Wisner Baum Unleashes RICO to Expose Big Pharma's Hidden Fraud

LOS ANGELES, Nov. 25, 2025 /PRNewswire/ -- In a legal first poised to reshape pharmaceutical accountability, Wisner Baum LLP has successfully advanced a civil RICO (Racketeer Influenced and Corrupt Organizations Act) class action lawsuit against Takeda Pharmaceuticals and Eli Lilly. The case alleges the two pharma giants concealed bladder cancer risks linked to their blockbuster diabetes drug, Actos. When the district court certified a national third-party-payer civil RICO class in this case in 2023, it marked the first time a civil RICO class had ever been certified against pharmaceutical manufacturers. Now, with the Ninth Circuit's recent decision affirming class certification, Wisner Baum has delivered the first class of this nature to withstand appellate review. ⁽¹⁾

Originally filed in 2014, the suit accuses the companies of orchestrating a decade-long scheme to mislead doctors, patients, and third-party payers about Actos's safety profile. Damages could exceed $1 billion and, under RICO, are subject to trebling—tripling potential recovery as a punitive measure to deter egregious misconduct.

"RICO was designed to dismantle organized criminal enterprises," said Harrison E. James, attorney at Wisner Baum. "What we've seen in pharma—systemic concealment of risk and manipulation of regulators—fits that model perfectly. The industry's conduct here isn't just negligent; it's coordinated deception. Applying RICO makes this litigation a landmark in corporate fraud accountability."

A Changing Tide in Pharma Accountability

For decades, critics have accused pharmaceutical giants of prioritizing profits over patients. Civil RICO, traditionally reserved for organized crime, has rarely been used to challenge corporate wrongdoing at this scale, but that's changing.

Actos, once a best-selling diabetes medication, generated billions in sales before the FDA added a bladder cancer warning in 2011. The label change led to an 80% drop in sales. ⁽²⁾ Internal documents reportedly show that Takeda and Lilly were aware of the cancer risk as early as 1999, yet delayed warnings while surveying how a cancer label might affect prescribing behavior. ⁽³⁾

"Hundreds of thousands of people were exposed to a carcinogenic drug that never should have remained on the market without a clear warning," said James. "Once the truth came out, doctors and patients walked away. That tells you everything about what was hidden."

The case also represents a breakthrough for third-party payers—health plans and insurers who collectively spent billions on Actos prescriptions—as the economic victims of the alleged fraud. Moreover, it has survived every challenge before the district court and the Ninth Circuit, signaling the judiciary's readiness to extend RICO's reach into pharmaceutical misconduct. ⁽⁴⁾

RICO Rewrites the Rules

The statute allows plaintiffs to pursue significantly higher damages, transforming the economics of corporate litigation. Wisner Baum's case demonstrates how this long-overlooked tool can expose and redress systemic deception. Key implications include:

• Expanded accountability: Enables courts to target organized patterns of fraud, not just isolated acts.
• Economic justice for payers: Third-party insurers can recover massive overpayments tied to deceptive marketing.
• Deterrence through damages: Mandatory tripling of awards dramatically increases liability for corporate misconduct.

"This case proves that RICO isn't just a relic of mob prosecutions—it's a modern framework for confronting corporate corruption," James said. "Other firms should study this decision closely. It opens the door to applying RICO in cases involving pharmaceutical fraud."

Legal analysts note that the Ninth Circuit's affirmation aligns with a growing public appetite for examining systemic misconduct in healthcare. Recent FDA enforcement actions, including a crackdown on misleading pharmaceutical advertising, signal heightened scrutiny. In September 2025, the FDA issued new enforcement letters targeting drugmakers and telehealth firms for deceptive direct-to-consumer ads. ⁽⁵⁾ 

Industry-Wide Consequences

Wisner Baum's success represents more than one case—it marks a broader shift in how the legal system can confront corporate deception. If the plaintiffs prevail at trial, Takeda and Eli Lilly could face not only massive financial penalties but also increased regulatory and congressional oversight.

"This is a watershed moment," James said. "For years, the pharmaceutical industry has operated with impunity, treating fines as the cost of doing business. RICO could change that. It gives us a framework to expose, dismantle, and deter fraud at its source."

Wisner Baum's Actos RICO litigation is already inspiring interest among other firms exploring similar strategies across healthcare and beyond. The firm continues to champion transparency and accountability as essential to restoring trust in medicine and the law.

References

1. "Wisner Baum: Ninth Circuit Affirms Actos RICO Class Action Certification Against Takeda and Eli Lilly." PR Newswire, 18 June 2025.
2. Painters and Allied Trades District Council 82 Health Care Fund v. Takeda Pharmaceuticals Company Limited, No. 18-55588, U.S. Court of Appeals for the Ninth Circuit, 3 Dec. 2019. Justia Law.
3. United States Supreme Court. Brief in Opposition to Petition for Writ of Certiorari, Painters & Allied Trades Dist. Council 82 Health Care Fund v. Takeda Pharmaceutical Co. Ltd., No. 19-1069. U.S. Supreme Court Docket, 30 Apr. 2020,  
4. United States Court of Appeals for the Ninth Circuit. Memorandum Opinion, Painters & Allied Trades Dist. Council 82 Health Care Fund v. Takeda Pharmaceutical Co. Ltd., No. 23-55742, 16 June 2025.
5. "U.S. Regulators Target Drugmakers over 'Misleading Advertisements.'" Financial Times, 9 Sept. 2025.