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Historic Actos RICO Class Action Against Big Pharma Could be Worth Billions

Judge certifies actos RICO class action

What You Should Know:

  • Painters and Allied Trades District Council 82 Health Care Fund v. Takeda Pharmaceuticals Co. is the first non-settlement national RICO class action lawsuit certified against Big Pharma.
  • Takeda Pharmaceutical Company and Eli Lilly and Company allegedly conspired to hide the risk of bladder cancer associated with Actos (pioglitazone) because they knew that many prescribers and patients would not use the medication if they knew the truth. When the U.S. Food and Drug Administration (FDA) issued an alert on the bladder cancer risk, Actos sales fell by 80%; the costs of those excess sales were born by third-party payers.
  • Experts say the damages under RICO could reach $7 billion or more.
  • This case already created Ninth Circuit precedent in 2019, when it held that civil RICO claims could be brought against pharmaceutical companies. This is another watershed decision. The pharmaceutical industry is now on notice that, under certain circumstances, they can now be exposed to civil RICO liability on a class-wide basis.

Class action attorneys from the national law firm of Wisner Baum have obtained class certification in a groundbreaking civil Racketeer Influenced and Corrupt Organizations Act (RICO) case against Takeda Pharmaceutical Company and Eli Lilly and Company. The class action lawsuit alleges Takeda and Lilly conspired to hide the risk of bladder cancer associated with Actos, a diabetes medication, because the companies knew that adding a cancer warning label would cause significant harm to sales.

In his order unsealed on June 5, 2023, U.S. District Judge John W. Holcomb for the Central District of California stated that “[t]he Court is persuaded that the National TPP Class can be certified. Plaintiffs easily satisfy the four requirements of Rule 23(a). Plaintiffs also satisfy the superiority prong of Rule 23(b)(3).” Judge Holcomb also held that “Plaintiffs have shown, by the preponderance of the evidence, that common questions of fact predominate over the element of but-for causation.”

Class Representative Painters and Allied Trades District Council 82 Health Care Fund (Painters) seeks damages under RICO for money spent on Actos, alleging it would have paid for far less Actos if the drug companies had warned of the bladder cancer risk. Painters is a Minnesota union health fund that functions as a third-party payer of health and welfare benefits for covered members and their families. The health fund reimburses members for drugs like Actos submitted by pharmacies and healthcare providers covered under the plan. Link to order re Plaintiffs’ expert economist.

According to legal experts, the case of Painters and Allied Trades District Council 82 Health Care Fund v. Takeda Pharmaceuticals Co. is the first time a non-settlement class against a pharmaceutical company has been certified under the civil RICO statute, where plaintiffs may be awarded “treble damages” (damages amount multiplied by three), caused by the defendants. With treble damages, this case could reach $7 billion or more.

“We appreciate the Court’s hard work in drafting such a detailed and careful order,” said R. Brent Wisner, attorney for the class. “It’s a thoughtful order—one we have come to expect from Judge Holcomb. While this is the first pharmaceutical class to ever be certified under the federal civil RICO statute, the result should come as no surprise. It is rooted in well-established Ninth Circuit precedent and, frankly, commonsense. We will now be able to get this case to trial on behalf of a national class. It is about time we held Takeda and Lilly accountable for exposing millions of Americans to a carcinogen without their consent. Fraud should not pay—the use of civil RICO will help ensure that doesn’t happen here. And, with a national class, the full scope of their corporate malfeasance will be tried together in one case.”

Background on Actos RICO Class Action

The following are allegations only; there has been no determination of liability in this case.

Takeda Pharmaceutical Company and Eli Lilly and Company conspired to commit fraud by intentionally hiding known safety risks associated with the diabetes drug Actos (pioglitazone). Just days after the U.S. Food and Drug Administration (FDA) approved Actos in 1999, an Eli Lilly PowerPoint presentation addressed “Pioglitazone’s Product Liability Risk,” and identified “bladder cancer” as one of the “Most Significant Adverse Events Risks for Pioglitazone[.]”

Over the next several years, scientific studies further confirmed the risk of bladder cancer associated with Actos. According to the class action complaint, despite their awareness of the bladder cancer risk, Takeda and Eli Lilly refused to change the Actos label or otherwise inform doctors and patients about the known safety risk. Takeda and Eli Lilly actually studied the implications that a bladder cancer warning on the Actos label would have on drug sales. They concluded that any “proposed changes which imply a clinical connection would have an impact to sales.”

In 2010, the FDA announced that it would conduct a safety review of Actos citing studies linking Actos to an increased risk of bladder cancer. In 2011, the FDA issued an official warning that Actos may be linked to bladder cancer in patients who use it for prolonged periods. In response to the FDA warning, Takeda and Eli Lilly changed the Actos label to warn of the bladder cancer risk. As the companies predicted, Actos sales fell dramatically by 80% after the FDA issued the bladder cancer warning.

The FDA warning had another effect: Thousands of people filed personal injury and wrongful death lawsuits against Takeda and Eli Lilly alleging Actos caused them or a family member to develop bladder cancer. The cases were consolidated in In re Actos (Pioglitazone) Prod. Liab. Litig., No. 6:11MD-2299, a multidistrict litigation (MDL) in the Western District of Louisiana.

In 2014, an Actos bladder cancer trial culminated with a $9 billion punitive damage jury verdict against Takeda and Eli Lilly (later reduced to $36.8 million), which paved the way for a global settlement worth over $2.4 billion. The MDL Court that presided over the Actos bladder cancer litigation for six years described Takeda and Eli Lilly’s conduct:

“[F]rom the beginning of their commercial alliance, Takeda and Lilly were aware of the possibility that Actos posed an increased risk of bladder cancer” and intentionally “deprived physicians of the information necessary to perform their function in our medical care system” and “effectively wrote off an identifiable and significant, and perhaps, the most vulnerable segment of the population of diabetics” through “a concerted, long-term effort to conceal and obfuscate information about the true risk of bladder cancer . . . all in the blind pursuit of profit.”

Wisner Baum attorneys successfully represented more than 100 claimants in the Actos bladder cancer litigation. Senior Partner Michael L. Baum was on the litigation leadership, serving on the Plaintiffs’ Steering Committee for the Judicial Council Coordinated Proceedings (JCCP 4696) In re Actos Product Liability Cases, Los Angeles, California.[JH1] He also assisted in the federal discovery and trial. Much like other mass torts the firm has taken on, our work in the Actos bladder cancer litigation extended beyond the courtroom. We were instrumental in publishing discovery documents from the litigation, which are available at the University of San Francisco’s Drug Industry Documents Archive (DIDA).

Our commitment to pursuing justice and holding the drug companies accountable did not stop with the MDL[JH2] [RM3]. In 2014, we filed Painters and Allied Trades District Council 82 Health Care Fund v. Takeda Pharmaceuticals Co. The consumer class plaintiffs, in particular, allege that neither they nor their doctors knew about the Actos bladder cancer link when they began taking the medication, and that they immediately stopped taking Actos once they learned of the dangerous health risks. They further allege that they never would have purchased Actos if the drug companies had warned that it increased the risk of developing bladder cancer.

According to the motion for class certification:

“Defendants knew, from the outset, that a majority of diabetics and prescribers would refuse to use Actos if they knew that it could increase the risk of bladder cancer. They knew this because they studied it. And, when their fraud was finally exposed by the FDA, Actos sales plummeted, just as predicted. And yet, notwithstanding the eye-popping verdict (which was reduced to $36.875 million), the scathing admonishments by the MDL court, or the hard-fought personal injury settlements, the simple fact remains that these Defendants netted $24,196,922,000 between 1999 and 2012 by exposing ‘more than 10 million’ Americans to a carcinogen without their consent. Many of those sales would never have occurred had the truth been told. The previous settlements are a drop in the ocean that is Takeda and Lilly’s profit, earned, in part, by egregious fraud. Hence this lawsuit, which seeks some justice in the face of this staggering misconduct.”

Wisner Baum Class Action Attorneys

The Hon. John W. Holcomb appointed R. Brent Wisner and Michael L. Baum of Wisner Baum, LLP and Christopher L. Coffin of Pendley, Baudin & Coffin, LLP as national class counsel.

They represent the National Third-Party Payer in this class action against Takeda Pharmaceutical Company and Eli Lilly and Company. The firm’s Managing Partner and senior trial lawyer, R. Brent Wisner, leads the litigation. Wisner Baum attorney Harrison James is also working on this case.

Attorney Wisner earned numerous awards and recognition after serving as co-lead counsel in two of the first three Monsanto Roundup cancer trials in 2018 and 2019, which culminated in more than $2.3 billion in jury verdicts. After his trial success, Wisner was one of several lawyers from different leading law firms that helped negotiate mass tort settlements in excess of $10 billion.

Since 1985, Wisner Baum has won more than $4 billion across all practice areas, including class action litigation, mass torts, commercial transportation cases, pharmaceutical product liability, and more.


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