Why Judge Weinstein's Zyprexa Ruling May Spell [More] Trouble for Schering-Plough. . . .

Ed Silverman -- under the guise of Pharmalot -- is, as ever, on the case, here:

. . . .Interestingly, Weinstein writes that there is “sufficient evidence of fraud under RICO, the Racketeer Influenced and Corrupt Organizations Act through mail fraud, predicated on overpricing supported by excessive claims of utility as well as disavowal of secondary effects of the drug, primarily weight gain and diabetes”. . . .

Note that Judge Weinstein has held that the insurers and the government payers are allowed to act as a single class in pressing civil-racketeering claims [massive 10.4 Mb .zip file of opinion courtesy of Drug and Device Law Blog] against Lilly.

Lilly allegedly went overboard in exaggerating the utility of Zyprexa -- advertising it far and wide, as a treatment for conditions where no evidence of efficacy existed.

That ought to sound, unfortunately, very familiar to followers of the most-recent Vytorin RICO putative class actions -- here, here and here.

I wonder whether Kenilworth is paying attention to the New York advance sheets.

I am reading the almost 400 page order and memorandum opinion, now -- over my morning coffee -- I'll have more reaction/analysis later today, or tomorrow.

Here, now, is some of it:



One of the key issues in deciding whether to certify a class-action of this sort is the judge's duty to determine whether any real economic damages may be established with enough certainty to allow a jury to rule in favor of the plaintiffs -- even assuming that all the plaintiffs claim, may be proven at trial.

Said another way, some courts have held that the proof of actual losses from "overcharging" for a drug, based on allegedly falsely-positive advertising claims (of efficacy, for example) -- is just too-speculative to withstand the inevitable defendant-pharmaceutical company's motion to dismiss the litigation.

Judge Weinstein offers this plaintiffs' expert-chart (above, among others) -- and the below-legal analysis (distinguishing away the tobacco cases, among others) -- to determine that damages will be sufficiently provable in the Lilly-Zyprexa matter [Click each image, to enlarge], to withstand such a motion to dismiss:



Now, note that the plaintiffs in the Vytorin-RICO putative class actions will be able to show some version of this IMS Scrip data (below) -- to establish that Vytorin/Zetia demand declined from January 2008 (when the top-line results of ENHANCE were belatedly disclosed), to February 2008. Then, arguably due to renewed marketing efforts by Schering-Plough, sales actually rose slightly, from February to March 2008:



Then, just as March ended (the full ACC Chicago-meeting disclosures came -- that Vytorin had wholly-failed to meet the endpoint in ENHANCE) sales declined sharply, again, after those full ENHANCE results were vetted by independent experts at, and after, ACC [again, click to enlarge each of these two graphics, above and below]:



Finally -- once the August and September, 2008 Vytorin/Zetia IMS data is published, I strongly suspect a third decline will become apparent -- one occasioned by the full-release of the SEAS trial data. All of this despite increasingly fervent efforts (think of Dr. Peto's hurried analysis of SEAS, here) by Schering to allegedly "ameliorate" the effects of the disclosure of these data-sets (SEAS; and earlier, ENHANCE). Thus, the Vytorin/Zetia fact-pattern begins to strongly resemble (and perhaps, even exceed) -- in terms of demonstrable proof of real economic losses -- the Lilly-Zyprexa fact pattern.

I trust Schering's lawyers are paying attention, here, now.