Pharmaceutical Class Actions: When Medications Cause Harm

Introduction

The pharmaceutical industry is one of the most heavily litigated sectors in the United States, with class action lawsuits serving as a critical mechanism for addressing alleged industry misconduct. These lawsuits typically involve claims that pharmaceutical companies have engaged in practices that harm consumers, healthcare providers, insurers, or competitors.

Pharmaceutical class actions play a vital role in the healthcare landscape by potentially reducing drug costs, improving drug safety information, and holding companies accountable for their marketing and pricing practices. For consumers, these lawsuits can result in significant financial compensation for overpayment or injuries.

In this article, we'll explore the most common types of pharmaceutical class actions, highlight notable settlements, and explain how affected individuals can participate in these lawsuits to recover compensation.

Price Fixing and Antitrust Violations

Price fixing and other antitrust violations are among the most significant types of pharmaceutical class actions. These cases typically allege that drug manufacturers conspired to artificially inflate prices or engaged in other anti-competitive behaviors that violated federal or state antitrust laws.

Common antitrust allegations in pharmaceutical class actions include:

• Direct price fixing: Agreements between competitors to set prices at artificially high levels
• Market allocation: Agreements between competitors to divide markets or customers
• Bid rigging: Coordination between companies during bidding processes for contracts
• Group boycotts: Collective refusals to deal with specific customers or suppliers

For example, a massive price-fixing investigation has resulted in numerous class actions against generic drug manufacturers. These lawsuits allege that competitors colluded during industry gatherings and private meetings to allocate market share and fix prices for various generic medications, causing consumers and insurers to pay inflated prices.

In 2020, the Department of Justice charged Teva Pharmaceuticals and several other generic drug manufacturers with price fixing, alleging they conspired to raise prices for essential medications by as much as 1,000%. Related class actions seek to recover the overcharges paid by consumers and third-party payers.

Off-Label Marketing and Misrepresentations

Pharmaceutical companies are legally permitted to market their drugs only for FDA-approved uses. When companies promote their products for "off-label" uses (those not approved by the FDA) or make misleading claims about a drug's efficacy or safety, they may face class action lawsuits from consumers and third-party payers who relied on these misrepresentations.

Off-label marketing and misrepresentation class actions typically involve allegations that a pharmaceutical company:

• Promoted drugs for unapproved uses: Actively marketed medications for conditions not included in the FDA-approved labeling
• Exaggerated benefits: Made claims about a drug's efficacy that weren't supported by clinical evidence
• Downplayed risks: Minimized known safety concerns or side effects in marketing materials or discussions with healthcare providers
• Used misleading comparisons: Made deceptive claims about how a drug compares to competitors' products

For instance, GlaxoSmithKline paid $3 billion to resolve criminal and civil liability arising from allegations that it promoted several drugs for unapproved uses and failed to report safety data. Alongside government actions, class actions were filed on behalf of consumers and third-party payers who paid for prescriptions based on allegedly misleading marketing.

Undisclosed Side Effects

Pharmaceutical manufacturers have a legal duty to warn about known or reasonably foreseeable risks associated with their products. When companies fail to adequately disclose known side effects or conceal safety information, they may face class action lawsuits from individuals who experienced those undisclosed side effects.

Undisclosed side effect class actions typically allege that a pharmaceutical company:

• Concealed known risks: Withheld information about serious side effects identified during clinical trials or post-marketing surveillance
• Provided inadequate warnings: Failed to include appropriate warnings on product labels or in patient information
• Delayed safety updates: Knew about serious adverse events but delayed updating product labeling or notifying healthcare providers
• Misrepresented safety data: Manipulated clinical trial data to underrepresent the frequency or severity of adverse events

Notable examples include litigation over drugs like Vioxx, which was withdrawn from the market after being linked to increased risk of heart attacks and strokes. Merck ultimately agreed to pay $4.85 billion to resolve claims that it failed to adequately warn patients and doctors about these cardiovascular risks.

Similarly, lawsuits involving medications like Actos (linked to bladder cancer), Pradaxa (excessive bleeding), and Risperdal (gynecomastia in young males) have alleged that manufacturers knew about these serious side effects but failed to properly warn patients and physicians.

Delaying Generic Competition

Generic drugs typically cost 80-85% less than their brand-name equivalents. To maximize profits before patents expire, some brand-name pharmaceutical companies have allegedly employed various strategies to delay generic competition—tactics that have sparked numerous class action lawsuits.

Common allegations in generic delay class actions include:

• Pay-for-delay settlements: Payments from brand-name manufacturers to potential generic competitors in exchange for delaying market entry
• Product hopping: Making minor, non-therapeutic changes to a drug to shift the market to a "new" version with fresh patent protection shortly before generic entry of the original formulation
• Sham litigation: Filing baseless patent infringement lawsuits against generic manufacturers to trigger automatic delays in the generic approval process
• Citizen petition abuse: Filing meritless FDA citizen petitions to delay generic approvals

For example, the makers of Lidoderm (lidocaine patch) faced class action lawsuits alleging they paid a potential generic competitor over $100 million to delay launching its generic version. This settlement required the companies to pay $104.75 million to consumers and third-party payers who had allegedly paid inflated prices for the medication during the delay period.

Notable Pharmaceutical Class Action Settlements

Pharmaceutical class actions have resulted in some of the largest settlements in U.S. history. Here are a few notable examples:

• Average Wholesale Price Litigation ($346 million): Multiple pharmaceutical companies settled claims that they reported inflated "average wholesale prices," causing Medicare, Medicaid, and private insurers to overpay for prescription drugs.
• Synthroid Marketing Litigation ($87.4 million): The manufacturer of Synthroid (levothyroxine) settled claims that it suppressed a study showing bioequivalence between its brand-name drug and less expensive generic alternatives.
• Neurontin Marketing Settlement ($325 million): Pfizer resolved claims that it fraudulently marketed Neurontin for unapproved uses, causing consumers and third-party payers to pay for prescriptions that weren't medically necessary or appropriate.
• EpiPen Price Increase Litigation ($345 million): Manufacturers and distributors settled claims that they engaged in anticompetitive conduct that artificially inflated the price of EpiPen auto-injectors.
• Provigil Antitrust Litigation ($512 million): The maker of Provigil (modafinil) settled allegations that it paid potential generic competitors to delay bringing lower-cost alternatives to market.

These settlements typically include funds for both direct purchasers (such as pharmacies) and indirect purchasers (consumers and third-party payers), though the specific allocation varies by case.

How to Join a Pharmaceutical Class Action

If you've taken a prescription medication and believe you may be eligible to participate in a pharmaceutical class action settlement, here's how to get involved:

1. Identify relevant cases: Stay informed about pending pharmaceutical class actions by monitoring news sources, settlement websites, and consumer protection resources. Services like GetBack can help identify settlements for which you may be eligible.
2. Determine eligibility: Review the class definition carefully to determine if you qualify. Pharmaceutical class actions typically define the class based on: The specific medication(s) involved The time period during which you purchased or used the medication The specific harm or economic loss alleged (e.g., price overpayment, undisclosed side effects) Your status as a direct purchaser, indirect purchaser, or third-party payer
3. Gather documentation: Collect evidence of your purchases or use of the medication. This might include: Pharmacy records or receipts Insurance claims or explanation of benefits statements Medical records documenting prescriptions or adverse effects Pill bottles or packaging showing lot numbers
4. Submit your claim: Follow the instructions provided in the class notice to submit your claim by the deadline. Most pharmaceutical class action settlements allow claims to be filed online through a settlement website.

Conclusion

Pharmaceutical class actions serve as a crucial check on industry practices, potentially reducing drug costs, improving drug safety information, and compensating individuals who have been harmed by alleged misconduct. These lawsuits often result in substantial settlements that provide meaningful compensation to affected consumers, healthcare providers, and third-party payers.

If you take prescription medications, it's worth staying informed about pharmaceutical class actions that might affect you. By understanding the types of misconduct that typically lead to these lawsuits and knowing how to participate when settlements are reached, you can ensure you receive any compensation to which you're entitled.