(CN) - Accused of falsely marketing Plavix as superior to aspirin to sell it for about 100 times more, Bristol-Myers Squibb and Sanofi-Aventis must defend themselves in state court, a federal judge ruled.
West Virginia Attorney General Darrell McGraw Jr. filed the complaint in the Circuit Court of Marshall County on Dec. 28, 2012, saying that the drugmakers advertise that the brand-name blood thinner is of finer quality than its generic counterpart for certain indicated usages.
Bristol-Myers Squibb Co., Sanofi-Aventis U.S. LLC, and two Sanofi subsidiaries allegedly charge about 100 times more for Plavix despite knowing that the brand-name heart medicine works no better than aspirin.
On behalf of the Public Employees Insurance Agency, West Virginia seeks up to $5,000 for each willful violation of the West Virginia Consumer Credit Protection Act and Insurance Fraud Act. Such funds would reimburse member-employees for excessive insurance payments for Plavix, according to the complaint.
After the drugmakers removed the case to the Northern District of West Virginia, the action was consolidated with other Plavix suits facing multidistrict litigation in New Jersey.
West Virginia countered that the federal court lacks diversity jurisdiction because the suit is filed under parens patriae
- literally "parent of the country," which lets a state sue as the guardian of its citizens for a public interest.
Bristol-Myers and Sanofi countered that West Virginia is only a nominal party in suit, and that the real party is its public insurance agency, a citizen of the state.
They also said that the case is a removable "class action" under the Class Action Fairness Act, and that disputed federal issues plague the matter.
U.S. District Judge Freda Wolfson said on Feb. 26 that West Virginia's Northern District Court must remand the case to Marshall County.
"I find that the state is the real party in interest in this enforcement action," the unpublished ruling states. "I do not find convincing defendants' argument that the complaint 'overwhelmingly' seeks to vindicate the specific interests of [Public Employees Insurance Agency] PEIA, not the state in general. The fact that the state, on behalf of PEIA, also seeks recovery of prescription drug costs expended by PEIA does not undermine the state's broader interest in its case."
Case law does not preclude the state from bringing consumer-protection claims concerning an industry highly regulated by the federal government, the ruling states.
"The 'degree of federal regulation' in the pharmaceutical industry does not bar the state's claims in the present case because the [Consumer Credit Protection Act] CCPA claims asserted against defendants are complementary to any federal regulations," Wolfson wrote.
The fact that the state is seeking the remedy of injunctive relief "alone supports the position that the state is the only real party in interest," the judge added.
The drugmakers failed to show "substantial" federal issues, the judge found, relying on a 2005 decision in Grable & Sons Metal Products Inc. v. Darue Engineering & Manufacturing
"Other than the fact that plaintiff's claims may implicate the [Food, Drug, and Cosmetic Act] FDCA - that is, the FDCA may be consulted or analyzed in establishing certain elements of the state law claims - that in and of itself is not substantial under Grable
to support federal question jurisdiction," Wolfson wrote.
She added: "Taking the pleadings as a whole, I am satisfied that the state has concrete interests and a substantial stake in the litigation; put simply, the benefits of the remedies that the state has sought flow to the state as a whole," Wolfson wrote.
Sanofi-Aventis reported more than $45.7 billion in revenue 2013, whereas Bristol-Myers reported $17.621 billion
in net sales in 2012.