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California Judge Denies Class Certification In Action Alleging Unfair Prices for Prescription Meds

Legal News GavelIn Saavedra v. Eli Lilly & Co., the plaintiffs brought suit against the manufacturer of the anti-depressant drug Cymbalta, alleging not that they overpaid for the product but that they were harmed because they received a product that had less value than what they expected to receive. The plaintiffs sought to certify four classes under consumer fraud protection statutes in four jurisdictions:  California, Massachusetts, New York, and Missouri. Initially, the trial court rejected these classes, stating that the plaintiffs had asserted an “unusual” theory of recovery. More specifically, the plaintiffs omitted any allegations indicating how they suffered or experienced the withdrawal symptoms.

Instead, the plaintiffs contended that they received a product that had less utility, which they defined as the benefit they believed they would receive from using the product. The trial court rejected this theory, noting that it focused only on the refund associated with users’ out-of-pocket costs. In reality, the prescription drug market’s price and value relationship is severed due to the nature of how prescription drugs are marketed and sold.

The plaintiffs refiled their class action, seeking to certify both Massachusetts and New York classes and seeking only the minimum statutory damages that each state’s laws provided. Still, the plaintiffs needed to show that each member of the respective classes suffered an injury as a result of the defendant’s allegedly misleading conduct. The plaintiffs were only able to demonstrate that they suffered harm through paying the wrong price for the drug. The trial court again denied the plaintiffs’ motion for class certification, noting that since supply and demand in the prescription drug market is inefficient, the plaintiffs were unable to rely on the mere price of the product to illustrate that an injury had occurred.

According to the trial court, relying on the theory that the plaintiffs were forced to pay a premium for the drug was too akin to the rejected fraud-on-the-market theory, and it was too cumbersome because it would require the court to conduct an individualized inquiry into the amount of money each drug recipient paid and the benefit that they ultimately received. The fraud-on-the-market theory holds that buyers have general knowledge about alleged misrepresentations, that the misrepresentations were material, that the product was sold in an efficient market, and that the product was purchased during a relevant timeframe.

The court also rejected the plaintiffs’ proposal to use the defendant’s own internal documents reflecting the defendant’s marketing strategies, concluding that any market research showing whether the defendant actually charged a price premium for its product, among other things, was unnecessary.

If you or someone you love has been injured as the result of using a prescription drug, you may be entitled to compensation. The experienced and compassionate pharmaceutical injury lawyers at Moll Law Group know just how devastating this time can be for you and your family. Having represented many victims from our main office in Chicago and elsewhere in the country, including California and Texas, we also know what it takes to successfully investigate a claim and obtain the compensation a victim deserves for his or her suffering. Call us now at 312-462-1700 or contact us online to set up your free consultation now.

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