In re: Insulin Pricing Litigation

Summary

The United States District Court for the District of New Jersey ruled on motions to dismiss the First Amended Consolidated Class Action Complaint in the insulin pricing multidistrict litigation. The court held that the TPP Plaintiffs’ RICO claims were barred by the indirect purchaser rule, while addressing timeliness and the assignability of RICO claims brought by direct-purchaser plaintiffs. The motions to dismiss were granted in part and denied in part.

Holdings

1. The TPP Plaintiffs were indirect purchasers because, considering the economic substance of the transactions, they reimbursed or paid portions of prescription costs incurred by beneficiaries and insured individuals rather than purchasing insulin directly from defendants. The indirect-purchaser rule therefore barred their RICO claims.
2. The co-conspirator exception did not save the TPP Plaintiffs' claims because they were not the first purchasers outside the alleged conspiracy and the distribution chain was interrupted by a wholesaler or patient.
3. FWK and RLT could assert assigned RICO claims because the Third Circuit requires an express assignment of claims, and the weight of authority supports the assignability of RICO claims.
4. The DP Plaintiffs adequately pleaded mail and wire fraud predicate acts, proximate causation, reliance sufficient at the pleading stage, and conduct of a RICO enterprise's affairs.
5. Because the DP Plaintiffs plausibly pleaded a substantive RICO violation, their derivative claims under 18 U.S.C. § 1962(d) survived the motions to dismiss.
6. The indirect-purchaser rule applied to the TPP Plaintiffs' Robinson-Patman Act claims, and those claims were dismissed because the TPP Plaintiffs were not direct purchasers and the co-conspirator exception did not apply.
7. The DP Plaintiffs' Section 2(c) Robinson-Patman Act claims were dismissed because they did not plausibly allege antitrust injury, consistent with the Court's prior decision.
8. The claims against CVS Health Corporation, Evernorth Health Inc., UnitedHealth Group Incorporated, OptumInsight, Inc., and Optum, Inc. did not require piercing the corporate veil because the complaint plausibly alleged their direct participation in the challenged conduct.

Questions Presented

1. Whether the indirect-purchaser rule barred the TPP Plaintiffs' RICO claims.
2. Whether the co-conspirator exception to the indirect-purchaser rule applied to the TPP Plaintiffs.
3. Whether RICO claims could be assigned to FWK Holdings and RDC Liquidating Trust.
4. Whether the DP Plaintiffs adequately pleaded mail and wire fraud predicate acts under Rule 9(b).
5. Whether the DP Plaintiffs adequately pleaded proximate causation, conduct of a RICO enterprise's affairs, and derivative conspiracy claims.
6. Whether the indirect-purchaser rule barred the TPP Plaintiffs' Robinson-Patman Act claims.
7. Whether the DP Plaintiffs adequately alleged antitrust injury under Section 2(c) of the Robinson-Patman Act.
8. Whether claims against certain corporate parents and affiliates required piercing the corporate veil.

Disposition

other