Holley v. Gilead Scis., Inc., Case No. 18-cv-06972-JST

379 F.Supp.3d 809

Adrian HOLLEY, et al., Plaintiffs,

v.GILEAD SCIENCES, INC., Defendant.

Case No. 18-cv-06972-JST

United States District Court, N.D. California.

Signed May 10, 2019

Steve W. Berman, Pro Hac Vice, Anne Fornecker Johnson, Pro Hac Vice, Hagens Berman Sobol Shapiro LLP, Seattle, WA, Benjamin Lloyd Crump, Pro Hac Vice, Ben Crump Law, PLLC, Tallahassee, FL, Katrina R. Ashley, Pro Hac Vice, Robert Carl Hilliard, Pro Hac Vice, Hilliard Martinez Gonzalez LLP, Corpus Christi, TX, Shana E. Scarlett, Hagens Berman Sobol Shapiro LLP, Berkeley, CA, for Plaintiffs.

Joshua Eugene Anderson, Alycia Ann Degen, Debra Elaine Pole, Sidley Austin LLP, Los Angeles, CA, Daniel Adam Spira, Pro Hac Vice, Sidley Austin LLP, Chicago, IL, Inn-Young Park, Sidley Austin LLP, San Francisco, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

Re: ECF No. 45

JON S. TIGAR, United States District Judge Before the Court is Defendant Gilead Sciences, Inc.'s motion to dismiss. ECF No. 45. The Court will grant the motion in part and deny it in part.

I. BACKGROUND

This case alleges that individuals who have taken one or more of Gilead's drugs containing tenofovir disoproxil fumarate ("TDF") have suffered unnecessary kidney and bone damage resulting from Gilead's failure to provide adequate warnings and its decision to develop drugs containing TDF rather than the safer compound tenofovir alafenamide fumarate ("TAF"). The complaint alleges the following: Plaintiffs have taken one or more drugs manufactured by Gilead that contain TDF. ECF No. 1 ¶ 22. Since 2001, Gilead "has received FDA [Food and Drug Administration] approval for five TDF-based drugs for the treatment of HIV": Viread in 2001, Truvada in 2004, Atripla in 2006, Complera in 2011, and Stribild in 2012. Id. ¶¶ 188-93. Viread has also been approved to treat Hepatitis B, and Truvada has been approved for use "in combination with safer sex practices for pre-exposure prophylaxis (PrEP) to reduce the risk of sexually acquired HIV-1 in adults at high risk." Id. ¶¶ 189, 190. Gilead has received FDA approval for three drugs containing TAF that are counterparts to its previously approved TDF drugs: Genvoya in 2015 and Odefsey and Descovy in 2016. Id. ¶¶ 196-98. Genvoya, Odefsey, and Descovy are "identical to" to Stribild, Complera, and Truvada, respectively, "except for the substitution of TAF for TDF." Id.

Prior to the approval of Viread, Gilead had discovered TAF. Id. ¶ 194. "TDF and TAF are two prodrug versions of the same parent drug, tenofovir, though TAF requires a dose more than ten times smaller than TDF to obtain the same therapeutic effect." Id. "Because TAF can be administered at a much lower does than TDF, its use is associated with less toxicity and fewer side effects." Id. ¶ 7. Prior to selling its first TDF drug in 2001, "Gilead knew that TDF posed a safety risk to patients' kidneys and bones, ... that the relatively high dose of TDF created a greater risk of toxic effects, and that bone and kidney toxicities were even more likely to be seen with long-term use of TDF for the treatment of a virus that, for the foreseeable future, has no cure." Id. ¶ 5. "Despite knowing that TAF could be given at a much lower, safer dose," "that TDF causes kidney and bone damage and that TAF is safer for patients' kidneys and bones, Gilead designed the TDF Drugs to contain TDF rather than safer TAF." Id. ¶¶ 7, 279. When Gilead began selling its TAF drugs, it "convinced doctors to switch their patients from TDF-based to TAF-based regimens by demonstrating TAF's superior safety profile over TDF with respect to kidney and bone toxicity – the very benefits that Gilead could have and should have incorporated into its prior product designs but withheld from doctors and patients for over a decade." Id. ¶ 11.

"Stribild is even more toxic to patients' kidneys and bones than Gilead's other TDF-based products" because it contains a higher dose of TDF than required. Id. ¶ 14. In addition to TDF, Stribild contains cobicistat, a "pharmacoenhancer or ‘booster’ that inhibits the breakdown of elvitegravir, another active ingredient in Stribild." Id. ¶ 12. Prior to submitting Stribild for FDA approval, Gilead knew that "TDF-associated renal toxicity occurs more frequently in patients taking TDF as part of a boosted regimen," and that the TAF dosage in Genvoya, the TAF-equivalent to Stribild, could be reduced "from 25 mg to 10 mg to account for the fact that cobicistat significantly increases tenofovir concentrations." Id. ¶¶ 13-14. Nonetheless, "Gilead did not reduce the dose of TDF when it designed Stribild." Id. ¶ 14.

Gilead also "failed to adequately warn physicians and patients about the risks and safe use of TDF. Gilead provided only the weakest, inadequate warnings to doctors and patients about the need for frequent monitoring of all patients for TDF-associated kidney and bone damage – preventing doctors from detecting early signs of TDF toxicity." Id. ¶ 15. For example, "after May 21, 2007, the TDF labels do not disclose that adverse kidney and bone events occurred in patients without pre-existing risk factors – which, combined with the warning to only routinely monitor patients at risk – gives the false impression that TDF is only harmful to people otherwise at risk for kidney and bone injuries." Id. ¶ 346. "Gilead's monitoring instructions for at risk patients taking Viread, Truvada, Atripla, and Complera, and patients taking Stribild are also inadequate because they fail to recommend a specific, frequent monitoring schedule for doctors to assess patients' kidney function." Id. ¶ 347. "Regularly scheduled, frequent monitoring of kidney function is necessary to catch early signs of TDF-induced toxicity and prevent injury because patients are generally asymptomatic during the early stages." Id. ¶ 345. Early detection of toxicity "is key to preventing serious, potentially irreversible renal injury," and monitoring also "ensure[s] that patients' kidneys are healthy enough to continue treatment" or that patients receive necessary dosage adjustments. Id. ¶ 324, 338.

Plaintiffs allege a financial motive for Gilead's alleged conduct. They allege that Gilead stopped developing TAF in 2004, claiming that it was too similar to TDF to continue development, but in reality did so because "Gilead did not want to hurt TDF sales by admitting that its TDF-based products are unreasonably and unnecessarily unsafe." Id. ¶ 8. Gilead also stood to gain by having two different periods of drug exclusivity: first for TDF drugs and later for TAF drugs. "Only once Gilead realized billions in sales through most of the TDF patent life did it seek to market safer TAF-based versions of its HIV medications." Id. ¶ 10. Gilead "provides stronger monitoring warnings to physicians and patients in the European Union than it does in the United States for the exact same TDF products.... There is no scientific or medical rationale for these differences. Gilead was more concerned with increasing or maintaining crucial U.S. sales than it was in safeguarding patients from the known risks of TDF." Id. ¶ 16.

On the basis of these allegations, Plaintiffs assert design-defect and failure-to-warn claims under multiple states' product liability and negligence laws. Plaintiffs also assert state-law fraud and consumer protection claims, as well as claims for the breach of implied warranty and merchantability.

The complaint names 140 plaintiffs from 31 states. ECF No. 1 ¶¶ 24-163. Plaintiffs' counsel filed a nearly identical case, Dowdy v. Gilead Sciences, Inc. , Case No. 3:19-cv-00481-JST, on behalf of 25 different plaintiffs from 10 of the 31 states involved in this case. Case No. 3:19-cv-00481-JST, ECF No. 1 ¶¶ 23-47. The parties filed consolidated briefing on Gilead's motion to dismiss in both cases. ECF Nos. 45, 54, 60; Dowdy ECF Nos. 30, 40, 45. The Court granted the parties' stipulation to consolidate these cases for pretrial purposes on April 29, 2019, and ordered that "[t]he master docket and master file for the consolidated actions shall be 3:18-cv-06972-JST and the consolidated action shall bear the caption Holley, et al. v. Gilead Sciences Inc. " ECF No. 67 at 6.

Gilead moves to dismiss all of Plaintiffs' claims as preempted under federal law. It also argues that Plaintiffs' failure-to-warn claims should be dismissed because they do not adequately allege causation, and that their claims under state fraud and consumer protection laws should be dismissed because they do not comply with the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). Finally, Gilead argues that another court's decision, AIDS Healthcare Foundation, Inc. v. Gilead Sciences, Inc. , No. C 16-00443 WHA, 2016 WL 3648623, at *9 (N.D. Cal. July 6, 2016), aff'd , 890 F.3d 986 (Fed. Cir. 2018), establishes that it had no duty to introduce drugs containing TAF at an earlier date, and that Plaintiffs' claims based on that allegation should therefore be dismissed.

II. JURISDICTION

This case involves more than 100 plaintiffs, and Gilead does not contest that at least some of the plaintiffs are of diverse citizenship from Gilead, which Plaintiffs allege is a Delaware corporation with a principal place of business in California. ECF No. 1 ¶¶ 24-164. Gilead also does not contest that the total amount in controversy exceeds $ 5,000,000, exclusive of interest and costs, or that each Plaintiff's claims exceed $ 75,000. Id. ¶ 18. This case therefore meets the statutory requirements for a "mass action" under the Class Action Fairness Act of 2005 ("CAFA"), and the Court has subject matter jurisdiction under 28 U.S.C. § 1332(d). Corber v. Xanodyne Pharm., Inc. , 771 F.3d 1218, 1222 (9th Cir. 2014) (en banc) ("CAFA provides federal district courts with original jurisdiction over ‘mass actions’ if the actions meet all of the statutory requirements. 28 U.S.C. § 1332(d).").

The statute excludes from the definition of "mass action" any civil action in which...