Federal judge certifies class action lawsuit against Eli Lilly

A class action lawsuit against Eli Lilly & Company, based in Indianapolis, and Takeda Pharmaceuticals, a Japanese company, has recently been certified by a federal judge in California. The lawsuit alleges that these pharmaceutical companies committed fraud and violated anticorruption legislation by concealing the risk of bladder cancer associated with a diabetes drug.
In the latest court order, a national third-party payor class was certified, encompassing groups that provide services to unrelated individuals, such as health insurance companies. However, the request for a California consumer class, including all consumers and groups in California who paid for Actos (pioglitazone) between 1999 and the present, was denied.
The lawsuit, which has been ongoing for several years, accuses Takeda and Lilly of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), a law targeting organized crime. If the RICO violation is proven, it may result in triple damages being awarded.
According to the plaintiffs, Lilly and Takeda were aware of the bladder cancer risks associated with Actos but intentionally misrepresented the drug’s safety to protect their profits. When the FDA issued an alert regarding Actos’ increased bladder cancer risk in 2011, sales plummeted by 80%, as stated in a news release from the law firm Wisner Baum, representing the plaintiffs.
As a result of the decline in sales, health insurance and medical service providers, known as third-party payers, incurred substantial expenses. The plaintiffs consist of a Minnesota-based union healthcare fund and four named consumers from different parts of the country. In broader terms, the plaintiffs are now the third-party payers who purchased Actos prescriptions between July 1, 1999, and September 17, 2010.
This class action lawsuit is the latest development in a case that has been ongoing since 2014. The RICO violation claim was initially part of a multidistrict litigation involving allegations of injuries or harm caused by Actos, which was heard in the Western District Court of Louisiana. In a landmark personal injury case, the jury initially ordered the two companies to pay a combined $9 billion in punitive damages. However, this amount was later reduced to $36.8 million, with Lilly being held liable for just over $9 million. Takeda eventually agreed to pay over $2.4 billion in damages to settle the remaining cases involving personal harm.
In 2017, the Louisiana court referred this RICO violation case, which alleges fraud and conspiracy, to the Central District Court of California, separating it from the multidistrict litigation.
IndyStar archives reveal that Lilly collaborated with Takeda to co-promote Actos in the United States from 1999 to 2006, although the company no longer actively markets the drug.
A news release from Wisner Baum stated that the class action lawsuit will proceed as quickly as possible, with hopes of a trial taking place next year.
Lilly expressed partial satisfaction with the court’s ruling in a statement, particularly regarding the denial of the California consumer class. The company stated that prescribing Actos required specific and individual evidence. However, Lilly disagreed with the court’s decision to certify the case as a class action on behalf of the third-party payers.
“We believe the court made an error in certifying the national third-party payor class, and we intend to appeal this ruling,” stated Lilly. The company emphasized that the court’s ruling is preliminary and does not determine liability on the merits of the case. Lilly remains confident that the plaintiff’s claims lack merit and asserts its commitment to vigorously defending against the lawsuit.