Pfizer To Pay $325M To Settle Neurontin 3rd-Party Payer, Antitrust Class Action

BOSTON — (Mealey’s) Pfizer Inc. has agreed to a $325 million class settlement of claims by third-party payers that allege that the off-label promotion of the epilepsy drug Neurontin violated the Racketeer Influenced and Corrupt Organizations Act and that the drug maker’s efforts to delay the marketing of generic Neurontin violated antitrust laws, according to a motion filed May 30 in the U.S. District Court for the District of Massachusetts (In Re:  Neurontin Marketing, Sales Practices, and Products Liability Litigation, MDL Docket No. 1629, No. 1:04-10981, D. Mass.). 

(Brief and settlement agreement available.  Document #28-140605-017B.

The class consists of all third-party payers who paid for Neurontin or its generic form, gabapentin.  

A subclass consists of all indirect purchasers of Neurontin who allege that Pfizer violated state antitrust laws by delaying the entry of gabapentin into the marketplace.  The subclass includes 16 health insurers and their subsidiaries and is called the Assurant Subclass after lead plaintiff Assurant Health Inc. 

The class excludes Kaiser Foundation Health Plan and subsidiaries, Blue Cross and Blue Shield of Alabama, the Municipal Workers Compensation Fund Inc. and the Union of Operating Engineers Local 68 Welfare Fund.  Those third-party payers have either won verdicts or negotiated settlements. 

Terms 

Awards will be determined by a settlement administrator.  The settlement provides for attorney fees not to exceed 33.33 percent of the total fund plus reasonable costs and expenses, to be paid from the settlement fund. 

Class representatives will be paid an additional $25,000 each.

 Class members may object to the settlement and may opt out.  If a percentage of class members opt out, Pfizer can terminate the settlement. 

The settlement must be the subject of a fairness hearing and be approved by Judge Patti B. Saris.  The motion anticipates a final approval hearing on or after Sept. 15. 

10-Year Litigation 

Third-party payer complaints involving Neurontin began to be filed in 2004.  Federal cases were centralized in a multidistrict litigation that year. 

In 2005, Assurant Health and other third-party payers sued Pfizer, alleging off-label promotion and state antitrust and consumer protection violations (the Assurant Plaintiffs) (Assurant Health, Inc., et al. v. Pfizer Inc., et al., No. 05-10535, D. Mass.). 

At the time the complaints were filed, Neurontin was approved only to treat adult epilepsy and post-herpetic neuralgia.  The plaintiffs allege that rather than get federal approval to market Neurontin for the treatment of other conditions, Warner-Lambert Co. LLC (later bought by Pfizer) turned to off-label marketing to generate more sales before Neurontin’s patent expired. 

Off-label uses included treatment of pain, bipolar disorder, migraines and doses of more than 1,800 milligrams. 

Class Denial Reversed 

After extensive litigation, the MDL court denied certification of a third-party payer class.  The plaintiffs appealed, and in 2013, the First Circuit U.S. Court of Appeals reversed. 

The plaintiffs renewed their motion for class certification.  According to the settlement approval motion, the parties then began negotiations under the direction of retired district court Judge Layn Phillips. 

Neurontin has been the subject of personal injury lawsuits and a False Claims Act settlement. 

Counsel 

The Plaintiffs’ Steering Committee is represented by Thomas M. Sobol of Hagen Berman Sobol Shapiro in Boston; Thomas Greene of Greene LLP in Boston; Elizabeth J. Cabraser of Lieff, Cabraser, Heimann & Bernstein in San Francisco; Don Barrett of the Barrett Law Office in Lexington, Miss.; Daniel Becnel Jr. of the Law Offices of Daniel Becnel Jr. in Reserve, La.; and James R. Dugan II of Dugan & Browne in New Orleans.  Richard W. Cohen of Lowey, Dannenberg, Cohen & Hart in White Plains, N.Y., is the Non-Class Plaintiffs’ Steering Committee representative. 

The Assurant subclass is represented by W. Scott Simmer of Blank Rome in Washington, D.C. 

Pfizer is represented in the settlement agreement by Malini Moorthy, vice president and assistant general counsel for Pfizer in New York.

[Edtor's Note: Lexis subscribers may download the document using the link above. The document(s) are also available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.]

For all of your legal news needs, please visit www.lexisnexis.com/mealeys.

Lexis.com subscribers may search all Mealey Publications.

Non-subscribers may search for Mealey Publications stories and documents at www.mealeysonline.com or visit www.Mealeys.com.

Mealey's is now available in eBook format!

For more information about LexisNexis products and solutions, connect with us through our corporate site