Insurance Company Files Large RICO Class Action Targeting Low-Testosterone Therapies: Claims Manufacturers Invented “Low-T” and Duped Payors Into Paying Billions

Insurer Medical Mutual of Ohio has sued Abbvie, Abbott Laboratories, Solvay, Eli Lilly, Auxilium, Actavis, and a host of subsidiaries over each company’s respective “low testosterone” disease awareness activities and promotion of testosterone replacement therapy (TRT) drugs. “These TRT drugs were marketed as part of a decade-long deceptive marketing scheme to transform the male aging process into a curable disease state,” argues the complaint. Medical Mutual of Ohio brought the case on behalf of any payors who paid all or a portion of the cost of AndroGel, Testim, Testopel, Axiron, Androderm, and Fortesta Gel—TRT products marketed by the defendants.

The complaint (available here) brings many of its claims under the Federal Racketeer Influenced and Corrupt Organization Act (RICO), accusing the drug companies of forming unlawful TRT drug marketing “enterprises”:

Beginning approximately in 2000 and continuing to the present, each Defendant implemented a marketing, advertising and promotion campaign by combining its own respective significant personnel and financial resources with a discreet and identifiable number of medical marketing firms and peer-influencing physicians through which Defendants (i) falsely and deceptively oversold the efficacy of the TRT drugs, (ii) failed to adequately warn of, and affirmatively misled the medical community regarding the severe side effects of the TRT drugs, and (iii) unlawfully promoted the TRT drugs for usage in populations for which it had not received FDA approval and for which the efficacy and side effects had not been established through adequate clinical evidence. 

…

Each Defendant and its associated participants established the respective Enterprises to accomplish the common goal of causing increased prescribing activity of the Defendant’s TRT drug(s) for off label uses for which the TRT drug(s) were not proven to be safe, effective, or useful. The schemes were accomplished through fraudulent, or false and deceptive, claims of efficacy and safety, medical usefulness, and for unlawful, off-label purposes.

“What was once a rare condition was suddenly said to affect up to 40 percent of middle-aged men, according to respected ‘thought leaders’—specialist urologists and endrocrinologists at teaching university hospitals—many of whom were in fact on one or more of defendants’ respective payrolls as consultants, speakers, and/or researchers,” according to the compaint. “Defendants’ respective unlawful marketing schemes directly convinced patients, physicians, and TPPs that hypogonadism was vastly underdiagnosed and undertreated, directly causing prescriptions for TRT drugs to increase 170% from 1999 to 2002.”

Increased Scrutiny into TRT Prescriptions

The complaint comes amidst heightened scrutiny over the potential over-prescribing of testosterone therapy. TRT drugs are FDA-approved only for the treatment of hypogonadism in men who produce no or low amounts of natural testosterone, often due to testicular or pituitary disease. The complaint alleges that the defendants targeted off-label TRT drug use in patients with “age-appropriate testosterone levels and patients with erectile dysfunction, diabetes, depression and obesity (among other off-label promotions).”

“Not only has it been recently established that the TRT drugs are ineffective for the vast majority of patients prescribed the drugs, unbeknownst to TPPs until recently,” states the complaint, “Defendants concealed serious side effects, including heart attacks, and other adverse events that Defendants knew or should have known were associated with TRT drug use.”

In September, an FDA advisory committee recommended narrowing indications for testosterone replacement to distinguish serious hypogonadism from the natural lowering of testosterone due to old age. The committee also voted to recommend requiring companies to conduct studies related to cardiovascular risks, risks that Medical Mutual’s complaint alleges companies have kept hidden.

While there is no set standard on what level of testosterone constitutes “low” in older men, some doctors apparently weren’t checking patients’ testosterone levels at all before writing prescriptions. 

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What jumps out from the complaint is the breadth of the allegations. Medical Mutual of Ohio is suing over an alleged industry-wide scheme across multiple companies to fraudulently create a “curable disease state.” This case implicates speaker programs, CME, and clinical trial transparency, so it will be interesting to follow as it goes down the line. 

We last wrote about RICO in the context of copayment coupons. There, the Court did not find that a racketeering “enterprise” existed between the companies giving coupons and the pharmacies distributing the drugs, and they dismissed the case. A viable RICO “enterprise” must be “separate and distinct from Defendants,” as required by statute, noted the judge. “Although the enterprise requirement is interpreted broadly, an association-in-fact enterprise nonetheless must have certain structural features, including a purpose, relationships among those associated with it, adequate longevity, and an ascertainable structure. It is not enough for the defendants to have a commercial relationship; the fraudulent conduct must be “undertaken on behalf of the enterprise,” not simply on behalf of each of the Defendant’s individual interests.

It will be interesting to see how a similar analysis will be applied to companies allegedly creating mini “enterprises” to expand awareness of testosterone deficiency and corresponding TRT products. We will keep track of this particular case, as well as other issues in the TRT space.