Chicago given third try at pressing opioid deception fraud suit vs drugmakers

By Dan Churney | Oct 3, 2016

A Chicago federal judge is giving the city of Chicago a third chance at refining a lawsuit in which the city claims it paid $13 million in ineligible prescription claims through city health insurance, because several drug companies worked to fool doctors into believing their pain killer products posed little risk to patients.

The Sept. 29 decision was delivered by Judge Jorge Alonso of the U.S. District Court for Northern Illinois.

In June 2014, the City of Chicago filed suit against a number of drug manufacturers and their associated entities, alleging the companies conspired to commit consumer and insurance fraud, as well as other violations of municipal code and state law. Several of the defendants were dismissed from the suit, leaving five companies in the case: Cephalon, Actavis, Endo Pharmaceuticals, Purdue Pharma and Janssen Pharmaceuticals.

The city alleged the companies used deception, in the Chicago area and elsewhere, to encourage doctors to prescribe the companies’ opioid products for the treatment of chronic pain, by downplaying the risks and overstating the benefits, telling doctors most patients could safely use the drugs.

This allegedly misleading message was delivered by physicians speaking on the drug companies' behalf and by the companies’ sales representatives. The companies also allegedly collaborated with “front” groups and “key opinion leaders” to advance this deception, according to court papers.

As a consequence, the city said it paid more than $13 million in opioid prescription claims, through city health plans, for claims that should have been ineligible, because of the companies’ alleged fraudulent conduct.

Defendants filed motions to dismiss. Judge Alonso rejected most of their arguments, but did accept their contention the city failed to show that “prescribers,” who prescribed opioids for which the city paid claims, had been exposed to defendants’ allegedly false advertising.

“It is impossible for the Court or defendants to decipher whether the prescribers who heard defendants’ deceptive messages are the same individuals who prescribed defendants’ drugs that were subsequently paid for by the City,” Alonso concluded.

Alonso referred to this element as the city’s “missing link,” which the municipality must provide in order to go forward. To this end, Alonso gave the city until Oct. 31 to replead their case and try to make good this shortcoming. If the city does so, it will be the city’s third amended complaint.

Alonso further faulted the city’s case, saying that regardless whether the drug companies tried to mislead doctors and the public, the companies did not force doctors and consumers to use their opioids.

The city of Chicago has been represented by city attorneys, as well as by Cohen, Millstein, Sellers & Toll, of Washington D.C. and the Chicago firm of Wexler Wallace LLP.

The drug makers are defended by Honigman, Miller, Schwartz & Cohn, of Chicago; Morgan, Lewis & Bockius, of Philadelphia; Arnold & Porter, of Washington D.C.; Sidley Austin LLP, of Chicago; Foley & Lardner, of Boston; and Skadden, Arps, Slate, Meagher & Flom, Chicago.

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Organizations in this Story

Actavis Arnold & Porter LLP City of Chicago Cohen Milstein Sellers & Toll Endo Pharmaceuticals, Inc. Foley & Lardner LLP Honigman Miller Schwartz and Cohn LLP Janssen Pharmaceuticals Inc Morgan, Lewis & Bockius LLP Purdue Pharma L.P Sidley Austin LLP Skadden, Arps, Slate, Meagher & Flom LLP Wexler Wallace LLP

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