California federal court: off-label promotion - state law consumer fraud claims and federal RICO claims are not necessarily preempted by Food, Drug and Cosmetics Act
Locke Lord LLP
USA February 9 2009
The United States District Court for the Central District of California recently held that state law consumer fraud claims and federal fraud claims pursuant to the Racketeer Influenced and Corrupt Organizations Act ("RICO") are not preempted by the federal Food, Drug and Cosmetics Act ("FDCA") if such claims are based on specifically identifiable false or misleading representations or material omissions. In re: Epogen & Aranesp Off-Label Marketing & Sales Practices Litigation, MDL 08-1934 PSG (AGRx) (Dec. 17, 2008). However, if such claims are based solely on allegations that the respective defendants violated the FDCA, then the claims are preempted.
The case involves a group of seven health benefit plans accusing Amgen, Inc., DaVita, Inc. and Fresenius Medical Care Holdings, Inc. of unlawfully promoting the off-label use of two drugs, Epogen and Aranesp (collectively, "EPO"), between 2002 and 2007. The FDA approved the drugs for treatment of anemia in chronic renal failure patients, HIV-infected patients and cancer patients on chemotherapy. However, the plaintiffs allege that the defendants engaged in a fraudulent scheme that caused plaintiffs and other persons and entities to pay millions of dollars for EPO prescribed for ineffective and unsafe off-label uses in violation of RICO and state competition and advertising laws.
Specifically, the plaintiffs contend that from 2002 to at least 2007 Amgen issued a number of press releases on the positive results of clinical studies on the off-label use of Aranesp while concealing the fact that such clinical studies were not conducted by independent researchers. The plaintiffs also allege that Amgen concealed or minimized the results of studies demonstrating adverse risks associated with off-label uses of EPO, such as higher incidence of heart attacks, strokes, tumor growth, and death. In addition, the plaintiffs assert that the defendants engaged in a scheme to boost profits by unlawfully promoting the intravenous administration of EPO to treat anemia in kidney dialysis patients, even though this route of administration had dangerous results.
The defendants moved for dismissal of the complaint. In an order dated December 17, 2008, the Court stated that the plaintiffs' suit was largely an attempt to bring a private cause of action for violations of the FDCA and noted that the FDA regulations prohibit drug manufacturers from promoting off-label uses of prescription drugs and that advertising of a drug that is not in compliance with FDA regulations causes a drug to be "misbranded" in violation of the FDCA. Therefore, RICO and state law consumer fraud claims based primarily on allegations that Defendants promoted EPO for off-label uses are preempted by the FDCA.
However, the Court further held that, if the Plaintiffs can identify specific false or misleading statements or material omissions that the defendants made to mislead health care professionals and consumers, the claims are actionable under RICO and California consumer fraud laws because the FDCA does not preempt claims of fraud or false advertising. Since the plaintiffs' Complaint intertwined allegations of RICO and state law consumer fraud violations with allegations of illegal off-label promotion of EPO, the Court dismissed the complaint in its entirety, but granted the plaintiffs leave to amend.
Click here to review a copy of the court's order.
Federal preemption
Racketeer Influenced and Corrupt Organizations Act 1970 (RICO) (USA)
US District Court for Central District of California
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