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Supreme Court Rejects Takeda and Eli Lilly Appeal in Actos RICO Case

June 8, 2020, Washington D.C. — The United States Supreme Court has declined Takeda Pharmaceuticals and Eli Lilly Co.’s appeal of a lawsuit accusing both companies of defrauding patients and health benefit funds by failing to disclose that the diabetes drug Actos increases the risk of developing bladder cancer.

Actos (pioglitazone) was developed by Takeda and co-marketed in the U.S. with Eli Lilly. The medication is used to lower glucose levels for people with type 2 diabetes.

In 2014, Painters and Allied Trades District Council 82 Health Care Fund and a group of plaintiffs from across the U.S. filed a Racketeer Influenced and Corrupt Organizations Act (RICO) class action lawsuit against Takeda and Eli Lilly alleging the drug makers had known for years about the Actos bladder cancer risk but refused to warn the public until the U.S. Food and Drug Administration (FDA) issued an official warning in 2011 about the dangers.

The RICO class action alleges both manufacturers entered into a decades-long scheme to mislead patients, the medical community, and the public about the link between the drug and bladder cancer. The suit seeks trebled damages to compensate patients and insurers for the money they spent on Actos.

Justices Reject Drug Makers’ Bid to Toss Actos Bladder Cancer Case

In their appeal to the Supreme Court, Takeda and Eli Lilly indicated that this case represented an “ideal opportunity” for the justices to address a split among circuit courts that was deepened by a Ninth Circuit Court of Appeals ruling in favor of the plaintiffs last December.

In its ruling, the Ninth Circuit held that proximate causation—an element created by the Court to make the RICO statute more equitable—should not be perverted to shield drug companies who engage in fraudulent conduct from being held accountable for their wrongdoing. R. Brent Wisner from Baum Hedlund Aristei & Goldman successfully argued the case for the plaintiffs before the Ninth Circuit.

Prior to the Ninth Circuit’s ruling, the Seventh Circuit had found that the alleged harm of the plaintiffs (paying for the drug) was too remote from a RICO violation because there are intervening stages between the drug makers and the plaintiffs, including health benefit fund managers and physicians.

In the end, the Supreme Court justices were unmoved by Takeda and Eli Lilly’s appeal and will let the Ninth Circuit decision stand. The justices did not offer an explanation for their decision, as is customary when a case is not taken up.

“We are pleased with the High Court’s decision,” says attorney R. Brent Wisner. “The issue on appeal was common sense. These drug companies deliberately concealed Actos’s bladder cancer risk for over a decade and they did so for the express purpose of selling more of the drug. The notion that there is no proximate causation between that intentional conduct and the payment for the drug never made much sense. This decision should send a clear message to all defendants that RICO is a viable cause of action to remedy pharmaceutical marketing fraud – they will not be able to hide behind doctors anymore. We look forward to pressing this case in the district court.”

The case is:

Painters and Allied Trades District Council 82 Health Care Fund, third-party healthcare payor fund; Annie M. Snyder, a California consumer; Rickey D. Rose, a Missouri consumer; John Cardarelli, a New Jersey consumer; Marlyon K. Buckner, a Florida consumer; and Sylvie Bigord, a Massachusetts consumer on behalf of themselves and all others similarly situated, Plaintiffs-Appellants

v.

Takeda Pharmaceuticals Company Limited, a Japanese Corporation; Takeda Pharmaceuticals U.S.A., FKA Takeda Pharmaceuticals North America, Inc., an Illinois corporation; and Eli Lilly and Company, an Indiana corporation, Defendants-Appellees

About Baum Hedlund Aristei & Goldman

The national law firm of Baum Hedlund Aristei & Goldman represents the plaintiffs in the case. Our award-winning pharmaceutical attorneys have extensive experience holding big corporations accountable for concealing the health risks of drugs and other consumer products.

Since 1973, Baum Hedlund Aristei & Goldman has won more than $4 billion in verdicts and settlements on behalf of clients across all areas of practice. In 2019, the firm co-tried a cancer case against Monsanto (now Bayer) on behalf of a California couple who alleged exposure to Roundup weed killer caused them to develop non-Hodgkin lymphoma. The jury trial culminated in a $2.055 billion verdict, the ninth-largest personal injury jury verdict in U.S. history.

Baum Hedlund is now one of the leading law firms spearheading the legal battle against the makers of Zantac (ranitidine) for allegedly concealing the link between the drug and a cancer-causing chemical.

On April 1, 2020, the FDA requested that manufacturers immediately withdraw Zantac and generic ranitidine from the market after determining that N-Nitrosodimethylamine (NDMA) in some ranitidine medications “increases over time and when stored at higher than room temperatures and may result in consumer exposure to unacceptable levels…” The FDA, the World Health Organization (WHO), and the Environmental Protection Agency (EPA) all classify NDMA as a carcinogen.

An earlier story about the case: Ninth Circuit Revives Actos RICO Class Action Against Takeda and Eli Lilly

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