Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Ill.: Pharmaceutical companies unable to cap unethical eye drop sales practices claims, (Feb 13, 2015)

By Greg Hammond, J.D.

A motion to dismiss deceptive business practices claims, filed by manufacturers and distributors of certain eye drops, was properly denied, the federal district court in Benton, Illinois has decided. In rejecting the pharmaceutical companies’ motion for reconsideration, the court found that the initial motion to dismiss failed as a matter of law, as the plaintiff consumers adequately alleged that they suffered injury based on eye drop bottles that produced drops too large for eyes (Eike v. Allergan, Inc., February 12, 2015, Yandle, S.).

Background. Consumers Charlene Eike, Shirley Fisher, Jordan Pitler, and Alan Raymond brought suit on behalf of themselves and a class of individuals who purchased certain eye drops from Allergan, Inc. and other manufacturers and distributors of topical prescription ophthalmic pharmaceuticals. Specifically, the consumers alleged that Allergan made and sold eye drops in bottles that produced drops that were too large for eyes, that excess liquid was wasted when it ran down the cheek of the consumers, and caused consumers to purchase additional drops to account for the waste. Additionally, the consumers claimed that the resulting waste led consumers to need additional drop bottles for which they were not necessarily reimbursed. Further, some of the consumers did not receive the additional medication as they could not afford to purchase the additional bottles. The consumers brought claims for violations of both the Illinois Consumer Fraud and Deceptive Business Practice Act (ICFA) and the Missouri Merchandising Practices Act (MMPA).

The court previously denied Allergan’s motion to dismiss the ICFA and MMPA claims. Allergan has now moved for reconsideration, or—in the alternative—to seek an order certifying three issues for interlocutory appeal.

Reconsideration. The court initially denied Allergan’s motion to dismiss, finding that the consumers sufficiently alleged an unfair practice under the ICFA and the MMPA. In support of its motion for reconsideration, Allergan argued that the Seventh Circuit’s opinion in Batson v. Live Nation Entertainment, Inc. (746 F.3d 827, 2014-1 Trade Cases ¶78,720) confirms that the consumers’ ICFA and MMPA claims fail as a matter of law. The court rejected this argument, finding that Batson did not represent any change in law warranting reconsideration and that the Seventh Circuit merely applied existing principles.

Further, applying Batson, which holds that courts need only find one of the Sperry factors to conclude that consumers stated a claim, the consumers sufficiently alleged their ICFA and MMPA claims. Specifically, the court found that the consumers sufficiently alleged that the size of the eye drops would cause them to use the prescribed amount before the insurance would cover a new prescription, and that they consequently suffered injury by needing to forego a necessary medication. The motion for reconsideration was therefore denied.

Certification for interlocutory appeal. In the alternative, Allergan requested that the court certify three issues for interlocutory appeal: (1) whether a plaintiff states a viable unfair practices claim under the ICFA or MMPA by alleging that an FDA-approved product would cost the plaintiff less if it were redesigned; (2) whether the sale of an FDA-approved prescription is exempted from liability under the ICFA; and (3) whether state-law claims that seek to impose liability on pharmaceutical manufacturers or distributors for not redesigning their FDA-approved prescription medications are preempted by federal law.

The court denied certification for all three issues, finding that Question 1 did not present a pure question of law; Question 2 was not suitable for appeal because it concerned an affirmative defense that was not properly before the court and the court never reached the substance of that argument; and Question 3 was not suitable for appeal because questions of fact still need to be determined before the court can decide a preemption issue.

The case number is 12-cv-1141-SMY-DGW.

Attorneys: John G. Simon (Simon Law Firm PC) for Charlene Eike. Troy A. Bozarth (HeplerBroom LLC) for Allergan, Inc.

Companies: Allergan, Inc.

Cases: StateUnfairTradePractices IllinoisNews