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Saturday, May 18, 2024 | Back issues
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Court Boots RICO Suit Against Drugmakers

MARSHALL, Texas (CN) - A claims processor will get another chance to show that Pfizer and its subsidiary caused it economic damages by deceptively marketing various drugs, a federal judge ruled on Friday.

Pfizer and Pharmacia & Upjohn promoted off-label use and inflated demand for the antipsychotic Geodon, the antiepileptic Lyrica, and the antibacterial agent Zyvox, according to a federal complaint filed by Health Care Service Corp. Based in Chicago, HCSC says it processes "millions of claims" for its accounts serviced out of Marshall, Texas, and it lists Blue Cross Blue Shield of Texas among its divisions.

The company sued Pfizer, the Pharmacia & Upjohn subsidiary, Senior Vice President Rick Burch and Efren Olivares, who HCSC says served as the national head of Geodon marketing.

"Defendants' deceptive marketing practices and other improper conduct violated federal and state law and caused health plans to reimburse for prescriptions that Defendants knew had not been approved by the FDA," the complaint states.

HCSC says that Pfizer paid the U.S. government millions to settle allegations that it pushed off-label marketing of the three drugs at issue and provided kickbacks for health care professionals.

"Although Pfizer has settled its litigation with the United States, third party payors have not received any compensation to date for the damages incurred due to Defendants' deceptive practices with regards to these three drugs," HCSC says.

HCSC is seeking punitive and treble damages for violations of federal anti-racketeering law, common law fraud, deceptive trade practices, negligence, conspiracy and unjust enrichment.

The case suffered a blow on Friday, however, when U.S. District Judge David Folsom granted Pfizer and Pharmacia's motion to dismiss.

The brief order, which adopts the recommendations of U.S. Magistrate Judge Charles Everingham IV, denies the balance of the motion to dismiss without prejudice to re-urging, provided that HCSC can allege economic injury and causation.

HCSC has 14 days to amend its complaint and address two deficiencies to move forward: "(1) what, if any misrepresentations were made directly to it; and (2) whether doctors, or other health professionals, relied upon any Pfizer misrepresentations, as opposed to their own professional judgment, when prescribing the drugs at issue in this lawsuit for off-label uses."

HCSC has a similar case that involves the drugs Geodon, Lyrica and Bextra now pending in the Northern District of California.

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