Takeda, Lilly Rejected by Supreme Court on Actos Fraud Lawsuit

The U.S. Supreme Court cleared the way for a multibillion-dollar racketeering lawsuit that accuses Takeda Pharmaceutical Co. and Eli Lilly & Co. of marketing the Actos diabetes drug without disclosing its link to bladder cancer.

In a one-line order Monday, the high court refused to consider the companies’ contention that the case shouldn’t go forward as a class action on behalf of tens of thousands of insurers and other so-called third-party payers who covered the cost of Actos prescriptions. The drug companies said a federal appeals court improperly approved the group suit without a viable way of excluding class members who hadn’t suffered any harm.

Business groups had eyed the case as a way to put new limits on class actions. The U.S. Chamber of Commerce and industry-backed Pharmaceutical Research and Manufacturers of America joined the companies in urging Supreme Court review.

The appeals court ruling “threatens manufacturers with enormous class action exposure whenever a plaintiff alleges that purported misstatements or omissions in marketing materials or drug labeling may have resulted in additional prescriptions or higher prices,” the trade groups argued.

The union health care fund pressing the case urged the Supreme Court to reject the appeal. The fund told the court that the vast majority of class members covered the cost of more Actos prescriptions than they would have had the cancer risks been adequately disclosed.

“The probability that any given class member was injured exceeds 98% and the injury-producing conduct and its economic effects are provable through common, admissible evidence,” the Minnesota-based Painters and Allied Trades District Council 82 Health Care Fund argued. The suit accuses the companies of violating the U.S. Racketeer Influenced and Corrupt Organizations Act.

The class covers all third-party payers that reimbursed the cost of five or more separate Actos prescriptions. Takeda and Lilly said the plaintiffs provided no way to determine “which of the millions of prescriptions at issue in fact would not have been made, let alone which TPPs paid for each of those prescriptions.”

The companies in their appeal described the case as a “multibillion-dollar” dispute covering millions of prescriptions. Takeda agreed in 2015 to pay $2.37 billion to resolve US lawsuits from patients accusing it of hiding Actos’ cancer risks.

The case is Takeda v. Painters and Allied Trades District Council, 25-625.

Top photo: The U.S. Supreme Court in Washington. Bloomberg.