Consumer Protection Laws And Prescription Meds: A Poor Fit

by Pepper Hamilton LLP
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This article was published in the Appellate, Class Action, Consumer Protection, Health, Life Sciences, Product Liability and Public Policy sections of Law360 on December 4, 2013. © Copyright 2013, Portfolio Media, Inc., publisher of Law360. It is republished here with permission.

Purchasers of prescription medications often file class actions in large, multidistrict litigation alleging that they were defrauded by manufacturers. In these actions, patients, many of whom disclaim any physical injury, become plaintiffs in the hope of obtaining a refund and, in some instances, treble or punitive damages. Yet, the consumer protection statutes relied on by these plaintiffs are a poor fit for claims based on prescription medications. This article discusses several of the unique defenses available to defendant manufacturers, which arise from the discord between these statutes and prescription medications.

Liability Requires Proof of a Causal Connection or Reliance by the Consumer — Consumers Rely on Their Physician, Not the Manufacturer

Most consumer protection statutes require that a plaintiff establish some link or connection between an alleged misrepresentation made by the defendant manufacturer and the consumer’s purchase of the product at issue. In other words, plaintiffs must usually show that the alleged misstatement about the product either resulted in or in some way affected their decision to purchase the product. In some instances, a showing of justifiable reliance is also required, either as a result of an express provision within the statute or as part of the court’s analysis of causation.

But in the context of pharmaceutical litigation, the plaintiffs are different for a simple reason: a patient cannot obtain a prescription medication without a physician’s intervening decision to prescribe it. This makes it difficult for the patient to show that any misrepresentation communicated to him or her resulted in the purchase of the prescription medication. Under the learned intermediary doctrine, the manufacturer’s obligations to warn about the safety of its products run to the physician, not the patient. Consumer protection statutes, therefore, should not provide a cause of action to the purchaser of a prescription medication because a direct link to the patient is absent.

In a recent decision involving the prescription diabetes medication Avandia, Federal District Judge Cynthia Rufe dismissed a consumer class action brought under the Pennsylvania consumer protection statute for these reasons. The court held that the learned intermediary doctrine barred plaintiff’s claims because the plaintiff could obtain Avandia only with a physician’s prescription, and the claims concerning his physicians’ exposure to and reliance on alleged misleading information were insufficient. Morgan v. SmithKline Beecham Corp. (Avandia Mktg., Sales Practices & Prods. Liab. Litig.), No. 10-2401, 2013 U.S. Dist. LEXIS 96869, at *8 (E.D. Pa. July 10, 2013).

Other federal judges have reached the same conclusions.

For example, in another decision interpreting the Pennsylvania consumer protection law, District Judge Curtis Joyner dismissed a consumer class action involving several prescription medications manufactured by Pfizer, finding that while there is “no categorical exception for prescription drugs from the [Pennsylvania statue],” “the existence of the ‘learned intermediary’ doctrine in Pennsylvania makes it difficult, if not impossible, for plaintiffs to successfully bring a claim based on a prescription drug.” Zafarana, 2010 U.S. Dist. LEXIS 72560, at *26. As did Judge Rufe, Judge Joyner dismissed the claims because they depended on a chain of reliance between the plaintiff and defendant manufacturer that flowed through the plaintiff’s doctor rather than directly to the plaintiff himself. Id. at *29. Because the learned intermediary doctrine provides that manufacturers owe a duty to warn only a patient’s doctor about their products, the plaintiff could not claim that he justifiably relied on any statements made by the manufacturer. Id. Thus, his consumer protection claim failed.

Judges elsewhere embrace similar reasoning. See, e.g., Scelta v. Boehringer Ingelheim Pharmaceuticals Inc., 404 F. Appx. 92, 94 (8th Cir. 2010) (Florida law bars consumer protection claims under the learned intermediary doctrine); Saavedra v. Eli Lilly & Co., No. 2:12-9366, 2013 U.S. Dist. LEXIS 90481, at *9-12 (C.D. Cal. June 13, 2013) (“[T]he court concurs with the great weight of authority and concludes that the learned intermediary doctrine applies to the consumer protection claims at issue.”); Kee v. Zimmer Inc., 871 F. Supp. 2d 405, 411 (E.D. Pa. 2012) (dismissing a Pennsylvania consumer protection claim because the “learned intermediary doctrine breaks the chain of causation and reliance”); Beale v. Biomet, Inc., 492 F. Supp. 2d 1360, 1372 (S.D. Fla. 2007) (observing that “[o]ther district courts have found that the learned intermediary doctrine applied to claims including state deceptive and unfair trade practices laws” and concluding that, consistent with precedent elsewhere, the doctrine applied to plaintiff’s claim under Florida law as well); Smith v. Bristol-Myers Squibb, No. 3:06-6053, 2009 U.S. Dist. LEXIS 121062, at *17-19 (D.N.J. Dec. 30, 2009) (“[T]he learned intermediary doctrine indeed operates to bar Plaintiff’s [Pennsylvania] UTPCPL claim.”).

In 2010, the Supreme Court of Appeals of West Virginia went even further and held that private claims relating to prescription drugs were categorically incompatible with the state’s consumer protection statute because of the unique role played by a patient’s physician in any decision to purchase. White v. Wyeth, 705 S.E.2d 828, 837-38 (W. Va. 2010). The court reasoned that a “causal connection” could not exist in the context of prescription drug purchases “because the consumer cannot and does not decide what product to purchase.” Id.

Legislatures in Some States Have Barred Consumer Protection Claims Based on Alleged Failures to Warn About Risks of Prescription Products

Some states have enacted sweeping product liability acts that prohibit a patient from attacking the safety of a prescription product under the state’s consumer protection statute, even if the patient seeks only economic damages.

For example, courts have held that the New Jersey Product Liability Act (NJPLA) “encompass[es] virtually all possible causes of action relating to harms caused by consumer and other products.” In re Lead Paint Litig., 924 A.2d 484, 436-37 (N.J. 2007). Thus, any claims pertaining to harm caused or threatened by a product — whether it be personal injury or strictly monetary — must be brought under the NJPLA. Efforts by plaintiffs to circumvent the NJPLA by bringing these claims under the state consumer fraud act have been rejected. See, e.g., D’Apuzzo v. SmithKline Beecham Corp. (In re Avandia Mktg.), No. 07-4963, 2013 U.S. Dist. LEXIS 148641, at *5-6 (E.D. Pa. Oct. 15, 2013); Vercellono v. Gerber Prods., No. 09-2350, 2010 U.S. LEXIS 9477, at *20-21 (D.N.J. Feb. 3, 2010); Arlandson v. Hartz Mt. Corp., No. 10-1050, 2011 U.S. Dist. LEXIS 56462, at *23-27 (D.N.J. May 26, 2011).

The Louisiana Products Liability Act (LPLA) also sets forth an exclusive means of recovery against a manufacturer for damage caused or threatened by a consumer product. La. R.S. 9:2800.51–.60. Accordingly, several courts have held that fraud based claims are subsumed by the LPLA, even where only economic injuries are sought. See, e.g., Bearly v. Brunswich Mercury Marine Div., 888 So. 2d 309, 312-14 (holding that claims for economic losses unrelated to personal injury from a defective product can only be brought under the LPLA or the Redhibition Act); see also Maurice v. Eli Lilly & Co., No. 04-3105, 2005 U.S. Dist. LEXIS 36534, at *4 (E.D. La. Nov. 7, 2005) (“[A]ll claims for negligence, fraud, negligent misrepresentation, intentional misrepresentation, intentional infliction of emotional distress and redhibition, which were the non-LPLA claims . . . shall be dismissed”); Ingram v. Bayer Corp., No. 02-0352, 2002 U.S. Dist. LEXIS 10402, at *2 (E.D. La. May 30, 2002) (“[T]he LPLA does not allow the plaintiff to recover for negligence, gross negligence, strict liability, fraud, misrepresentation, concealment, conspiracy, suppression, and willful, wanton and reckless conduct . . . .”).

Elsewhere, legislatures have exempted business transactions that are regulated by federal law from the reach of consumer protection statutes. This has prompted some courts to hold that claims relating to the marketing of prescription medications fall outside of their reach. In Ball v. Takeda Pharms Am Inc., for example, a federal judge dismissed a claim brought under Virginia’s Consumer Protection Act (VCPA) seeking a refund of the purchase price of Dexilant, an acid reflux drug, because the VCPA excluded claims involving consumer transactions authorized under state or federal law. No. 3:13-00168, 2013 U.S. Dist. LEXIS 112143, at *26-27 (E.D. Va. Aug. 8, 2013) (quoting Va. Code § 59.1-199(A)). Because the product at issue was a prescription drug whose warning labels are regulated by federal law, the court held that plaintiff’s claim was barred. Id. Likewise, a federal court dismissed another plaintiff’s consumer protection claim by relying on a closely-worded exemption found in Oklahoma’s Consumer Protection Act. Arnett v. Mylan Inc., No. 2:10-00114, 2010 U.S. Dist. LEXIS 50460, at *10 (S.D. W. Va. May 20, 2010).

Although a number of states have exclusivity provisions or exemptions within their products liability and consumer fraud statutes, courts vary in the degree to which they have permitted or disallowed statutory fraud claims relating to prescription medications. Thus, it is important that defense counsel examine the applicable statutory framework at an early stage of the litigation to determine whether a viable argument for dismissal on these grounds exists.

Congress Has Signaled that the FDA Regulates Prescription Drug Advertising, Not the FTC, or by Inference, State Consumer Protection Agencies

In states where the appellate courts have not grappled with the interplay between the consumer protection statutes and prescription medications, a court should consider the federal analog — the Federal Trade Commission Act — and its manner of enforcement for guidance. See Reingold v. Swiftships Inc., 126 F. 3d 645, 652-53 (5th Cir. 1997) (stating that LUTPA is modeled after the Federal Trade Commission); accord Omnitech Int’l Inc. v. Clorox Co., 11 F. 3d 1316, 1331-32 (5th Cir. 1994). At the federal level, the U.S. Food and Drug Administration, rather than the FTC, is responsible for enforcing truthful advertising and labeling of prescription medications. See 21 U.S.C. § 352(n) (2012); Memorandum of Understanding Between The Federal Trade Commission and The Food and Drug Administration, 225-71-8003, May 14, 1971, available at http://www.fda.gov/AboutFDA/PartnershipsCollaborations/MemorandaofUnderstandingMOUs/DomesticMOUs/

ucm115791.htm (last viewed Nov. 20, 2013).

Because so many state consumer protection statutes are based on the FTC Act, the removal of prescription products from the FTC’s area of responsibility may persuade courts that enforcing truthful marketing should be left solely to the FDA rather than concurrently regulated through state consumer protection actions. Decisions rendered to date, however, do not reflect that courts have looked to the division of enforcement between the FDA and FTC as guiding with regard to state consumer protection statutes. Accordingly, defendants should be aware of the potential limitations of this argument notwithstanding its common sense appeal.

Conclusion

Given the proliferation in recent years of consumer class actions brought against pharmaceutical companies, and the enormous litigation expenses that follow class certification, defense counsel should explore every avenue of obtaining dismissal at early stages of litigation.

The purchase and sale of prescription drugs takes place in a market environment unlike that of any other product. Users of prescription medications have an educated professional — their doctor — who mediates their transactions with the manufacturer and ultimately makes the decision as to whether the consumer can receive the medication. In addition, the interests of patients who purchase prescription medications are already protected by the FDA and by tort law, making the use of consumer protection statutes unnecessary and duplicative. Thus, consumer protection statutes are a poor fit for claims brought by purchasers of prescription medications.

Fortunately for manufacturers of prescription medications who find themselves the targets of consumer class actions, several unique defenses exist, which proactive defense counsel may be able to employ to eliminate these actions well before class certification is reached.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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