Opinion ID: 204019
Heading Depth: 3
Heading Rank: 1

Heading: The District Court's Approach to Liability

Text: In its order applying these standards to the evidence adduced at trial, the district court identified three salient factors on which it focused its inquiry into whether the conduct complained of was unfair or deceptive. In re Pharm., 491 F.Supp.2d at 101-02. First, the district court inquired into whether the spreads for Zoladex exceeded 30%. [21] In assessing this factor, which the district court described as the most important inquiry for purposes of finding liability, the court focused on the extent and duration of the spreads to assess whether they were egregious. Second, the district court looked to AstraZeneca's history of creating the spread. To do so, the court inquired whether the appellant took an active hand in increasing the AWP, as opposed to increasing the spread solely by offering discounts and rebates. The district court interpreted increases to the AWP as evidence of unethical conduct because raising the AWP imposed costs on the payors and patients but not on the pharmaceutical manufacturer. The district court also examined the legitimacy of the list price from which the markup is derived, attempting to distinguish between list prices at which substantial sales were made, and those that were created only to increase the AWP. And the district court interpreted evidence of AWP increases made in response to Congress's change in reimbursement rates as evidence of unethical conduct. Third, the district court looked to evidence of proactive scheme[s] to market the spread to doctors by encouraging them to purchase drugs because of their profitability [to the providers] rather than their therapeutic qualities, citing OIG Compliance Program Guidance for Pharmaceutical Manufacturers, 68 Fed.Reg. 23,731-01, 23,737 (May 5, 2003), for examples of these schemes including sales representatives promoting the spread as a reason to purchase the product. After rehearsing these three factors, the district court specifically noted that the liability inquiry would nonetheless depend on the particular circumstances of each manufacturer and each drug for each year, and that no single factor is necessarily determinative. Specific challenges to the district court's approach will be addressed below; suffice it to say here that this framework fits comfortably within the legal requirement to evaluate unfair and deceptive trade practice claims based on the circumstances of each case. Mass. Eye & Ear Infirmary, 552 F.3d at 69 ( citing Kattar, 739 N.E.2d at 257).