United States District Court, E.D. California
KRISTI LAURIS, et. al., Plaintiffs,
v.
NOVARTIS AG, et al., Defendants.
FINDINGS AND RECOMMENDATIONS RECOMMENDING DENYING
DEFENDANTS' MOTION TO DISMISS (ECF No. 33-35, 44, 45)
OBJECTIONS DUE WITHIN FOURTEEN DAYS
On June
20, 2016, Defendant Novartis Pharmaceuticals Corporation
(“NPC”) filed a motion to dismiss which was
referred to the undersigned for issuance of findings and
recommendations pursuant to 28 U.S.C. § 636(b)(1)(B) and
Local Rule 302. (ECF Nos. 33, 38.)
Oral
argument on the motion to dismiss was conducted on July 20,
2016. Richard Elias and Tamara Spicer appeared for
Plaintiffs, Julie Park appeared telephonically for Defendant
Novartis AG, and Robert Johnston and Kelly Matayoshi appeared
for Defendant Novartis Pharmaceuticals Corp. For the reasons
set forth below, the Court recommends that Defendants'
motion to dismiss be denied.
I.
BACKGROUND
On
March 22, 2016, Plaintiff Kristi Lauris filed this action on
behalf of herself and as guardian ad litem for minor
Plaintiffs L.L. and Taylor Lauris against Defendants Novartis
AG and Novartis Pharmaceuticals Corporation. (ECF No. 1.)
After Defendant Novartis Pharmaceutical Corporation filed a
motion to dismiss, Plaintiffs filed a first amended complaint
on June 3, 2016. (ECF No. 18-20, 28.)
On June
20, 2016, Defendant Novartis Pharmaceuticals Corporation
filed a motion to dismiss.[1] (ECF No. 33-35.) On June 22, 2016,
District Judge Lawrence J. O'Neill referred the motion to
the undersigned for issuance of findings and recommendations.
(ECF No. 38.) On July 5, 2016, Defendant Norvartis AG filed a
notice of joinder in the motion to dismiss. (ECF No. 42.)
Plaintiff filed an opposition on July 7, 2016. (ECF No. 44.)
Defendants filed a reply on July 13, 2016. (ECF No. 45.)
II.
LEGAL
STANDARD FOR MOTION TO DISMISS
Under
Federal Rule of Civil Procedure 12(b)(6), a party may file a
motion to dismiss on the grounds that a complaint
“fail[s] to state a claim upon which relief can be
granted.” A motion under Rule 12(b)(6) tests the legal
sufficiency of a claim. Navarro v. Block, 250 F.3d
729, 732 (9th Cir. 2001). In deciding a motion to dismiss,
the court is to accept as true “all material
allegations of the complaint, . . . as well as all reasonable
inferences to be drawn from them.” Navarro,
250 F.3d at 732. “[T]o be entitled to the presumption
of truth, allegations in a complaint . . . may not simply
recite the elements of a cause of action, but must contain
sufficient allegations of underlying facts to give fair
notice and to enable the opposing party to defend itself
effectively.” Starr v. Baca, 652 F.3d 1202,
1216 (9th Cir. 2011). While detailed factual allegations are
not required, the factual allegations of the complaint must
plausibly suggest an entitlement to relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009); Starr, 652
F.3d at 1216.
Dismissal
of the complaint is appropriate where the complaint fails to
state a claim supportable by a cognizable legal theory.
Balistreri v. Pacifica Police Dep't, 901 F.2d
696, 699 (9th Cir. 1988). Where it is apparent on the face of
the complaint that the limitations period has run, defendants
may raise a statute of limitations defense in a motion to
dismiss. Jablon v. Dean Witter & Co., 614 F.2d
677, 682 (9th Cir. 1980); Von Saher v. Norton Simon
Museum of Art at Pasadena, 592 F.3d 954, 969 (9th Cir.
2010).
III.
ALLEGATIONS
IN FIRST AMENDED COMPLAINT
Defendants
manufactured Tasigna which is a prescription medication for
the treatment of chronic myeloid leukemia
(“CML”). (First Am. Compl. ¶ 12, ECF No.
28.) CML is a cancer that starts in the blood forming stem
cells of the bone marrow. (Id.) Tasigna is a
tyrosine-kinase inhibitor that blocks chemical enzymes in the
cancer cells called tyrosine kinases inhibiting their growth
and division. (Id.) Defendants developed Tasigna to
replace Gleevec, a drug for which Defendants' patent
expired on July 4, 2015. (Id. at ¶¶
13-15.) Defendants developed an aggressive advertising
campaign to convince physicians to prescribe, and patients to
take, Tasigna rather than Gleevec. (Id. at 15.) As
early as 2010, Defendants strategy was to have Tasigna take
over Gleevec's business as the patent expiration date
approached. (Id.)
Plaintiffs
contend that Defendants promoted the efficacy of Tasigna
while failing to disclose any safety information,
misrepresented that Tasigna was approved as a first-line
therapy for CML when it had only been approved as a
second-line therapy, and described Tasigna as the “next
generation” treatment for CML which misleadingly
suggested that it was superior to other similar drugs when
this had not been demonstrated by substantial evidence or
clinical experience. (Id. at ¶ 16.) On July 29,
2010, the FDA issued a cease and desist letter to Novartis
finding that Defendants had misbranded Tasigna in violation
of FDA regulations and demanding that Defendants immediately
cease its misleading and illegal advertising. (Id.)
Plaintiff also alleges that Defendants paid illegal
kickbacks, disguised as rebates and discount payments to
specialty pharmacies in exchange for recommendations that
patients take Tasigna and hid reports of adverse reactions in
clinical studies of patients taking Tasigna. (Id. at
¶¶ 17, 18.)
Plaintiffs
allege that Tasigna causes several dangerous adverse
conditions, as relevant here, several forms of severe,
accelerated, and irreversible atherosclerosis-related
conditions.[2] (Id at ¶ 19.) These
conditions include peripheral arterial occlusive disease,
coronary atherosclerosis, and cerebral atherosclerosis which
are life threatening and can lead to amputations, heart
attacks, strokes, and death. (Id.) Defendants have
been aware of the risk of these atherosclerosis-related
conditions since at least 2011 from multiple medical studies
and reports linking Tasigna to the conditions, the higher
rate of severe atherosclerosis-related conditions occurring
among patients in a randomized clinical trial, and
information gathered from a safety database reporting
hundreds of incidents after taking Tasigna. (Id at
¶ 20.)
A
Canadian health agency investigated the risks of Tasigna; and
in April 2013, Defendants issued an advisory to Canadian
health care professionals and the Canadian public of the
risks of atherosclerosis associated with taking Tasigna.
(Id at ¶ 21.) Around this same time, Defendants
updated the document used by Canadian health care
professionals when prescribing medication to warn of the
risks of atherosclerosis. (Id at ΒΆ 22.)
Although Defendants provided warnings to physicians and
patients in Canada, Defendants did not warn physicians and
patients ...