RICO Claims

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7^th Circuit Court of Appeals

Case Name: Sidney Hillman Health Center of Rochester, et al. v. Abbott Laboratories, et al.

Case No.: 17-1483

Officials: EASTERBROOK, KANNE, and WILLIAMS, Circuit Judges.

Focus: RICO Claims

Plaintiffs contend that Payors bear the principal costs of off-label promotions, because they pay for most of the cost of the drugs, but comparing the patients’ health costs (and out- of-pocket co-pays) with the Payors’ costs may be difficult.

Second, whether or not any given off-label prescription for Depakote helped the patient (compared with another drug), some physicians were apt to write such prescriptions whether or not Abbott promoted off-label uses. We know that the number of off-label prescriptions grew once Abbott began its campaign, but off-label prescriptions did not start from zero. To calculate damages, it would be necessary to determine the volume of off-label prescriptions that would have occurred in the absence of Abbott’s unlawful activity.

We hold that improper representations made to physicians do not support a RICO claim by Payors, several levels removed in the causal sequence. Public prosecution avoids these problems, so Abbott’s criminal conviction and $1.6 billion payment were the proper remedies.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.