324 F. Supp. 3d 541
E.D. Pa.2018Background
- Aetna sued Insys, several executives, and physicians alleging a scheme to induce Aetna to reimburse off‑label prescriptions of Subsys (a fentanyl spray approved only for breakthrough cancer pain).
- Aetna required prior authorization for Subsys, including documented cancer diagnosis and prior trial of a preferred lozenge; Insys allegedly bypassed these via a PAD (pre‑authorization department) that communicated with insurers and used opt‑in forms and ABLs (area business liaisons).
- Plaintiffs allege Insys recruited non‑oncology prescribers into paid speaker programs, paid kickbacks, and that PAD staff impersonated office personnel and misrepresented patients as having cancer to obtain authorizations.
- Individual defendants Rowan and Lee were regional sales executives alleged to have recruited speakers and directed PAD activity; Dr. Fanto, an Arizona prescriber, was alleged to have prescribed off‑label and sent records to PAD. Aetna alleges approximately $96,000 in improper Subsys claims tied to Fanto.
- Claims: Pennsylvania insurance fraud statutes, aiding/abetting/conspiracy, civil conspiracy, common law fraud, unjust enrichment, negligent misrepresentation, and negligence. Motions to dismiss raised personal jurisdiction, federal preemption, economic‑loss doctrine, failure to plead conspiracy/malice, and a motion to strike background allegations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Dr. Fanto | Co‑conspirator contacts of Insys in PA supply jurisdiction over Fanto | Fanto lacked PA contacts; conspiracy contacts not sufficiently pleaded to impute | Dismissed for lack of personal jurisdiction (no PA‑attributable acts by Fanto) |
| Personal jurisdiction over Rowan & Lee | Their regional titles and alleged recruitment of Pennsylvania prescribers support Calder/"effects" jurisdiction and co‑conspirator theory | Titles/isolated allegations too attenuated; conspiracy not pleaded with requisite particularity | Dismissed for lack of personal jurisdiction (insufficient purposeful direction or conspiracy pleading) |
| Federal preemption (Buckman) of common‑law claims | Aetna: claims are state‑law misrepresentation claims tied to insurer duties, not attempts to enforce FDA rules | Insys: claims arise from off‑label promotion and thus are impliedly preempted as fraud‑on‑FDA type claims | Denied: claims rest on misrepresentations to Aetna and state duties, not solely on FDA regulatory duties, so Buckman preemption not applied |
| Economic‑loss doctrine | Aetna: tort claims are not barred because duties are not contractual and Bilt‑Rite limits doctrine | Insys: economic losses only; doctrine bars negligence and negligent misrepresentation | Court: doctrine applies to negligence and negligent misrepresentation — Counts VI and VII dismissed; fraud, conspiracy, and unjust enrichment survive |
| Civil conspiracy (malice element) | Aetna: Insys agents intentionally used false information to induce payments — supports malice | Insys: lawful business motive (profit) negates malice; Thompson requires sole intent to injure | Denied: at pleading stage, plausible specific intent to injure can be inferred despite profit motive; conspiracy claim survives |
| Motion to strike background allegations | Insys: opioid‑crisis and prior enforcement allegations are prejudicial, immaterial, scandalous | Aetna: background context relevant to scheme and intent | Denied without prejudice: background allegations allowed at pleading stage; may be challenged later |
Key Cases Cited
- Calder v. Jones, 465 U.S. 783 (effects test for purposeful direction in torts)
- IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254 (3d Cir. adoption of Calder analysis)
- Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341 (state claims that effectively police FDA are impliedly preempted)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard: plausible claim requirement)
- Bilt‑Rite Contractors, Inc. v. The Architectural Studio, 581 Pa. 454, 866 A.2d 270 (narrow exception to economic‑loss rule for professional negligent misrepresentation)