PM ET) -- Health care fund providers seeking to recover money lost because of Forest Laboratories' allegedly fraudulent promotion of its drugs in treating pediatric depression pressed a Massachusetts federal judge to certify their portion of the multidistrict litigation as a class, saying previous court rulings and common issues called for it.

The private third-party payors, led by Painters and Allied Trades District Council 82 Healthcare Fund, contend they were forced to pay for patients' use of Celexa or Lexapro because of the drugmaker's allegedly misleading statements to consumers about the effectiveness of those antidepressants on children. Both the consumers and third-party payors in the MDL have alleged violations of the Racketeer Influenced and Corrupt Organizations Act, and the payors said in a class certification support brief filed Friday those claims can be established using common proof.

The dispute with Forest is almost identical to a 2013 MDL between Pfizer Inc., the manufacturer of the drug Neurotin, and a group of third-party payors who also alleged RICO violations and overpayment caused by misleading statements, and likewise sought certification on those claims, Painters wrote in the brief.

That case eventually made its way up to the First Circuit, which decided that the third-party payors could use an economic model based on aggregate data to establish the causation and damages elements of their RICO claims, Painters said.

Before class certification was granted in that dispute, the parties settled, but nonetheless, the third-party payors in this dispute are using the exact same economic model that the First Circuit already upheld, making their classwide RICO damages and causation claims viable, Painters argued.

The group of health and benefits fund providers on Friday also struck back against Forest's argument that class certification was inappropriate given that the statute of limitations might apply to each individual third-party payor's claim. In reality, the First Circuit has previously held that the presence of such issues is not an automatic disqualifier for class certification, Painters wrote Friday.

Forest had also argued that Painters' proposed damages model didn't accurately reflect the fund's theory that Forest's fraud caused them to pay more for prescriptions than it would have absent the fraud. But Painters responded Friday that the damages model estimates how many prescriptions were written for Celexa and Lexapro because of Forest's allegedly fraudulent off-label promotion of the drugs for pediatric depression, exactly matching the fund's theory of liability.

The fund also disputed Forest's contention that it was impossible to establish classwide injury because that would require evaluation of the drugs' effectiveness for individual health plan members.

On the contrary, the First Circuit has held that a third-party payor can establish that a drug is generally ineffective by providing "multiple clinical trials" demonstrating the drugs are "no more effective than a placebo in treating the off-label conditions at issue" Painters wrote.

-Once that showing is made, there is no need to delve into individual experiences with the drug, since the clinical trial data is "enough to raise a genuine issue of fact on the effectiveness issue," Painters wrote, quoting the First Circuit.

The third-party payors are but one part of the Forest MDL, which dates back almost seven years, court documents show.

The consumers in the dispute, led by Delana S. Kiossovski and Renee Ramirez, filed a first amended complaint in January alleging that Forest engaged in a deceptive marketing scheme that misled doctors about the efficacy of Celexa and Lexapro, causing them to purchase ineffective drugs on behalf of their children. Forest earlier this year sought to dismiss that amended complaint.

The New York-based drugmaker has achieved mixed results battling a string of cases arising from the company's purported cover-up of studies finding Celexa and Lexapro were ineffective in treating depression in children. In 2002, the U.S. Food and Drug Administration found Celexa was no more effective as an antidepressant for children than a placebo. Celexa is currently FDA-approved for patients 18 and older, while Lexapro is FDA-approved for adolescents ages 12 to 17 and for adults, court records show.

In March 2014, Forest agreed to pay between $7.7 million and $10.4 million to settle litigation by a proposed class of parents and third parties in Missouri who purchased Celexa for a patient under the age of 18 between Jan. 1, 1998, and Dec. 31, 2013, or Lexapro for a minor between Aug. 1, 2002, and Dec. 31, 2013.

The drugmaker prevailed in defeating other proposed class actions as well, including a complaint brought by California purchasers of Lexapro.

Representatives for both Forest and the third-party payors didn't immediately return a request for comment Monday.

The Painters plaintiffs are represented by Christopher L. Coffin and Nicholas R. Rockforte of Pendley Baudin & Coffin LLP, Michael L. Baum and R. Brent Wisner of Baum Hedlund Aristi & Goldman PC and T. Joseph Snodgrass and Shawn M. Raiter of Larson King LLP.

Forest is represented in the Painters case by Edwin G. Schallert, Kristin D. Kiehn, Peter S. Ross, J. Robert Abraham, Noelle E. Lyle and Danielle E. Kasten of Debevoise & Plimpton LLP and Joshua D. Nadreau of Sugarman Rogers Barshak & Cohen PC.

The Painters case is Painters and Allied Trades District Council 82 Health Care Fund v. Forest Pharmaceuticals Inc. et al., case number 1:13-cv-13113, in the U.S. District Court for the District of Massachusetts.

The MDL is In re: Celexa and Lexapro Marketing and Sales Practices Litigation, case number 1:09-md-02067, in the U.S. District Court for the District of Massachusetts.

The article was written by Steven Trader and published by Law360:
Additional reporting by Suevon Lee. Editing by Jill Coffey.
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