Most of my cases as a pharmaceutical liability attorney focus on a drug manufacturer’s failure to warn patients about a serious safety risk of its product. Unfortunately, there have been multiple cases where the pharmaceutical company not only failed to warn the public, but took active steps to cover up negative information or suppress scientific studies. This can form the basis of a failure to warn lawsuit filed by individuals or classes of individuals. In Connecticut Retirement Plans and Trust Funds v. Amgen et al., it was also the basis for a securities lawsuit alleging that a retirement investor was misled by public statements made by Amgen Inc. and four of its officers about the anemia drugs Aranesp and Epogen. The Ninth U.S. Circuit Court of Appeals joined two sister circuits in making its ruling.
In its lawsuit, CRPTF alleged that Amgen violated several provisions of the Securities Exchange Act with four public statements. It accused Amgen of downplaying the FDA’s safety concerns about its anemia products; concealing details about a clinical trial canceled because the product appeared to exacerbate tumor growth; exaggerating the safety of on-label uses; and lying about its practice of promoting off-label uses, which is illegal. These misstatements inflated the price of Amgen’s stock, CRPTF said, causing the retirement plan to lose money when the truth emerged and the stock price fell. CRPTF successfully moved to certify a class in district court, but Amgen filed an interlocutory appeal of that certification. It challenged the district court’s determination that plaintiffs need not show at the class certification stage that misrepresentations are material.
The Ninth Circuit started by dispensing with CRPTF’s motion to dismiss the appeal in light of three Ninth Circuit decisions. The court denied this motion, finding that none of the three applied closely enough to moot the issues. It then turned to Amgen’s contention that CRPTF failed to meet standards for class certification because it did not prove that the allegedly false statements by Amgen were material. This is putting the cart before the horse, the Ninth said, because materiality is an element of the merits of a securities fraud claim. Thus, it doesn’t affect class certification; a claim that cannot demonstrate materiality would be void as an individual or class action. Thus, it’s best addressed at trial or in summary judgment motions, the court said. In its holding, the Ninth joined the Seventh Circuit, which made the same ruling in 2010’s Schleicher v. Wendt, and the Third Circuit in 2011’s In re DVI Sec. Litig. This splits the three courts with three other circuits, the Ninth noted — but it agreed with the Seventh that this was based on a misreading. With similar reasoning, the Ninth rejected Amgen’s argument that it should be able to rebut the legal presumption of fraud on the market, because this is another way of debating materiality.
As a defective prescription drug lawyer, I’m pleased to see CRPTF will have a chance to prove its claim that Amgen made false public statements to protect its stock price. This is just the securities-law version of the same kind of misrepresentations made to customers, to protect sales of prescription drugs. Because prescription drugs generate millions or even billions in profits, drug companies often take steps to cover up safety information that might affect their profits. Sometimes that safety information is absolutely vital to patients — such as information that Aranesp and Epogen could exacerbate cases of cancer. As a dangerous medication attorney, I help clients hurt by this kind of deception hold drug companies legally and financially liable for their injuries.
If you or someone you love was seriously hurt by taking a prescription drug you believed you could trust, contact Carey, Danis & Lowe today. For a free, confidential case evaluation, send us an email or call toll-free at 1-877-678-3400.
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