Commonwealth of Pennsylvania, Plaintiff
v.
TAP Pharmaceutical Products, Inc.; Abbott Laboratories; AstraZeneca PLC; AstraZeneca, Holdings, Inc.;
AstraZeneca Pharmaceuticals LP; AstraZeneca LP; Bayer AG; Bayer Corporation; SmithKline Beecham Corporation d/b/a GlaxoSmithKline; Pfizer, Inc.;
Pharmacia Corporation; Johnson & Johnson; Alza Corporation; Centocor, Inc.; Ethicon, Inc.; Janssen Pharmaceutical Products, L.P.; McNeil-PPC, Inc.;
Ortho Biotech, Inc.; Ortho Biotech Products; L.P.; Ortho-McNeil Pharmaceutical, Inc;
Amgen, Inc.; Immunex Corporation; Bristol-Myers Squibb Company; Baxter International Inc.; Baxter Healthcare Corporation; Immuno-U.S., Inc.;
Aventis Pharmaceuticals, Inc.; Aventis Behring, L.L.C.; Hoechst Marion Roussel, Inc., Boehringer Ingelheim Corporation; Boehringer Ingelheim Pharmaceuticals, Inc.; Ben Venue Laboratories; Bedford Laboratories;
Roxane Laboratories; Schering-Plough Corporation; Warrick Pharmaceuticals Corporation; Schering Sales Corporation; Dey, Inc., Defendants
No. 212 M.D. 2004
COMMONWEALTH COURT OF PENNSYLVANIA
Argued: May 9, 2011
FILED: August 31, 2011
Argued: October 18, 2010
FILED: December 7, 2010
FILED: October 14, 2010
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge
HONORABLE ROBERT SIMPSON, Judge (P)
HONORABLE BARRY F. FEUDALE, Senior Judge
OPINION
BY JUDGE SIMPSON
Page 2
I. BACKGROUND...........................................................................5
A. Opening..............................................................................5
B. Parties................................................................................81. Plaintiff Agencies...........................................................8C. Procedural History................................................................16a. DPW/Pennsylvania Medicaid.....................................82. Johnson & Johnson Defendants.........................................12
b. Department of Aging/PACE.....................................10
II. FINDINGS AND CONCLUSIONS: INFLATED "PRICES"................22
A. WAC and AWP – Generally...................................................22
B. AWP System and Confusion - Findings......................................25
C. CPL Violation.....................................................................34
1. Tendency to Deceive......................................................34
2. Materiality..................................................................35
3. "Government Knowledge"...............................................35
a. Generally............................................................35
b. "Government Knowledge" – Other Findings..................36
(1) Radke Testimony..........................................36
(2) Other DPW Evidence.....................................38
(3) PACE Evidence............................................43
c. "Government Knowledge" – Conclusions......................46
4. Reliance/"Government Choice".........................................46
a. Generally............................................................46
b. "Government Choice" – Findings...............................48
5. Causation....................................................................50
6. Restoration Amounts......................................................53
a. Generally............................................................53
b. Rebates – Findings.................................................54
D. Negligent Misrepresentation....................................................56
Page 3
E. Conspiracy.........................................................................58
III. FINDINGS AND CONCLUSIONS: MARKETING THE SPREAD......60
A. Procrit®...........................................................................60
B. Remicade®........................................................................64
C. Conclusions.......................................................................67
IV. J&J GLOBAL CHALLENGE: JUDICIAL ESTOPPEL.....................68
A. Contentions........................................................................68
B. Analysis............................................................................70
V. J&J GLOBAL CHALLENGE: NON-JUSTICIABLE POLITICAL QUESTION.................................................................................75
A. Contentions.........................................................................75
B. Analysis............................................................................76
VI. J&J CHALLENGES TO CPL AWARDS.......................................84
A. Plaintiff Agencies Not Consumers.............................................841. Contentions................................................................84B. Challenge to Meaning and Application of "AWP"..........................89
2. Analysis....................................................................84
1. Contentions................................................................89C. Injunction Improper............................................................100
2. Analysis....................................................................91a. "Plain Meaning" Construction of AWP........................91
b. Target Audience...................................................95
c. Sophisticated Parties..............................................95
d. Materiality.........................................................98
e. Causation of Harm.................................................98
1. Contentions...............................................................100
2. Injunction Moot..........................................................101
3. Injunction Unnecessary.................................................105a. Contentions.......................................................1054. First Amendment.........................................................119
b. Standard for Injunction Under CPL...........................106
c. Urgent Necessity.................................................110
Page 4
D. Restoration Improper...........................................................122
1. Contentions................................................................122
2. Analysis – Generally....................................................123
3. No Basis for Injunction.................................................124
4. J&J Not "Acquire" Funds..............................................124
5. No Evidence of "Overpayment".......................................126
6. Challenge to Warren-Boulton's PBM Model........................127
a. Contentions.......................................................127
b. Analysis – Generally.............................................128
c. Global Challenges to "But For" Methodology...............129
d. Real-World Factors..............................................130
e. Improper Inclusions..............................................131
7. Restoration Before 1997................................................131
a. Contentions.......................................................131
b. Waiver.............................................................132
E. Civil Penalties Improper.......................................................132
1. Contentions...............................................................132
2. Evidence of Willfulness.................................................134
3. Changes to NDCs........................................................134
VII. COMMONWEALTH DEMAND FOR JNOV..............................136
A. Contentions......................................................................136
B. Analysis...........................................................................1381. Generally..................................................................138
2. Negligent Misrepresentation...........................................141
3. Civil Conspiracy.........................................................144
VIII. COMMONWEALTH DEMAND FOR NEW TRIAL.....................145
A. Contentions......................................................................145...
B.
