Insulin Giants Beat RICO Claims Brought By Patients

As reported in Law360, a proposed class of diabetes patients who say three major insulin manufacturers caused them to overpay for the medication can’t pursue Racketeer Influenced and Corrupt Organizations Act claims against the drugmakers, a New Jersey federal judge said Friday, because the consumers didn’t buy the drugs directly from the companies.

In partially granting a defense motion to dismiss the suit, U.S. District Judge Brian Martinotti said the plaintiffs’ RICO claims against Novo Nordisk, Sanofi-Aventis and Eli Lilly and Co. were barred by the so-called indirect purchaser rule since the patients are three levels down the distribution chain from the manufacturers.

“The plaintiffs have merely alleged a pass-through of the inflated price from one of the various intermediaries to the consumers. Such allegations cannot overcome an indirect purchaser rule challenge,” Judge Martinotti said in a written opinion that dismissed the RICO claims and certain other counts from the putative class action.

The defendants are represented by Walsh Pizzi O’Reilly Falanga LLP, Reed Smith LLP, Gibbons PC, Davis Polk & Wardwell LLP and others.

The case is In Re Insulin Pricing Litigation, case number 3:17-cv-00699, in the U.S. District Court for the District of New Jersey.

Click here to view the Law360 article.