RICO Act -- 2017

Sidney Hillman Health Ctr. v. Abbott Labs., Inc.   (7th Circuit)

RICO drug pricing case -- proximate cause issue

On June 12, 2017, the NAM filed an amicus brief in the 7th Circuit arguing that pharmaceutical companies should not be subject to treble damage litigation under the Racketeer Influenced and Corrupt Organizations Act (RICO) for alleged misrepresentations to doctors about the efficacy of a prescription drug (Depakote). Our brief reasons that RICO liability requires a direct connection between a misrepresentation and an injury, and there are simply too many intervening factors between the company and the ultimate use of the drug, including the physicians’ independent judgment in prescribing the drug, to satisfy the directness requirement.

Imposing liability in cases like this will chill medically important communications between manufacturers and physicians depriving physicians of truthful, beneficial scientific information, and ultimately denying patients the advantage of informed medical treatment. Furthermore, the imposition of liability will open an abusively lucrative new avenue for litigation by third-party payors in the health-care system.

On Oct. 12, 2017, the 7th Circuit ruled that any connection between misrepresentations to doctors and claims for damages by third-party payors is too remote to prove causation -- an essential element in a RICO case. Too many other factors may have affected the ultimate decision to use the drug, as well as purported damages attributable to the cost of the drug or alternatives that a patient might have used. The company was already convicted and fined for off-label marketing, and additional claims from third-party payors are too remote for RICO claims.

Related Documents:
NAM amicus brief  (June 12, 2017)


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