MEMORANDUM OPINION
I. INTRODUCTION
Pennsylvania Turnpike Commission and Indiana Carpenters Welfare Fund (collectively, “Plaintiffs”) bring this putative class action suit alleging that off-label prescription payments made by Plaintiffs to Defendant Cephalon, Inc. (“Cephalon”) were excessive and constituted unjust enrichment. Plaintiffs are entities, called third party payors (“TPPs”), that are responsible for paying all or part of the costs of prescriptions for their members, employees, plan participants, beneficiaries, or insureds (“beneficiaries”). Ce-phalon is a Delaware corporation with its principal place of business in Frazer, Pennsylvania that is engaged in the business of manufacturing, selling, and distributing pharmaceutical drugs. Plaintiffs claim that Ce-phalon engaged in unlawful off-label marketing of Actiq, a drug approved by the U.S. Food and Drug Administration (“FDA”) to manage breakthrough cancer pain in patients who are already receiving, and are tolerant to, opioid therapy. Plaintiffs argue that Ce-phalon’s conduct caused Plaintiffs to make excessive off-label prescription payments for Actiq to treat conditions not approved by the FDA and for whom less expensive pain management drugs were appropriate and less dangerous. This Court exercises jurisdiction over this matter pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d), because the amount in controversy exceeds $5,000,000 and at least one Plaintiff resides outside of Pennsylvania.
Presently before the Court is Plaintiffs’ Motion for Class Certification. Plaintiffs seek certification of a class action under Fed. R.Civ.P. 23(a) and (b)(3) to recover economic damages for unjust enrichment. Cephalon vigorously opposes certification. Its primary contention is that Plaintiffs’ claim is not fit for class treatment under Rule 23 because of the individualized inquiry required to prove the elements of unjust enrichment. Cephal-on asserts that no common questions of fact exist, individualized factual issues will predominate, and the action would be unmanageable if certified.
II. THE PROPOSED CLASS
Plaintiffs move for certification of one Nationwide Class defined as follows:
All Third Party Payors (“TPP”) in the United States who paid and/or reimbursed, in whole or in part, for the cost of Actiq prescribed for indications other than cancer and for consumption by their members, employees, plan participants, beneficiaries or insureds during the period from January 1, 2002 through December 31, 2006.
(Pis.’ Mem. in Supp. of Mot. for Class Cert., 1.) In the first alternative, Plaintiffs move for two multi-state Alternative Classes, defined as follows:
(1) Unjust Enrichment (Restatement) Class: All Third Party Payors (“TPP”) in the United States who paid and/or reimbursed, in whole or in part, in Arkansas, Colorado, Connecticut, the District of Columbia, Hawaii, Illinois, Indiana, Iowa, New Hampshire, New York, Oklahoma and West Virginia, for the cost of Actiq prescribed for indications other than cancer and for consumption by their members, employees, plan participants, beneficiaries or insureds during the period from January 1, 2002 through December 31, 2006.
(2) Unjust Enrichment (Appreciation) Class: All Third Party Payors (“TPP”) in the United States who paid and/or reimbursed, in whole or in part, in Alaska, California, Florida, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Missouri, Nevada, New Mexico, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington and Wisconsin, for the cost of Actiq prescribed for indications other than cancer and for consumption by their members, employees, plan participants, beneficiaries or insureds during the period from January 1, 2002 through December 31, 2006.
(Id. at 2-3.) In the second alternative, Plaintiffs move for two single-state classes to be certified under the laws of Indiana and Pennsylvania, which is where the Plaintiffs reside. (Id. at 3 n. 4.)
“Third Party Payor,” as used in the class definition, is defined as “a private or governmental entity that was or is at risk to pay all or part of the cost of Actiq, which was prescribed, provided or administered in the United States for individual members, employees, plan participants, beneficiaries or insureds of the TPP’s prescription drug or health coverage.” (Id. at 2 n. 3.) TPP is not to include: (1) Cephalon, any entity in which Cephalon has a controlling interest, and Ce-phalon’s legal representatives, predecessors, successors, assigns, and employees; (2) the U.S. Government and its agencies and departments, and all other governmental entities that made payments pursuant to any state’s Medicaid program; (3) all federal, state, or local governmental entities, except for such governmental agencies or programs that made or incurred any obligations to make a reimbursement for Actiq as part of a health benefit plan for their employees, but only with respect to such payments; (4) the Court and any judge assigned to this ease; and (5) class counsel. (Id.)
III. FACTUAL BACKGROUND
A. Regulatory Landscape for Prescription Drugs
A pharmaceutical manufacturer may distribute a prescription drug only if the drug has been approved by the Food and Drug Administration (“FDA”), the federal agency that regulates the distribution of drugs in the United States. 21 U.S.C. § 355(a). In order to obtain the FDA’s approval, a manufacturer must show that the drug is “safe for use under the conditions
For a small class of prescription drugs, the FDA will grant approval under the distribution regulations of 21 C.F.R. § 314.520 (“Subpart H”), which is reserved for drug products that are effective but carry significant safety risks. Such drugs are subject to post-marketing restrictions because the FDA has determined that the drug is safe only if its distribution and use is restricted. Id. § 314.520(a). The drug’s manufacturer is to follow a Risk Management Program (“RMP” or “RiskMAP”
B. The FDA Approved Actiq Under Subpart H
Actiq is a drug developed by Anesta Corporation, which merged with Cephalon in 2000. (Kurowski Deck Ex. 103, DeRogatis Dep. 34:13-18, Sept. 17, 2009; Pyfer Dep. 38:14-39:8.) Cephalon also acquired U.S. marketing rights to Actiq from Abbott Laboratories at that time. (Menkowitz Deck Ex. 49, Cephalon Form 10-K405, filed Mar. 30, 2001, at 31.) Actiq answered the unmet medical need for “relief of severe cancer pain not adequately controlled by other narcotic therapy.” (Leiderman Deck ¶21.) Its active ingredient is fentanyl citrate, a potent opioid painkiller many times stronger than morphine, oxycodone, or codeine. Fentanyl citrate causes respiratory depression, which carries a serious risk of death in vulnerable patients. (Id. ¶¶ 8-9; Kurowski Deck Ex. 3, Package Insert.) Actiq is packaged as a lozenge, formulated so that patients can quickly absorb a sufficient dose of fentanyl citrate through their gums to ease their pain. (Package Insert.)
In November 1998, the FDA approved Ac-tiq under Subpart H for “the management of breakthrough cancer pain
We have concluded that adequate information has now been presented to demonstrate that Actiq is safe and effective, when marketed in accordance with the terms of restricted distribution and use described in the Risk Management Program ... and as recommended in the attached final labeling.... In addition, please note that this product has been approved ONLY for the management of breakthrough cancer pain in patients with malignancies who are already receiving and who are tolerant to opioid therapy for their underlying persistent cancer pain.
(Id. at 1, 5). Under the circumscriptions of Aetiq’s approved label, off-label
Section 9.0 of the Actiq RiskMAP, entitled “Intervention,” required Cephalon to monitor prescribing patterns and to intervene when off-label usage came to the company’s attention. (Kurowski Decl. Ex. 102, 2001 Risk-MAP at 27; id. Ex. 4, 1998 RiskMAP at 26.) As to individual prescribers, if Cephalon became aware of a problem of off-label usage, the Actiq RiskMAP required Cephalon to individually notify “all identified prescribers to emphasize the approved indication and appropriate patient selection.” (2001 Risk-MAP at 27; 1998 RiskMAP at 26; see Pyfer Dep. 300:11-16 (testifying that if Cephalon “became aware of a physician prescribing off label, according to the RMP, a letter was to be sent.”).) Cephalon was also to monitor groups of prescribers:
If groups of physicians (such as a particular specialty) are identified as having prescribed Actiq inappropriately, and these prescriptions represent potential off-label usage greater than 15% of total quarterly Actiq prescriptions, Cephalon, Inc. will contact the appropriate professional society (i.e. American College of Surgeons, American Society of Anesthesiologists). This letter will outline prescribing concerns and offer to implement an educational program in conjunction with the professional society in a national setting.
Prescribing patterns will be monitored for the physician groups in question and should the level continue to exceed 15% of total Actiq prescriptions for two additional quarters, an aggressive educational program will be initiated by mail clearly warning of the potential liabilities of prescribing Actiq to inappropriate patient populations.
(2001 RiskMAP at 27.)
C. Cephalon Launched a New Marketing Strategy for Actiq
In February 2001, when Cephalon acquired U.S. marketing rights for Actiq, it “repositioned” and “relaunched” Actiq. Pri- or to the relaunch, “the marketing directive had been to target oncologists, hematologists and pain specialists, with the emphasis being placed on oncology.” (Kurowski Decl. Ex. 104, Actiq 2002 Marketing Plan at 8.) Cephal-on’s strategy was to shift the target market from oncologists to other physicians.
In addition to targeting more physicians, Cephalon’s campaign also focused on breakthrough pain (“BTP”) instead of breakthrough cancer pain.
Cephalon paid third party medical marketing firms and physicians to help promote Actiq. The marketing firms hosted seminars and events for doctors and Cephalon paid physicians to speak favorably about Actiq at medical education programs.
Another element of Cephalon’s marketing plan was to ensure reimbursement and insurance coverage for Actiq prescriptions. In 2000, Cephalon launched Actiq “under the radar” of managed care by not aggressively promoting or discounting the product. (Ku-rowski Decl. Ex. 108, Actiq “Master Plan” at 18.) It created a reimbursement assistance program designed to help patients obtain insurance coverage for Actiq. (Id. at 18-19; see also Menkowitz Decl. Ex. 42, 2006 Activity Report for the Actiq Reimbursement Hotline at CEP-TPP11199605-06 (reporting that, for the month of September 2006, 93% of researched cases and all prior authorization requests coming through the reimbursement hotline were for conditions other than BTCP).) Cephalon’s healthcare systems department worked with managed care organizations, TPPs, and pharmacy benefit managers to maximize reimbursement or coverage for products like Actiq. (Menkowitz Decl. Ex. 38, Caminiti Dep. 8:13-9:18, Dec. 16, 2009.) By 2005, Cephalon reported that managed care organizations had increased restrictive measures on the reimbursement of Actiq, but “managed care has, for the most part, been relatively unsuccessful at slowing or stopping ACTIQ[.]” (Kurowski Decl. Ex. 107, Actiq 2005 Marketing Plan at 33.)
Since Cephalon’s marketing “relaunch” of Actiq, sales grew significantly. U.S. sales revenue grew from $15 million in 2000 to $550 million in 2006. (Menkowitz Decl. Ex. 49, Cephalon Forml0-K, filed Mar. 30, 2001, at 45; id. Ex. 54, Cephalon Form 10-K, filed Feb. 28, 2007, at 48.)
D. Cephalon’s Internal Audit Revealed Non-Compliance with the Actiq RiskMAP
In March 2003, Cephalon tasked an internal compliance auditor, David Brennan, with conducting an audit of the Actiq RiskMAP. (Kurowski Decl. Ex. 101, Brennan Dep. 13:18-14:16; id. Ex. 157, RMP Audit Plan.) Regarding off-label usage, the audit plan sought to “verify that individual prescribing patterns are monitored,” and, for groups of preseribers, to “verify that potential off-label use is evaluated” and “verify that potential off-label use does not exceed 15%.” (RMP Audit Plan at CEP_TPP_BREN00000411.) Upon completion of the audit, Brennan con-
Cephalon responded to Brennan’s audit by internal memorandum, explaining that standard operating procedure was to report inappropriate prescription levels only if prescriptions from any single inappropriate specialty exceeded 15% of total prescriptions. (Ku-rowski Deck Ex. 161, Internal Mem., Mar. 22, 2004, at CEP_TPP_EDPA10170966; id. Ex. 162, SOP-0426-J02 at 3; see also Brennan Dep. 133:8-23.) Cephalon had identified 192 different specialty groups with no single specialty accounting for more than 20% of total Actiq prescriptions. (Kurowski Deck Ex. 164, E-mail from Michael Richardson to Carol Marehione, et ah (May 13, 2004,19:03 EST).) Thus, according to its measures, Ce-phalon did not need to implement any intervention because no inappropriate specialty accounted for more than 15% of Actiq’s total quarterly prescriptions. (Internal Mem., Mar. 22, 2004 at CEP_TPP_EDPA10170966.)
E. Third Party Payors Paid for Actiq Prescriptions
Meanwhile, during the proposed class period, doctors and other health care providers wrote prescriptions for patients whom they felt would benefit from Actiq, including Plaintiffs’ beneficiaries.
Prescribing physicians had varied exposure to Cephalon’s marketing of Actiq: many were visited and detailed by Cephalon sales
Once prescriptions were written, TPPs were often responsible for paying all or part of the costs of Actiq for their beneficiaries. Plaintiff Indiana Carpenters Welfare Fund (“ICWF”), a TPP, is a welfare fund that provides health insurance benefits to its union members. (Am. Compl. ¶ 11.) During the proposed class period, ICWF paid for fifty-one Actiq prescriptions for seven beneficiaries, for a total of $170,342.27. (Kurowski Decl. Ex. 169, Newman Dep. 50:24-51:13, Mar. 26, 2010; id. Ex. 170, ICWF Payments.) ICWF worked with third party administrators including pharmacy benefit managers (“PBMs”), which handled the administration of prescription drug claims for ICWF members. (See Newman Dep. 62:19-64:23 (describing ICWF’s relationship with Zenith, a third party administrator, and various PBMs).) With its first PBM, Rx America, ICWF had a formulary
Plaintiff Pennsylvania Turnpike Commission (“PTC”), a self-insured employer that provides group medical benefits, also paid for Actiq prescriptions as a TPP. (Am. Compl. ¶ 12.) During the proposed class period, PTC paid $153,823.10 for 179 Actiq prescriptions. (Kurowski Decl. Ex. 172, Pa. Turnpike Claims.) Like ICWF, PTC worked with multiple PBMs during the proposed class period to administer prescription drug claims. (Menkowitz Decl. Ex. 5, Schlegel Dep. 91:8-92:4, 226:6-10, Jan. 12, 2010.) As a product of union negotiations, PTC had its PBMs use an open formulary, which meant that all prescription drug costs were reimbursed under PTC’s insurance coverage. (Schlegel Dep. 41:20-42:9, 109:17-23.) Though PTC eliminated certain drug classes from coverage, it never considered striking specific drugs. (Schlegel Dep. 116:3-17, 119:9-16.) It did, however, impose a step therapy restriction on Actiq in 2003. (Schle-gel Dep. 97:23-98:19, 177:18-178:10.) And in 2008, on recommendation by its PBM, Aetna, PTC began requiring prior authorization for reimbursement on Actiq prescriptions. (Schlegel Dep. 230:20-231:21.)
F. Cephalon Pleaded Guilty to Off-Label Promotion of Actiq
At least as early as September 2004, the Office of the United States Attorney for the Eastern District of Pennsylvania was conducting an investigation into Cephalon’s distribution of multiple prescriptions drugs including Actiq. (Joint Notice of Record Supplements, Ex. C, Cephalon Form 10-K, filed Mar. 13, 2006, at 111.) As a result, in September 2008, Cephalon agreed to plead guilty to the charge that it introduced “into interstate commerce ... drugs that were misbranded through off-label promotion, ... arising from Cephalon’s off-label promotion of its drugs Provigil, Gabitril, and Actiq between January 2001 and October 1, 2001.” (Kurowski Decl. Ex. 1, Guilty Plea Agreement ¶ 1.) In the plea agreement, Cephalon stipulated to the following:
Between January 2001 and October 1, 2001, Cephalon promoted Actiq for uses not approved by the FDA, including non-cancer pain uses, such as injuries and migraines. Cephalon’s promotion of Actiq for these additional intended uses violated 21 U.S.C. § 352(f)(1), because Actiq’s labeling did not bear adequate directions for each of the drug’s intended uses ... Between 2001[sic] through October 1, 2001, Cephalon profited by misbranding Provigil, Gabitril and Actiq, and distributing these drugs in interstate commerce.
(Id. ¶ 6(A)(8)-(9).) While the government contended “that, as a matter of relevant conduct, the conduct which forms the basis for this plea agreement ... continued past October 1, 2001,” for purposes of the plea agreement, Cephalon did not admit that its conduct extended past this date. (Id. ¶ 6(B).)
IV. PROCEDURAL BACKGROUND
On October 25, 2007, Employers Mutual Casualty Company, EMCASCO Insurance Company, and Union Insurance Company (collectively, “EMC Insurance Companies”) filed a Class Action Complaint against Defendant Cephalon, Inc. (“Cephalon”) containing two counts: (1) violations of state consumer protection laws and (2) unjust enrichment. On April 24, 2008, the Court consolidated this action with two others filed against Cephalon by the Indiana Carpenters Welfare Fund (“ICWF”) and the Pennsylvania Turnpike Commission (“PTC”). See Indiana Carpenters Welfare Fund v. Cephalon, Inc., Civ. No. 07-4775 (E.D.Pa.); Pa. Turnpike Comm’n v. Cephalon, Inc., Civ. No. 07-5284 (E.D.Pa.). On May 19, 2008, Plaintiffs EMC Insurance Companies, ICWF, and PTC filed a First Amended Class Action Complaint, alleging two additional counts for violations of the Racketeer Influenced Corrupt Organizations Act, 18 U.S.C. § 1962 (“RICO”). Cephalon filed its Answer on June 30, 2008.
V. LEGAL STANDARD FOR CLASS CERTIFICATION
“The class action is ‘an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.’ ” Comcast Corp. v. Behrend, — U.S. -,
The plaintiffs must also show that the proposed class action fits into one of the three categories of class actions listed in Rule 23(b). Here, Plaintiffs seek damages under Rule 23(b)(3), which provides that an action may be maintained only if “the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” The requirements of Rule 23(b)(3) are known as predominance and superiority. In re Hydrogen Peroxide,
A decision to certify a class requires “findings by the court, not merely a ‘threshold showing’ by a party, that each requirement of Rule 23 is met.” In re Hydrogen Peroxide,
VI. DISCUSSION
Plaintiffs move for class certification on a claim of unjust enrichment against Cephalon. This Court will engage in a class certification inquiry after deciding the threshold issue of a conflict of laws.
A. Conflict of Laws
Because choice of law is relevant to a determination under Rule 23, the Court must determine what law applies to Plaintiffs’ claim of unjust enrichment.
In Pennsylvania, a conflict of laws analysis is two-step. The first is to determine if there is an actual conflict among the potentially applicable laws. Hammersmith v. TIG Ins. Co.,
The Court begins with a determination of whether an actual conflict exists among the unjust enrichment laws of the fifty states. It is presumed that putative class members will reside in every state, so the law of each is potentially applicable. In
Here, Cephalon has presented several bases upon which states’ laws purportedly conflict. For example, states apply various statutes of limitations to unjust enrichment claims. See, e.g., Vichi v. Koninklijke Philips Elecs. N.V., Civ. Action No. 2578-VCP,
States also vary in how the applicable statute of limitations starts to accrue. See, e.g., Stratton v. Am. Med. Sec., Inc., No. CV-07-1491-PHX-SMM,
These differences mean that Plaintiffs’ claim for unjust enrichment can withstand a statute of limitations defense in some jurisdictions but not in others depending on the applicable law. A statute of limitations evidences a state’s policy interest in preventing litigation of delayed claims and preventing injustice by affording a defendant a fair opportunity to defend. Those states with shorter statutes of limitations have a greater interest in “promoting repose by giving security and stability to human affairs.” Hadidi v. Intracoastal Land Sales, Inc., Civ. Action No. 4:12-cv-535-RBH,
The Court now proceeds to the second step of its conflicts analysis to determine which state has the greatest interest in the application of its law. Courts engaging in a deeper analysis of true conflicts is to undertake “a combination of the approaches of both [the] Restatement II (contacts establishing significant relationships) and ‘interests analysis’ (qualitative appraisal of the relevant States’ policies with respect to the controversy).” Hammersmith,
The Court finds that the first factor weighs in favor of applying the law of putative class members’ home states because the parties’ relationship was centered there. Certainly, much of Cephalon’s activities such as conducting market research, designing marketing plans, and making managerial decisions took place in Pennsylvania. The crux of the parties’ relationship, however, was in the TPPs’ home states because that is where Cephalon directed its sales efforts, where doctors made their prescribing decisions, where TPPs’ beneficiaries transacted for Actiq, and where TPPs conferred payments to Cephalon for Actiq prescriptions. The second factor weighs in favor of applying Pennsylvania law because Cephalon received Actiq payments here. This is balanced by the third factor because, as mentioned, payments for Actiq prescriptions originated in TPPs’ home states. The fourth factor weighs slightly in favor of applying Pennsylvania law. Since it is likely that class members will reside in all U.S. jurisdictions, no single state has a greater relationship to the case than any other by virtue of its ties to a TPP. Pennsylvania, however, being the home of PTC, other TPPs, and Cephalon, is connected to both sides of the dispute. Finally, the fifth factor weighs in favor of TPPs’ home states because the Actiq lozenges purchased by beneficiaries were located in those states. In sum, three of the five factors weigh in favor of applying the laws of TPPs’ various home states, including the first factor, which is often given the greatest weight. See Restatement (Second) of Conflict of Laws § 221 cmt. d.
Policy considerations also lead to the same conclusion. Plaintiffs’ home states have a regulatory interest in providing redress to its citizens for acts of wrongdoing. As discussed, a state with a shorter statute of limitations for unjust enrichment claims values stability over providing redress for stale claims. To apply Pennsylvania law, with a four-year statute of limitations, would impede on the interests of states with either shorter or longer statutes of limitations. TPPs’ home states also have an interest in ensuring that corporations conducting business within their borders are doing so fairly. These interests outweigh Pennsylvania’s interest in regulating a resident corporation. Cf. Rapp v. Green Tree Servicing, LLC,
B. Rule 23(b)(3) Requirements
The Court now proceeds with its analysis for class certification under Rule 23. Plaintiffs must satisfy the requirements of both Rule 23(a) and (b) and failure to meet either part will defeat class certification. This Court begins by evaluating the predominance and superiority requirements of Rule 23(b)(3) and notes that doing so is not to adjudicate the case, but to determine the most suitable method for adjudication. See Amgen Inc.,
1. Predominance
Under Rule 23(b)(3), the court must find “that the questions of law or fact common to class members predominate over any questions affecting only individual members[.]” The focus of a Rule 23(b)(3) predominance inquiry is “whether proposed classes are sufficiently cohesive to warrant adjudication by representation.” Amchem Prods., Inc.,
The elements of Plaintiffs’ unjust enrichment claim cannot be succinctly identified because, as discussed, the law of each TPP’s home state will govern. For example, some states require five elements to prove a claim of unjust enrichment while others require three or four. Compare Nat’l Credit Union Admin. v. Shel-Tec Ltd., LLC, No. CV-12-02500-PHX-NVW,
Variations in the law, however, do not conclusively foreclose class certification if grouping is possible. See In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions,
Plaintiffs contend that common issues of law predominate for an Unjust Enrichment (Restatement) Class and an Unjust Enrichment (Appreciation) Class, respectively. They have provided a comprehensive chart demonstrating how the fifty states and Washington, D.C. are grouped based on their treatment of unjust enrichment claims. (See Pis.’ Mem. in Supp. of Mot. for Class Cert., 27-30.) Plaintiffs have identified which states have adopted one of four definitions of unjust enrichment: (1) eighteen jurisdictions follow the Restatement (First) of Restitution’s definition of unjust enrichment; (2) twenty-seven jurisdictions follow the Restatement (First) of Restitution’s definition of unjust enrichment with the additional element that the defendant appreciate, realize, or know of the plaintiffs conferral of a benefit; (3) four jurisdictions require a direct connection between the impoverishment of a plaintiff and the enrichment of a defendant; and (4) two jurisdictions require that a plaintiff prove that a defendant had reasonable notice that the plaintiff would expect payment for the benefit conferred. (Id. at 28.) The first two groupings are those which Plaintiffs propose as multi-state classes.
Plaintiffs’ notable grouping efforts, however, still do not account for individual fact issues such that common issues predominate. “The polestar of the unjust enrichment inquiry is whether the defendant has been unjustly enriched!.]” Limbach Co., LLC v. City of Philo.,
Not as easy is Plaintiffs class-wide showing of whether Cephalon’s enrichment was unjust. Under an unjust enrichment theory, all facts and circumstances are considered to determine whether, without a remedy, inequity would result or persist. See Vega v. T-Mobile USA, Inc.,
Plaintiffs have not shown, however, how proving Cephalon’s non-compliance with the RiskMAP by common evidence also proves that all payments for off-label prescriptions beyond 15% of total quarterly Actiq prescriptions are unjust.
Further, Plaintiffs made their own decisions regarding coverage for Actiq prescriptions, which must be considered in assessing equitable circumstances. The parties dispute the extent to which TPPs varied their administration of prescription drug benefits. Ce-phalon’s expert, Dr. David Bradford,
The Court finds that Dr. Bradford’s opinion is more firmly supported by the record than Dr. McGuire’s. Cephalon records and employee testimony show that TPPs treated claims for Actiq reimbursement differently throughout the proposed class period. (See Menkowitz Deck Exs. 128-29, 2003-2004 Formulary Grid Sheets and Summaries; id. Ex. 140, Caminiti Dep. 156:17-23, 157:14-24 (regarding prior authorization procedures, testifying, “As I said, it’s a giant quagmire of different issues because every plan makes their own determination”).) Though Actiq was regularly reimbursed by TPPs, it is still relevant to consider how TPPs varied, or could have varied, their coverage decisions. For example, those TPPs who approved payment after completing patient-specific prior authorization procedures cannot then claim that their payment resulted from inequity. Indeed, the record reflects that Plaintiffs eventually did, at various times, adopt practices to reduce or eliminate Actiq payments.
In sum, whether TPPs’ payments for Actiq prescriptions resulted in unjust enrichment is a question resolved by examination into the actions not only of Cephalon, but also of individual TPPs and prescribing doctors.
In their arguments, Plaintiffs liken this case to In re Pa. Baycol Third-Party Payor Litigation, in which the Pennsylvania Court of Common Pleas certified a class of TPPs on their unjust enrichment claim based on pre
Further, Baycol is factually distinguishable in that the defendant drug manufacturer voluntarily stopped selling Baycol and advised all patients to cease use of the drug immediately. The defendant refunded co-pay costs of unused Baycol to individual patients, but not to TPPs who paid for the same unused Baycol. In re Pa. Baycol,
2. Superiority
The second inquiry under Rule 23(b)(3) is whether “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” A court’s consideration of superiority requires a “balance, in terms of fairness and efficiency, [of] the merits of a class action against those of ‘alternative available methods’ of adjudication.” Georgine v. Amchem Prods., Inc.,
The Court considers the factors enumerated in Rule 23(b)(3) for determining superiority:
(A) the class members’ interests in individually controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
Here, the largest impediment to a finding of superiority is the difficulty of managing a class action in which the laws of TPPs’ various home states apply and individual questions of fact predominate. See Powers,
Plaintiffs’ failure to satisfy the criteria of Rule 23(b)(3) is dispositive in this Court’s decision regarding class certification. This Court therefore declines to engage in further analysis under Rule 23(a).
VII. CONCLUSION
For the reasons explained herein, the Court concludes that this putative class action does not meet the predominance and superiority requirements of Rule 23(b)(3). Accordingly, Plaintiffs’ Motion for Class Certification is DENIED. An appropriate order follows.
ORDER
AND NOW, this 23rd day of March, 2015, upon consideration of Plaintiffs Indiana Carpenters Welfare Fund and Pennsylvania Turnpike Commission’s Motion for Class Certification (Doc. 339), Defendant Cephalon Inc.’s Response in Opposition (Doc. 370), Plaintiffs’ Reply in Support of Motion for Class Certification (Does. 401, 402), parties’ arguments and accompanying materials submitted at a Class Certification Hearing on July 24, 2013, and for the reasons set forth in this Court’s Memorandum Opinion dated March 23, 2015, IT IS HEREBY ORDERED AND DECREED that Plaintiffs’ Motion is DENIED.
Notes
. This factual summary is compiled from the following documents: Amended Class Action Complaint (Doc. 22); Plaintiffs’ Proffer of Facts in Support of Plaintiffs' Motion for Class Certification (Doc. 347); Declaration of Deborah B. Leiderman, M.D. (Doc. 343); Defendant’s Response and Counter-Statement to Plaintiffs’ Proffer of Facts in Support of Plaintiffs' Motion for Class Certification (Doc. 376); Plaintiffs’ Rebuttal Proffer of Facts (Doc. 396); and Parties' Joint Notice of Record Supplements (Doc. 415). Plaintiffs' exhibits shall be in reference to the Kurowski Declaration; Cephalon’s exhibits shall be in reference to the Menkowitz Declaration.
. These terms applied during the proposed class period. The current terminology used by the FDA is Risk Evaluation and Mitigation Strategies ("REMS”). See Food and Drug Administration Amendments Act of 2007, 21 U.S.C. § 355-1.
. Breakthrough pain is a "transitory flare of pain that occurs on a background of otherwise stable, persistent pain in patients receiving chronic opioid therapy.” (Kurowski Deck Ex. 104, Actiq 2002 Marketing Plan, at 22.)
"Off-label" refers to the use of an approved drug for any purpose, or in any manner, other than what is described on the drug’s labeling. Such uses include treating a condition not indicated on the label, treating the indicated condition at a different dose or frequency than specified on the label, or treating a different patient
. Actiq’s approved label reads:
PHYSICIANS AND OTHER HEALTHCARE PROVIDERS MUST BECOME FAMILIAR WITH THE IMPORTANT WARNINGS IN THIS LABEL.
Actiq is indicated only for the management of breakthrough cancer pain in patients with malignancies who are already receiving and who are tolerant to opioid therapy for their underlying persistent cancer pain. Patients considered opioid tolerant are those who are taking at least 60 mg morphine/day, 50 meg transdermal fentanyl/hour, or an equianalgesic dose of another opioid for a week or longer.
Because life-threatening hypoventilation could occur at any dose in patients not taking chronic opiates, Actiq is contraindicated in the management of acute or postoperative pain. This product must not be used in opioid non-tolerant patients.
Actiq is intended to be used only in the care of cancer patients and only by oncologists and pain specialists who are knowledgeable of and skilled in the use of Schedule II opioids to treat cancer pain....
CONTRAINDICATIONS
Because life-threatening hypoventilation could occur at any dose in patients not taking chronic opiates, Actiq is contraindicated in the management of acute or postoperative pain. The risk of respiratory depression begins to increase with fentanyl plasma levels of 2.0 ng/mL in opioid non-tolerant individuals ... This product must not be used in opioid non-tolerant patients.
(Package Insert).
. See Kurowski Decl. Ex. 105, E-mail from Nancy Shanfelt to Cephalon Sales Representatives (May 19, 2004, 16:11 EST) (regarding 2004 Actiq marketing targets, the Actiq Sales and Marketing Team noted that “over 7,000 new physicians” would be added to Cephalon's sales targets with a specialty breakdown of new targets being: "Anes/Pain-13%,” "Oncology-11%,” “PCP-60%,” "Neuro-3%,” "Psych-1%," and "Other-12%.”); cf. 2001 RiskMAP at 16 ("The target physician audience for Actiq is a group of approximately 5,000 oncologists and pain specialists, their nurses, and office staff.”).
. See also Kurowski Deck Ex. 114, Makalusky Dep. 26:10-25, Jan. 7, 2010 (testifying that neurologists and pain care specialists "had the largest amount of narcotic prescriptions and the lowest use of Actiq,” and that such physicians were the "target class” that sales representatives were "supposed to sell to.”).
. In addition to the above quoted language, Plaintiffs direct the Court’s attention to other excerpts from the Actiq 2002 Marketing Plan allegedly confirming Cephalon's decision to promote Actiq off-label. See Actiq 2002 Marketing Plan at 8 (discussing 2001 survey results confirming that APMs accounted for the vast majority of Actiq prescriptions and concluding that "anesthesiologists/pain specialists are more productive prescribers"); id. at 11 ("While oncologists obviously use ACTIQ to treat BTCP, the participating APMs cited ACTIQ usage in the following disease states illustrating a wide spectrum of application and opportunity”); id. at 24 ("Additionally, due to ACTIQ’s rapid onset, it has a clear and distinct advantage over other products in the treatment of episodic or recurrent pain (e.g., sickle cell crisis, migraine headaches). This type of pain represents a substantial market opportunity.”); id. at 43 ("The targeted patient populations will be both cancer patients and chronic non-malignant patients, as well as patients suffering from episodic pain such as migraine headaches and sickle cell disease.”). Plaintiffs also point to presentations made within Cephalon to promote Actiq for treating conditions other than BTCP. See Kurowski Deck Ex. 117, "Headache, Mid-Atlantic POA, June 5 & 6, 2002” at CEP_TPP 10026885 (directing sales representatives to discuss the use of Actiq for managing "episodic” headaches or "intractable or status migraines”); id. Ex. 118, “Use of Actiq in Procedures/Other, Mid-Atlantic POA, June 5-6, 2002” at CEP-TPP 10026890-91 (indicating that Actiq could be used for minor surgeries, bone marrow biopsies, post-operative pain, and wound dressing changes); id. Ex. 119, "Fibro-myalgia Syndrome" at CEP-TPP 10026929 ("Although most authorities on FMS [fibromyalgia syndrome] treatment believe opioid analgesics and cortisone are ineffective and should be avoided, some favor considering them for occasional rescue doses when pain of ‘flares’ cannot be controlled by other means.”); id. Ex. 120, "Osteoarthritis and DJD” at CEP-TPP 10026904, 09-10 (touting Actiq's fitness for treating osteoarthritis and degenerative joint disease because it provides "physical therapy pain reduction,” "control of morning stiffness pain” and "[s]pine surgeons (dedicated) are usually few in numbers making targeting easier”). Years later, Cephalon reported that approximately 48% and 25% of Actiq patients had underlying conditions of back pain and headaches, respectively, and only 6% of Actiq patients had cancer. Id. Ex. 196, 2006 Actiq Marketing Sales Training, Dec. 13, 2005, at CEP-TPP10043547.
. Plaintiffs also allege that Cephalon paid physicians to publish journal articles and letters to the editor about the use of Actiq for treating pain not related to cancer. See Kurowski Deck Ex. 152, "Actiq Publication Project Monthly Status Update,” Aug. 2, 2004 (listing publications with topics including a comparison of oral transmucosal fentanyl citrate ("OTFC”) and morphine and the use of OTFC for migraine headaches and musculoskeletal pain); id. Ex. 153, “Active Actiq Publication Projects” (listing publications with topics including sickle cell, migraine, and fibromyalgia as well as cancer).
. See also Kurowski Decl. Ex. 128, "2004 Actiq Marketing Regional Managers Meetings” at CEP_TPP_CTAG 10048313 (listing topics for CME lectures to include management of chronic pain, breakthrough pain, musculoskeletal pain, neuropathic pain, migraines, and substance abuse); Makalusky Dep. 39:4-17 (testifying that during conferences, physicians who received honorariums from Cephalon did not promote or discuss Actiq's on-label indication); id. Dep. 41:9-11 ("We were instructed to talk to physicians about their use of Actiq and their success stories to other doctors, which was always off-label, yes.”); see also Kurowski Decl. Ex. 137, Transcript of "Managing Chronic Pain with Opioids: A Consensus Meeting” at 82 (discussing, at a consensus meeting hosted by a third party contracted by Cephalon, various forms of pain management, including a comment by a paid physician panelist, "One of the way [sic] I use ACTIQ, which has been great in my practice, is migraine patients because they are not really tolerant to opioids, most of them and I notice, I keep track of them, they trip [sic] to the emergency room has decreased drastically with AC-TIQ.”)
. Defendant avers that each health care provider who prescribed Actiq off-lahel did so based on his or her independent medical judgment. As support, Defendant offers deposition testimony from nine doctors and one nurse practitioner, all of whom prescribed Actiq for one of Plaintiffs’ beneficiaries, to show that each considered a variety of factors in making their prescribing decisions. Menkowitz Deck Ex. 8, Magill Dep. 22:3-24:23, Jan. 26, 2013; id. Ex. 9, Hartman Dep. 21:17-19, 68:3-9, 230:20-24, Jan. 25, 2013; id. Ex. 10, Mueller Dep. 26:13-27:23, Jan. 17, 2013; id. Ex. 11, Stoner Dep. 23:4—9, Mar. 6, 2013; id. Ex. 12, Cozza Dep. 25:15-26:20, Mar. 5, 2013; id. Ex. 13, Swonder Dep. 56:17-21, Jan. 29, 2013; id. Ex. 14, Washington Dep. 25:3-26:25, Jan. 28, 2013; id. Ex. 15, Tuley Dep. 25:24-28:18, Jan. 23, 2013; id. Ex. 16, Eoff Dep. 216:13-17, Feb. 25, 2013; id. Ex. 17, Green-Mack Dep. 39:3-5, 112:19-114:2, Mar. 4, 2013. All also testified that Cephalon’s activities had no influence whatsoever on whether or not to prescribe Actiq. Magill Dep. 61:17-20, 153:6-10; Hartman Dep. 40:12-19, 216:18-218:16; Mueller Dep. 41:17-19, 44:7-11, 163:23-165:18; Stoner Dep. 74:2-12, 202:20-23; Cozza Dep. 48:22-49:6; Swonder Dep. 27:5-10, 39:8-11; Washington Dep. 27:1-28:23; Tuley Dep. 39:20-41:15, 59:7-23; Eoff Dep. 207:18-208:15; Green-Mack Dep. 108:25-109:7.
. See Magill Dep. 29:6-8, 32:8-20 (migraine headaches); Hartman Dep. 30:8-12 (sinus, neck, back, and knee problems), 31:11-13 (headaches); Mueller Dep. 40:23-41:3 (chronic headaches); Stoner Dep. 57:21-59:9 (knee surgery pain); Cozza Dep. 46:21-47:16 (severe foot pain); Swonder Dep. 17:19-22 (liver and bone marrow biopsies), 21:8-10 (non-opioid tolerant patients); Washington Dep. 41:11-14 (cutaneous lesions); Tuley Dep. 38:2039:11 (back pain); Eoff Dep. 38:1-8 (headaches), 68:14-16 (back and knee pain). One doctor, however, testified that he would never use Actiq for non-cancer related headaches or migraines. Washington Dep. 118:21-24.
. See Magill Dep. 54:24-55:4; Stoner Dep. 62:3-21; Cozza Dep. 50:20-51:9; Swonder Dep. 27:20-25; Washington Dep. 69:2-6; Tuley Dep. 47:16-48:1, 60:10-12; Eoff Dep. 43:3-7, 49:1-6, 59:19-20; Green-Mack Dep. 38:22-39:2, 81:19-22.
. See Magill Dep. 17:22-18:23 (met with Ce-phalon representative and physician speaker); Hartman Dep. 50:12-15 (Cephalon representatives were in contact "throughout [physician's] career”); Mueller Dep. 146:21-147:22 (noting 34 visits from a Cephalon representative, 17 for which the representative brought lunch or dinner); Cozza Dep. 75:3-10 ("I do know that representatives came and talked about Actiq.”); Swonder Dep. 36:12-37:5 (failing to recall any detail visits from a Cephalon representative); Tu-ley Dep. 141:6-9 (stating that the content of interactions with Cephalon sales representatives varied depending on who the representative was and when the detail occurred); Eoff Dep. 83:22-85:12, Green-Mack Dep. 106:2-17 (describing visits to Dr. Green-Mack’s office from three different Cephalon representatives).
. Compare Mueller Dep. 176:7-18 (attending a Cephalon-sponsored meeting for Actiq), and Stoner Dep. 142:18-143:12 (attending a consultant meeting with Cephalon in San Francisco), and Eoff Dep. 94:7-95:11 (attending three or four Cephalon-sponsored conferences, one of which involved Actiq), with Swonder Dep. 27:11-16 (never attending a Cephalon-sponsored or continuing medical education program concerning Actiq), and Washington Dep. 28:14-20 (same), and Tuley Dep. 58:16-20 (same).
. See Hartman Dep. 89:12-15, 90:8-11; Mueller Dep. 44:12-17, 83:16-20; Stoner Dep. 107:1-11, 149:3-7; Green-Mack Dep. 150:22-25; see also Kurowski Decl. Ex. 178, Actiq National Speaker Training (listing Mary Jo Eoff as a participant at an Actiq speaker training session).
. Hartman Dep. 50:16-53:10; Stoner Dep. 84:16-87:18; Green-Mack Dep. 110:3-111:24, Mar. 4, 2013; see Menkowitz Decl. Ex. 121, Actiq Off-Label Prescribers; id. Ex. 28, Actiq RMP Letter.
. PBMs and managed care organizations use formularies, which are lists of specific drugs for coverage, in administering a prescription drug benefits plan. (Menkowitz Decl. Ex. 23, Bradford Report ¶ 34.) Pharmacy and Therapeutics (“P & T”) Committees, comprised of independent physicians, pharmacists, and health care professionals, develop formularies. (Id. ¶ 38.) Formu-laries can be open (all drugs are covered to some degree), incented (some drugs have financial incentives for prescription), or closed (prior authorization is required for non-listed drugs). (Id. ¶ 34.) Formularies may also be tiered such that co-payment amounts vary across tiers. (Id. ¶ 36.)
. Prior authorization is the pre-approval of a drug by a benefits administrator before a pharmacy can dispense it to a beneficiary. The authorization process typically asks the prescribing physician about a patient’s diagnostic tests, symptoms, and other clinical measures to establish the propriety of the drug. Prior authorization is intended to lower costs and ensure appropriate drug utilization. (Menkowitz Decl. Ex. 39, Iz, Peri, Study of Pharmaceutical Benefit Management 81-82 (2001).)
. Step therapy is a restrictive measure employed by benefits administrators. It requires a patient to have tried one or more alternative medications without success before obtaining approval for a particular drug. (Bradford Report ¶ 37.)
. Other parties also appeared as Plaintiffs at various stages of this case: Iron Workers District Council Benefit Fund of Philadelphia and Vicinity (“Iron Workers”), American Federation of State, County and Municipal Employees, District Council 47 Health and Welfare Fund ("AFSCME”), and Philadelphia Firefighters Union Local No. 22 Health and Welfare Fund ("Firefighters”). On June 28, 2010, Iron Workers stipulated to dismissal of their claims in this matter. AFSCME and Firefighters remain Plaintiffs in this case, but they do not join ICWF and PTC in moving for class certification.
. Plaintiffs argue that the law-of-the-case doctrine applies in that the Court previously ruled, in denying summary judgment, that no actual conflict existed amongst the unjust enrichment laws of the fifty states. See In re Actiq Sales and Mktg. Practices Litig.,
. See, e.g., Baxter v. PNC Bank Nat’l Ass’n,
. States differ on whether a claim for unjust enrichment, based in equity, can survive when there is an adequate remedy at law available. Some states, including Pennsylvania, bar an equitable remedy for unjust enrichment when a party has an adequate remedy at law. See, e.g., Trustmark Ins. Co. v. Bank One, Ariz., NA,
Other jurisdictions, however, have conflicting case law as to whether an unjust enrichment claim may stand. Compare RC Aluminum Indus., Inc. v. Regions Bank,
. Some states require that a benefit be directly conferred by the plaintiff to the defendant for an unjust enrichment claim to stand. See, e.g., Arlandson v. Hartz Mountain Corp.,
Other states, however, do not have such a requirement. See, e.g., Thompson v. Bayer Corp., No. 4:07CV00017,
. Compare Thompson,
. Insofar as unjust enrichment is regarded as an equitable claim, states may entertain equitable defenses such as unclean hands and laches. See, e.g., Sean O'Kane A.I.A. Architect, P.C.,
. Whether that conferral must have been direct depends on the applicable state law. See discussion infra note 25.
. On a previous Daubert motion, this Court examined Plaintiffs’ assumption that payment for all off-label Actiq prescriptions in excess of 15% of total quarterly prescriptions are the inequitable result of Cephalon's allegedly unlawful marketing. In re Actiq Sales and Marketing Practices Litig., Civ. Action No. 07-4492,
. Plaintiffs’ expert, Dr. Deborah Leiderman, testified to the same:
Q: But the FDA does not prohibit a doctor from writing an off-label prescription for Actiq. Correct? ...
A: During the class period, that's correct— does not prohibit, that’s correct.
(Menkowitz Decl. Ex. 20, Leiderman Dep. 104:20-105:5, Feb. 20, 2013.)
. Dr. Bradford is the Busbee Chair of Public Policy and Professor in the Department of Public Administration and Policy at the University of Georgia. He has previously served as Director of the Center for Health Economic and Policy Studies and Professor in the Department of Health Administration and Policy at the Medical University of South Carolina. For twenty years, Dr. Bradford has conducted research in the area of health economics. (Bradford Report Ml 1-2.)
. Dr. McGuire is a Professor of Health Economics in the Department of Health Care Policy at Harvard Medical School. Over the past 35 years, he has conducted research on issues including the economics of managed care, health insurance and health care payment systems, and drug pricing and procurement. (Rebuttal Expert Report of Thomas McGuire ¶¶ 4, Doc. 398.)
. Though no longer a party here, EMC, a TPP, also had discretion to exclude particular drugs from coverage under its prescription drug insurance program. (Kurowski Deck Ex. 198, Knut-sen Dep. 221:13-24, Mar. 23, 2010.) Cephalon records indicate that other TPPs, which could be putative class members, also had concerns regarding payment for off-label Actiq prescriptions and implemented prior authorization requirements. (See Menkowitz Deck Ex. 40, National Account Manager (“NAM”) Reports.)
. In their Reply in Support of Class Certification, Plaintiffs rely on In re Neurontin Marketing and Sales Practices Litigation,