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Sidney Hillman Health Center v. Abbott Laboratories & AbbVie, Inc.

United States District Court, N.D. Illinois, Eastern Division

August 14, 2014

SIDNEY HILLMAN HEALTH CENTER, OF ROCHESTER, TEAMSTERS HEALTH SERVICES AND INSURANCE PLAN LOCAL 404, and UNITED FOOD AND COMMERCIAL WORKERS UNIONS AND EMPLOYERS MIDWEST HEALTH BENEFIT FUND, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
ABBOTT LABORATORIES and ABBVIE INC., Defendants

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For Sidney Hillman Health Center of Rochester, Plaintiff: Catherine Jeanne OSuilleabhain, Edmund S Aronowitz, Adam J. Levitt, Grant & Eisenhofer P.A., Chicago, Il; Mary S Thomas, PRO HAC VICE, Grant & Eisenhofer P.a., Wilimington, DE.

For Teamsters Health Services and Insurance Plan Local 404, Plaintiff: Adam J. Levitt, LEAD ATTORNEY, Catherine Jeanne OSuilleabhain, Edmund S Aronowitz, Grant & Eisenhofer P.A., Chicago, Il; Frank R. Schirripa, PRO HAC VICE, Hach Rose Schirripa & Cheverie LLP, New York, NY; Mary S Thomas, PRO HAC VICE, Grant & Eisenhofer P.a., Wilimington, DE.

For United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund, on behalf of themselves and all others similarly situated, Plaintiff: Jonathan D. Karmel, LEAD ATTORNEY, The Karmel Law Firm, Chicago, IL; Catherine Jeanne OSuilleabhain, Edmund S Aronowitz, Adam J. Levitt, Grant & Eisenhofer P.A., Chicago, Il; Mary S Thomas, PRO HAC VICE, Grant & Eisenhofer P.a., Wilimington, DE.

For Abbott Laboratories, AbbVie, Inc., Defendants: William F Cavanaugh , Jr., LEAD ATTORNEY, Adeel Abdullah Mangi, Jonah Moses Knobler, Scott C Caplan, PRO HAC VICE, Patterson Belknap Webb & Tyler LLP, New York, NY; Jonathan Richard Lahn, Kirkland & Ellis LLP, Chicago, IL.

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AMENDED OPINION AND ORDER[1]

SARA L. ELLIS, United States District Judge.

Sidney Hillman Health Center of Rochester, Teamsters Health Services and Insurance Plan Local 404, and United Food and Commercial Workers Unions and Employers Midwest Health Benefit Fund (collectively, " the Funds" ) are multi-employer benefit plans and health services funds that provide health benefits, including prescription drug coverage, to their members. The Funds seek to represent a nationwide class of such third-party purchasers or third-party payors (" TPPs" ) who from 1998 to 2012 reimbursed and paid all or some of the purchase price for Depakote, a drug developed and marketed initially by Abbott Laboratories (" Abbott" ) and later by AbbVie, Inc. (" AbbVie" ) (collectively, " Abbott" ), for indications not approved by the Food and Drug Administration (" FDA" ).[2] Plaintiffs also seek to represent three subclasses of TPPs in Illinois, New York, and Massachusetts. The Funds bring claims for violations of the Racketeer Influenced and Corrupt Organizations Act (" RICO" ), conspiracy to violate RICO, violation of the Illinois and New York deceptive business practices acts, and unjust enrichment. Abbott has moved to dismiss the Complaint. Because the Court finds the Funds' claims are barred by the statute of limitations, Abbott's motion [26] is granted.

BACKGROUND[3]

Depakote (divalproex sodium) was developed by Abbott and approved by the FDA

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for the treatment of epileptic seizures, acute mania or mixed episodes associated with bi-polar disorder, certain absence seizures, adult migraine prevention and prophylaxis, and pediatric patients over ten years old for certain absence seizures. Depakote has never been approved for treatment of dementia, including agitation associated with dementia, schizophrenia, ADHD, narcotic drug withdrawal, or any other uses.

Between 2007 and 2012, four sealed qui tam actions were filed against Abbott pursuant to the False Claims Act, 31 U.S.C. § 3730(b), asserting illegal marketing of Depakote for non-FDA approved uses. In November 2009, Abbott disclosed in a public Securities and Exchange Commission filing that the United States Department of Justice was investigating its sales and marketing of Depakote. This was widely reported in the press at that time.[4] On February 1, 2011, the qui tam actions were unsealed as the United States and fifteen state governments intervened. Another state followed two months later. After the consolidation of those actions, on May 7, 2012, Abbott agreed to pay $1.6 billion to resolve the criminal and civil claims against it. As part of that settlement, Abbott admitted to knowingly promoting the sale and use of Depakote for uses that the FDA had not approved as safe and effective, including behavioral disturbances in dementia patients, ADHD, schizophrenia, and other psychiatric conditions. Abbott also admitted this unapproved use promotion included making false and misleading statements about the safety, efficacy, dosing, and cost-effectiveness of Depakote for some of those uses, and specifically marketing Depakote to nursing homes to control behavioral disturbances in dementia patients (as an alternative to antipsychotic medications that carried additional federal regulatory restrictions). Abbott also admitted to paying illegal remuneration to health care professionals and long-term pharmacy providers to induce them to promote or prescribe Depakote.

The Funds filed the current suit on August 16, 2013 alleging Abbott perpetrated a scheme designed to cause the Funds and other TPPs to pay for Depakote prescriptions to treat non-FDA approved conditions and conditions for which there is no reliable scientific evidence that Depakote is effective. The Funds claim their member-patients received no additional benefit from the drug (versus a placebo) and member-patients were sometimes subjected to additional side effects, despite alternative medicines that were cheaper, more effective, or had fewer side effects.

According to the Funds, Abbott perpetrated this scheme in direct violation of FDA regulations concerning the marketing and promotion of prescription drugs. The FDA requires pharmaceutical companies to present fair and balanced information about their products, meaning full disclosure of negative as well as positive information. Promotion of drugs for " off-label," or unapproved uses, is also closely monitored by the FDA. In limited circumstances and ...


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