By its written opinion dated January 28, 2014, the Supreme Court of Louisiana (“Louisiana Supreme Court”) reversed (overturned) a lower court’s verdict that had awarded civil penalties in the amount of $257,679,500.00, attorney fees in the amount of $70,000,000.00, and costs in the amount of $3,000,200.00 against the defendant pharmaceutical companies for alleged misconduct in marketing certain drugs in violation of the Louisiana Medical Assistance Programs Integrity Law (“MAPIL”).
The lower appellate court had affirmed the verdict but the Louisiana Supreme Court reversed, finding that the Attorney General failed to prove that the defendant drug manufacturers violated provisions of MAPIL (La. Rev. Stat. 46:438.3) by their label statements regarding the potential risk of side effects from the use of Risperdal (an atypical anti-psychotic drug introduced in 1994).
The Louisiana Supreme Court found that the Attorney General failed to establish sufficient facts to prove a cause of action against the defendants under MAPIL because there was insufficient evidence produced at trial that any defendant engaged in fraud, misrepresentation, abuse or other ill practices seeking to obtain, pursuant to a claim made against the medical assistance program funds, payments to health care providers or other persons to which the health care providers or other persons were not entitled.
The Attorney General had filed its lawsuit in September 2004 against Janssen Pharmaceutica, Inc. and Johnson & Johnson (“defendants”), alleging the improper marketing of Risperdal, which was manufactured by the defendants. The Attorney General alleged that the defendants knowingly misrepresented that Risperdal was safer and/or more effective than other antipsychotics; that the defendants’ marketing misrepresentations affected the decisions of prescribing physicians, who relied upon the misleading information disseminated by the defendants; that the defendants knew that many of the prescriptions written for Risperdal would be paid for by Louisiana’s Medicaid program; that the State would not have purchased, or reimbursed for, Risperdal had it known of the defendants’ misrepresentations; and, that the State had suffered actual damages in excess of one thousand dollars related to misrepresentations made by the defendants in the marketing of Risperdal.
Like all atypical antipsychotic drugs, Risperdal carries an increased risk of hyperglycemia and diabetes-related adverse events. The FDA required the manufacturers of Risperdal to add a specifically-worded warning to its label and to advise all health care providers nationwide of the label change. The defendants sent the required letter to all health care providers nationwide on November 10, 2003, but added additional statements to the label that had not been approved by the FDA. The Attorney General alleged that the additional statements constituted off-label statements by which the defendants engaged in misrepresentation in an attempt to defraud Medicaid by failing to truthfully and fully disclose information required under MAPIL.
The FDA’s Division of Drug Marketing, Advertising and Communications (“DDMAC”) sent a warning letter to the defendants on April 19, 2004, directing them to deliver corrective information about Risperdal to the recipients of its November 10, 2003 letter, relating to hyperglycemia and diabetes. On July 21, 2004, the defendants provided the corrective information to the recipients of their November 10, 2003 letter. The DDMAC closed the matter in October 2004, without taking any further action.
In reviewing the lower courts’ decisions and pertinent Louisiana law, the Louisiana Supreme Court stated that the purpose of MAPIL was “to combat and prevent fraud and abuse committed by some health care providers participating in the medical assistance programs and by other persons and to negate the adverse effects such activities have on fiscal and programmatic integrity.” La. Rev. Stat. 46:437.2(A). The Louisiana Supreme Court further noted the following: La. Rev. Stat. 46:438.3(A) provides: “No person shall present or cause to be presented a false or fraudulent claim;” La. Rev. Stat. 46:438.3(B) provides: “No person shall knowingly engage in misrepresentation to obtain, or attempt to obtain, payment from medical assistance programs;” and, La. Rev. Stat. 46:438.3(C) provides: “No person shall conspire to defraud, or attempt to defraud, the medical assistance programs through misrepresentation or by obtaining or attempting to obtain, payment for a false or fraudulent claim.”
The Louisiana Supreme Court determined that “[t]here is no evidence in this record that the defendants’ improper marketing statements caused any health care provider or his billing agent to submit a claim for payment the provider or his agent knew was false or misleading or that violated a federal or state law or rule. Accordingly, we find that La. Rev. Stat. 46:438.3(A) does not apply to the defendants’ improper marketing statements.”
The Louisiana Supreme Court further stated, “there was no showing the defendants either failed to disclose or concealed information required on a claim for payment made against the medical assistance program funds. See La. Rev. Stats. 46:437.3(15) and (6). Further, there was no showing that the off-label statements, even if misleading, were made to the Department of Health and Hospitals relative to the medical assistance programs in an attempt to obtain payment on a claim made against the medical assistance programs. See La. Rev. Stats. 46:438.3(B) and 46:437.3(15). Accordingly, we find La. Rev. Stat. 46:438.3(B) also does not apply to the defendants’ improper marketing statements.” Lastly, “[t]he purpose of MAPIL is to prevent false or fraudulent claims from being presented to and paid by the medical assistance programs. Thus, there must be a causal link between the misleading marketing statement and a false or fraudulent claim for payment to a health care provider or other person to establish liability under MAPIL. Accordingly, we find La. Rev. Stat. 46:438.3(C) also does not apply to the defendants’ improper marketing statements.”
Source Caldwell v. Janssen Pharmaceutical, Inc., et al., Case Nos. 2012-C-2447 c/w 2012-C-2466.
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