Ninth Circuit Decision Increases Risk of RICO Economic Loss Claims Against Pharmaceutical Manufacturers and Highlights Evolving Circuit Split
View Debevoise In Depth
Key takeaways:
- In a recent decision issued in Painters vs. Takeda, the U.S. Court of Appeals for the Ninth Circuit held that prescription drug purchasers can satisfy RICO’s proximate causation requirement at the pleading stage merely by alleging that had they known of a previously undisclosed safety risk, they would not have purchased the drug.
- The Ninth Circuit recognized a circuit split on the question of whether the chain of causation between a pharmaceutical manufacturer’s purported misrepresentations or omissions to physicians and end payments for drugs by consumers and third-party payors is too attenuated to satisfy RICO’s proximate cause requirement.
- On February 26, 2020, the Painters defendants filed a petition for writ of certiorari with the U.S. Supreme Court that could bring much-needed clarity on the viability of using generalized proof of causation to establish a RICO claim.