User:X750/UFCW Local 1776 v. Eli Lilly and Co.

UFCW Local 1776 v. Eli Lilly and Co. was a 2009 appeal filed in the United States Court of Appeals for the Second Circuit. The appeal, filed by Eli Lilly and Co. against United Food and Commercial Workers, Local 1776 (UFCW Local 1776), succeeded in removing the earlier class certification granted to UFCW Local 1776 in the United States District Court for the Eastern District of New York.

Background
Olanzapine, sold under the trade name 'Zyprexa' by Eli Lilly and Co. is a prescription only second-generation antipsychotic introduced in 1996, the third drug in its class to be approved by the FDA, following clozapine and risperidone. Initially, Zyprexa sales grew quickly, with more than 10 million units being sold annually prior to 2000. Studies began to emerge in the 2000s that there were several undisclosed side effects of Zyprexa: diabetes, obesity and elevated blood sugar levels. Zyprexa was marketed by Eli Lilly primarily as a treatment for schizophrenia, bipolar disorder and manic episodes, but physicians, who did not have to abide by the same marketing laws as manufacturers, prescribed Zyprexa for various other conditions such as dementia, anxiety, insomnia, among others with varying results.

Class action by UFCW Local 1776 began on behalf of various insurers and unions against Eli Lilly in 2008, who claimed Eli Lilly had engaged in fraud by overcharging for Zyprexa, whilst not disclosing its potential side effects properly. The request for class certification was filed in the United States District Court for the Eastern District of New York, where judge Jack B. Weinstein had recently denied a previous Securities Class Action. However, Weinstein granted the plaintiffs class certification. Weinstein defined the window for which plaintiffs could receive partial or full reimbursement for the cost of Zyprexa to be from June 20, 2001, to June 20, 2005. This specified period was the maximum period allowed under the Racketeer Influenced and Corrupt Organizations Act at the time, thus shortening the liability period for which the plaintiffs were arguing and lessening the potential damages paid.

Appeal
The decision to grant UFCW Local 1776 class certification was made by Weinstein on the basis that the individual claims of each plaintiff would be "too small to individually support this costly litigation." This decision was appealed by Eli Lilly in the Court of Appeals for the Second Circuit

Outcome
The court ruled that too many independent actions separated the fraudulent actions of Eli Lilly regarding Zyprexa and the injuries sustained by the third-party payors in the case. The ruling stated that the off-label marketing, rather than targeting third-party payors, was actually targeting physicians instead.

Impact
The verdict was cited in a 2017 case in the United States Court of Appeals for the Seventh Circuit, Sidney Hillman Health Center of Rochester v. Abbott Laboratories, where the court held that the third-party-payor's injury was too separated from the supposed fraudulent conduct in order to establish proximate cause. The AARP commented that the case had significant impact on the consumer's ability to recuperate damages caused by off-label abuse, due to the fact that plaintiffs had to individually litigate with pharmaceutical companies, some of which may not have the financial means to do so. Individual litigation also does not have the same impact as a class action lawsuit in setting precedents, meaning that future patients taking name medications with off-label uses and undisclosed side effects could also suffer the same injuries.

The Food and Drug Administration