Actos RICO Class Action Lawsuit

A Minnesota union health and welfare benefit fund and consumers in four states have filed a federal racketeering class action lawsuit against Takeda Pharmaceutical Company—Japan’s largest drug company and the maker of the diabetes drug Actos—and pharmaceutical giant Eli Lilly & Company.

The Actos RICO class action lawsuit claims that Takeda and Eli Lilly concealed the risk that Actos [pioglitazone] posed in causing bladder cancer in order to ensure the continued profitability of Actos throughout the United States. Also named as a defendant in the Actos RICO class action lawsuit is Takeda’s U.S. subsidiary, Takeda Pharmaceuticals U.S.A., Inc., a Delaware company. Eli Lilly & Co., based in Indianapolis, Indiana, was also named in the Actos RICO class action lawsuit. By court order, the case was assigned the same case number as the Actos multidistrict litigation: MDL No. 11-md-2299.

The Plaintiffs

Plaintiffs named in the Actos bladder cancer lawsuit are the Minnesota-based Painters and Allied Trades District Council 82 Health Care 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. The plaintiffs are represented by Baum, Hedlund, Aristei & Goldman, PC, of Los Angeles, CA, Pendley, Baudin & Coffin, L.L.P., of New Orleans, LA, and Larson King, L.L.P., of St. Paul, MN.

The Allegations

The plaintiffs claim that the defendants engaged in a decade-long scheme to conceal the significant bladder cancer risks associated with Actos. As a result of the alleged deception, consumers, prescribers, and third-party payers were denied the knowledge necessary to make informed decisions regarding the purchase and/or reimbursement of Actos prescriptions.

The Actos RICO class action lawsuit allegations against Takeda and Eli Lilly include the following:

  • Concealing from the FDA that Takeda’s original partner in developing Actos, pharmaceutical company Upjohn, pulled out of the deal due to safety and toxicology issues raised in animal trials.
  • Paying “experts” to deceive the FDA regarding bladder cancer risks that had been raised in animal studies.
  • Conspiring with other experts to conceal Actos’ mechanism of action to avoid an association with similar drugs that had been linked to bladder cancer and obtain FDA approval to conduct pediatric trials—potentially worth over $2 billion in additional sales.
  • Misreporting the results of a clinical trial called the PROactive study to avoid revealing a statistically significant 2.83 times greater risk of bladder cancer in patients who took Actos.
  • Instructing sales representatives to avoid talking about Actos bladder cancer risks.
  • Destroying important documents of high level Takeda executives after being legally required to preserve them. Last year, a federal judge ruled that Takeda intentionally destroyed evidence relevant to the Actos multidistrict litigation (MDL).

About Actos

Manufactured and distributed by Takeda Pharmaceuticals, Actos [pioglitazone] is a prescription drug used to treat type-2 diabetes. Introduced to the North American market in 1999, Takeda made billions of dollars every year in Actos sales. In 2010 alone, Actos brought in roughly $5 billion in sales.

But even before Actos went to market, safety advocates were concerned about the drug’s link to bladder cancer. Studies had shown that Actos was not only linked to bladder cancer, but other serious side effects as well, including heart failure, blindness and bone fractures. In spite of these alarming studies, patients were not made aware of the dangers surrounding Actos—consumers were simply told that the type-2 diabetes drug was their best option to combat the dangers of diabetes.

During the Actos MDL proceedings in Louisiana, it was reported that Takeda had allegedly been aware of the link between Actos and bladder cancer since 2001, but did nothing to warn the general public about the danger. The FDA issued a safety alert in June of 2011, warning that long term Actos consumers were at an increased risk for developing bladder cancer. The FDA further advised doctors to stop filling Actos prescriptions for patients who had previously been diagnosed with bladder cancer.

The Actos bladder cancer MDL was filed before U.S. District Court Judge Rebecca Doherty in the Western District of Louisiana, where last year the jury in a federal bellwether Actos bladder cancer trial ordered Takeda and Eli Lilly to pay $1.5 million to the defendant and $9 billion (later reduced to $38.6 million) in punitive damages. Takeda recently agreed to settle thousands of Actos lawsuits for $2.37 billion. Plaintiffs in the suits claim that Actos gave them bladder cancer.

Why an Actos RICO Class Action Lawsuit against Takeda and Eli Lilly?

Rather than filing individual health care fraud lawsuits against Takeda and Eli Lilly, the plaintiffs filed a lawsuit under the Racketeer Influenced and Corrupt Organizations (RICO) Act, a federal law designed to combat organized crime.

The plaintiffs proposed an Actos RICO class action lawsuit consisting of all consumers and entities in the United States and its territories who took Actos between 1999 and the present. In addition, the plaintiffs propose five state Consumer Classes in California, Missouri, New Jersey, Florida, and Massachusetts, for consumers who paid or incurred costs of Actos in those states over the same time period.

According to the Actos RICO class action lawsuit, Takeda and Eli Lilly allegedly engaged in “a pattern of racketeering activity” that included acts of mail fraud, wire fraud, and the “use of interstate facilities to conduct unlawful activity.” Racketeering is broadly defined as a “pattern of illegal activity carried out as part of an enterprise that is owned or controlled by those engaged in the illegal activity.”

RICO violations are not just limited to organized crime syndicates—they can also focus on a corporation. Those who have been injured by a RICO violation can bring a civil suit. If they win, the parties injured as a result of a RICO violation receive treble damages (triple the amount of actual/compensatory damages). In order for a RICO claim to be successful, plaintiff(s) must demonstrate:

  • Criminal Activity. Plaintiff(s) must prove that defendant(s) have committed any of the enumerated RICO crimes, which include broad crimes like mail and wire fraud.
  • Pattern of Criminal Activity. A single crime is not enough—plaintiff(s) have to prove a pattern of at least two crimes, and the pattern is required to be either related in some way (i.e. same victim, same methods, same participant(s) or continuous, (i.e. the crime was committed for over at least a year).