Thursday, December 17, 2009

Further Discussion on the Second District’s Decision in In Re Vioxx Class Cases

In the two previous posts I have focused on the Court's analysis regarding predominance (here and here). However, another material component of In Re Vioxx Class Cases, __ Cal. App. 4th __ (2009) was the Court’s finding with regard to the issue of typicality.

On this issue, the trial court “concluded that the named plaintiffs, who were all individuals, did not possess claims typical of prescription drug benefit providers who had paid all or part of the purchase price of Vioxx for their subscribers.” See Slip Opinion, at 2-3. The trial court reasoned that typicality was lacking “on the basis that ‘[Merck] present[ed] persuasive evidence that the decisionmaking that goes into purchasing Vioxx on an individual basis is entirely distinct from the process for putting it into a group formulary.’” See id. at 20.

The plaintiffs claimed the trial court erred by treating third party payors (“TPPs”) as distinct from consumers. See id., at 20. Plaintiffs’ reasoned that the claims of the entire class of TPPs were subsidiary to consumers, and as such, “if an individual patient, acting in reliance on Merck’s misrepresentations, paid too much for Vioxx, the TPP which paid a portion of that purchase price should also be entitled to recover.” See id. The Court disagreed.

As reasoned by the Court, the plaintiffs’ analysis was flawed in that “it treats the TPP as a passive entity which simply pays its share of the cost of any prescription written for any of its members, with no independent say in the matter.” See id., at 20. The Court reasoned that the record reflected that while many TPPs passively pre-approved Vioxx for use in all patients, others established their own guidelines as to when Vioxx was indicated, conducted their own reviews of all published literature, and some even conducted their own research studies. See id., at 20-21. Based on such differences, the Court concluded that TPPs stood on a complete different footing with regard to the materiality of the challenged representations regarding Vioxx:
with respect to the UCL claim, in considering whether the representation was likely to mislead, we consider the audience to whom the misrepresentation was directed. Whether an individual patient or physician was likely to be misled by Merck’s representations is a completely different inquiry from whether a sophisticated P&T committee, with substantial resources and the ability to conduct its own research, was likely to be misled. As such, the trial court did not err in concluding the individual plaintiffs’ claims were not typical of the claims of the TPPs.
Slip Opinion, at 21.

The Court also noted that the class was overly broad, in that it “fail[ed] to exclude individuals who suffered personal injury from taking Vioxx.” See Slip Opinion, at 20 n.16 (citing Akkerman v. Mecta Corp., Inc., 152 Cal.App.4th 1094, 1103-1104 (2007)). Similarly, the Court also concluded that the class “fail[ed] to exclude those with a ‘flat copayment’ pharmaceutical benefit[,]” as such individuals “would pay the same copayment for a generic drug (i.e., naproxen) as they would for a name brand drug (i.e., Vioxx) would have no economic loss under plaintiffs’ theory of the case….” See id. (citing In re Cipro Cases I & II, 121 Cal.App.4th 402, 418 (2004).

While each of these defects may have been resolved by redefining the class [Hicks v. Kaufman & Broad Home Corp., 89 Cal. App. 4th 908, 916 (2001) (“if necessary to preserve the case as a class action, the court itself can and should redefine the class where the evidence before it shows such a redefined class would be ascertainable”)], such action likely would have futile in light of the Court’s findings on the issue predominance.

No comments:

Post a Comment