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In re Yasmin and Yaz Marketing

August 5, 2010

IN RE: YASMIN AND YAZ MARKETING, SALES PRACTICES AND PRODUCTS LIABILITY LITIGATION
THIS DOCUMENT RELATES TO: PHILADELPHIA FIREFIGHTERS UNION LOCAL NO. 22 HEALTH AND WELFARE FUND, ET AL., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
BAYER HEALTHCARE PHARMACEUTICALS INC., ET AL. DEFENDANTS.



The opinion of the court was delivered by: David Herndon Chief Judge

MDL No. 2100

(DROSPIRENONE)

ORDER

This cause comes before the Court for consideration of Defendant Bayer's motion to dismiss (Doc. 36) Plaintiffs' First Amended Complaint. (Doc. 21). Plaintiffs filed a response to the motion (Doc 39) and Bayer subsequently filed a reply. (Doc. 40). Oral arguments were heard on July 1, 2010. Upon careful consideration of the parties' arguments, the Court determines that Bayer's motion to dismiss shall be GRANTED.

I. INTRODUCTION

Plaintiffs (Philadelphia Firefighters Union Local No. 22 Health and Welfare Fund and American Federation of State, County and Municipal Employees, District Council 47 Health and Welfare Fund), are health and welfare benefit funds that directly or indirectly pay for prescription drugs for their participants and their participants' dependents (health and welfare benefit funds such as Plaintiffs are commonly referred to as third party payors). (Doc. 21 ¶¶ 6-7). Plaintiffs seek to represent a proposed class consisting of "[a]ll third party payors in the United States and its territories that purchased, reimbursed, and/or paid for all or part of the cost of YAZ dispensed pursuant to prescriptions in the United States." (Doc. 21 ¶ 123).

Defendants are Bayer HealthCare Pharmaceuticals, Inc., Bayer Corporation, Bayer HealthCare LLC, and Bayer Schering Pharma AG (collectively "Bayer"). Bayer manufactures and markets the oral contraceptive YAZ.

Plaintiffs contend that Bayer and their associates engaged in (and conspired to engage in) a fraudulent, misleading, and unlawful advertising campaign ("fraudulent advertising campaign") that wrongfully promoted YAZ as safe and effective for unapproved off-label uses and concealed or omitted facts pertaining to YAZ's safety profile. (See e.g., Doc. 21 ¶¶ 4, 65, 66, 68, 70, 79). Plaintiffs claim that the alleged misrepresentations and omissions in the fraudulent advertising campaign expanded the market for YAZ and falsely inflated the price for YAZ, which in turn caused the Plaintiffs, as third party payors, to pay (and/or reimburse) an excessive price for an excessive amount of YAZ prescriptions. (See Doc. 21 ¶¶ 120, 121).

Plaintiffs have asserted claims under the federal Racketeer Influenced and Corrupt Organizations ("RICO") statute and common law claims for negligence, fraud and misrepresentation, and unjust enrichment. Defendants seek to dismiss the complaint in its entirety for failure to state a claim. (Doc. 36).

II. BACKGROUND

A. Factual Background

YAZ "is a combined hormonal oral contraceptive consisting of estrogen and progestin." (Doc. 21 ¶ 36). The estrogen in YAZ is ethinyl estradiol and the progestin is drospirenone. (Doc. 21 ¶ 37). According to the Complaint, "drospirenone has certain side effects that are different from and more dangerous than the side effects associated with [other progestins]." (Doc. 21¶ 52; see also id. ¶ 63). Plaintiffs allege that these side effects include an increase in potassium levels which can result in hyperkalemia, a condition that could eventually lead to heart attack, pulmonary embolism, or stroke. (Doc. 21 ¶¶ 53-54). The Complaint also alleges that individuals who take YAZ have a "substantially increased risk of gallbladder complications." (Doc. 21 ¶ 56).

The Food and Drug Administration ("FDA") has approved YAZ for the following uses: (1) as an oral contraceptive (doc. 21 ¶ 39); (2) as a treatment for moderate acne vulgaris in women who choose to use an oral contraceptive (doc. 21 ¶ 41); and (3) as a treatment for premenstrual dysphoric disorder ("PMDD") in women who choose to use an oral contraceptive. (Doc. 21 ¶ 40).

"PMDD is a condition associated with severe emotional and physical problems that are closely linked to the menstrual cycle." (Doc. 21 ¶ 44). PMDD and Premenstrual syndrome ("PMS") share some common symptoms, such as depression, anxiety, tension, irritability, and moodiness. (Doc. 21 ¶ 46). The symptoms associated with PMDD, however, are more severe than those associated with PMS. (Doc. 21 ¶ 46). PMDD is estimated to affect 5% of menstruating women. (Doc. 21 ¶ 44). PMS, on the other hand, affects an estimated 75% of menstruating women. (Doc. 21 ¶ 45).

B. Plaintiffs' Claims

Plaintiffs contend that Bayer and its associates*fn1 engaged in (and conspired to implement and carry out) a fraudulent advertising campaign that allegedly misled a number of persons or groups of persons, including consumers; patients; physicians; third party payors; pharmacy benefit managers; the medical, pharmaceutical, and scientific communities; and "others involved in the selection, approval, distribution, and payment of the costs for prescription drugs." (See e.g., Doc. 21 ¶¶ 4, 78, 109). The fraudulent advertising campaign allegedly contained misrepresentations regarding the circumstances in which YAZ had been approved for use and YAZ's safety profile. (Doc. 21 ¶¶ 4, 78, 109). Specifically, Plaintiffs allege that YAZ was improperly promoted "as safe and effective for unapproved off-label uses lacking scientific support, including PMS, acne, anxiety, tension, irritability, moodiness, fatigue, headaches, and muscle aches." (Doc. 21 ¶ 68. See also Doc. 21 ¶¶ 68, 87, 97 (asserting that Bayer promoted YAZ as safe and effective for "unapproved off-label" or "off-label" uses); Doc 21 ¶¶ 79, 87, 98 (alleging that Bayer "overstated" YAZ's benefits); Doc 21 ¶ 70 (claiming that consumers selected YAZ over competing drugs and were willing to pay more for YAZ because of its purported "extra benefits")).

In addition, Plaintiffs contend the fraudulent advertising campaign concealed or omitted the following: (1) that the side effects associated with YAZ are different from and more dangerous than the side effects associated with oral contraceptives that do not contain drospiranone; (2) that YAZ users have a higher risk for adverse events and are at risk of experiencing dangerous life-threatening side effects; (3) and that patients ...


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