Court Opinion

ID: 857139
Source: CourtListenerOpinion
Date Created: 2013-04-03 19:36:43.155895+00
Date Added: 2024-06-11T12:22:10.336327
License: Public Domain

United States Court of Appeals
                        For the First Circuit

No. 11-1595

    IN RE: NEURONTIN MARKETING AND SALES PRACTICES LITIGATION

                             AETNA, INC.,

                        Plaintiff, Appellant,

                                  v.

              PFIZER, INC.; WARNER-LAMBERT COMPANY, LLC,

                        Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

              [Hon. Patti B. Saris, U.S. District Judge]

                                Before

                         Lynch, Chief Judge,
                     Souter,* Associate Justice,
                      and Lipez, Circuit Judge.

     Peter D. St. Phillip, with whom Richard W. Cohen, Gerald
Lawrence, and Lowey Dannenberg Cohen & Hart, P.C. were on brief,
for appellant.
     Mark S. Cheffo, with whom Katherine A. Armstrong and Skadden,
Arps, Slate, Meagher & Flom LLP were on brief, for appellees.

     *
       Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
April 3, 2013
           LYNCH, Chief Judge.       In Kaiser Foundation Health Plan,

Inc. v. Pfizer, Inc. (Kaiser), Nos. 11-1904, 11-2096 (1st Cir. ____

__, 2013), a related appeal in which we also issue an opinion

today, we affirmed a court and jury verdict against Pfizer, Inc.

("Pfizer"), under section 1962 of the Racketeer Influenced and

Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-68, and a state

statute, for fraudulent marketing of off-label uses of its drug

Neurontin.    The arguments presented in Kaiser and in another

related   appeal   in   which   we   issue   an   opinion   today,   Harden

Manufacturing Co. v. Pfizer, Inc., No. 11-1806 (1st Cir. ____ __,

2013), on most issues are the same as or parallel to those

presented in this appeal, which concerns the claims of Aetna, Inc.

("Aetna") against Pfizer.       Many of the arguments made by Pfizer

against Aetna in this case were rejected in Kaiser.

           This case comes to us on Aetna's appeal from a grant of

summary judgment in favor of Pfizer and against Aetna.               In the

Kaiser case, after trial, Pfizer lost.        While the trial record in

Kaiser was somewhat larger than the record here, the record on

summary judgment in this case was very similar and included much

the same expert and other evidence as to causation.

           The outcome of this case turns on whether Aetna, a health

insurer which makes claims of harm from third-party payments for

its insureds' fraudulently induced prescriptions, is so differently

situated from Kaiser that summary judgment was correctly entered

                                     -3-
against it, thus precluding it from proving its case to a jury.

The district court largely distinguished this case from Kaiser's on

the   basis      that     Kaiser      had      much     stronger        evidence   of

misrepresentations made directly to Kaiser and reliance by Kaiser

on those misrepresentations in its formulary decisions.

            We conclude that Aetna presented evidence of causation

and damages sufficient to survive summary judgment on its RICO

claim, and reverse the dismissal of this claim.                       We vacate the

district court's dismissal of Aetna's claim under the Pennsylvania

Insurance Fraud Statute (PIFS), 18 Pa. Cons. Stat. § 4117.

                                         I.

            We assume familiarity with the description of this case's

procedural history and facts set forth in Kaiser, slip op. at 3-22.

On February 1, 2005, Aetna filed a coordinated complaint with

Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals

(together, "Kaiser") and Guardian Life Insurance Company of America

("Guardian") in the U.S. District Court of Massachusetts against

Pfizer    and   Warner-Lambert        Company      (together,     "Pfizer").       The

coordinated plaintiffs asserted that they had suffered injury from

the fraudulent marketing of Neurontin for off-label uses, and

alleged   violations      of,    inter   alia,      RICO    and   the    PIFS.     The

coordinated     complaint       was   part    of   a   multidistrict      litigation

("MDL")    which    had     been      consolidated         in   the     District    of

Massachusetts on November 24, 2004.

                                         -4-
          On March 2, 2009, Pfizer filed a motion seeking summary

judgment on all of the coordinated plaintiffs' pending claims.   On

January 8, 2010, the district court granted Pfizer's motion in

part, dismissing the claims of Guardian and Aetna, but denying

summary judgment as to Kaiser's claims.   See In re Neurontin Mktg.

& Sales Practices Litig. (Neurontin Coordinated SJ), 677 F. Supp.
2d 479, 499 (D. Mass. 2010).   The court entered judgment against

Guardian and Aetna and in favor of Pfizer on February 9, 2011, and

on April 20, 2011, the court denied Aetna's motion to alter or

amend judgment and motion for reconsideration.     On May 19, 2011,

Aetna timely filed a notice of appeal as to the district court's

judgment against Aetna and the court's denial of Aetna's motion for

reconsideration.

                               II.

          We review a district court's grant of summary judgment de

novo, "drawing all reasonable inferences in favor of the non-moving

party   while   ignoring   'conclusory    allegations,   improbable

inferences, and unsupported speculation.'" Sutliffe v. Epping Sch.

Dist., 584 F.3d 314, 325 (1st Cir. 2009) (quoting Sullivan v. City

of Springfield, 561 F.3d 7, 14 (1st Cir. 2009)).    We must reverse

a grant of summary judgment if we find that "the nonmovant has

'established a genuine issue of material fact that a reasonable

jury could resolve in their favor.'"   Rockwood v. SKF USA Inc., 687
F.3d 1, 9 (1st Cir. 2012) (emphasis omitted) (quoting Collins v.

                               -5-
Univ. of N.H., 664 F.3d 8, 19 (1st Cir. 2011)).                   We assume

familiarity   with   the    background   facts    concerning     Neurontin's

development and FDA approval described in Kaiser, slip op. at 7-8.

These were not disputed at summary judgment.         We describe only the

facts relevant to Aetna's appeal.

A.         Neurontin's Effectiveness for Off-Label Uses

           As the district court noted, Aetna presented studies

showing that Neurontin was not more effective than a placebo in

treating certain off-label indications.          These studies included:

four   clinical   studies    regarding   bipolar     disorder,     Neurontin

Coordinated SJ, 677 F. Supp. 2d at 489; six clinical trials

regarding neuropathic pain, id.; four clinical trials regarding

nociceptive pain, id. at 490; three studies regarding migraine,

id.; and three clinical trials regarding doses above 1800 mg per

day, id. at 490-91.

B.         Defendants' Marketing of Neurontin for Off-Label Uses

           Beginning in late 1995 and early 1996, Parke-Davis, a

subsidiary of Warner-Lambert, began marketing Neurontin as an

effective treatment for bipolar disorder and other mood disorders,

neuropathic and nociceptive pain, migraines and other headaches,

and doses above 1800 mg per day, though the FDA had not approved

Neurontin for these off-label uses.              These marketing efforts

continued after Pfizer purchased Parke-Davis in 2000, through at

least 2001, and are described in Kaiser, slip op. at 8-9.

                                   -6-
            As the district court stated, Aetna "presented evidence

that Defendants communicated half truths that are actionable under

the RICO statute" in conducting this marketing, including by

"suppressing negative information while submitting for publication

in monographs positive information about off-label indications."

Neurontin Coordinated SJ, 677 F. Supp. 2d at 492; see also id. at

495, 498-99.    Pfizer does not argue to the contrary on appeal.

C.        Defendants' Targeting of Third-Party Payors ("TPPs"),
          Including Aetna

          Defendants' efforts to promote Neurontin, for both on-

label and off-label uses, demonstrated their understanding that

TPPs, including Aetna, would both play a role in determining demand

for Neurontin (by managing access to formularies, or lists of drugs

for which TPPs would pay) and ultimately pay for most prescriptions

of Neurontin.

          In 1993, Parke-Davis listed Aetna as the number four

managed care plan it intended to target to encourage the use of

Neurontin as an anticonvulsant.    In 1994, Parke-Davis commissioned

a survey of the pharmacy directors of ten managed care plans,

including Aetna.   This study concluded that these plans, including

Aetna,   were   unlikely   to   place   formulary   restrictions   on

anticonvulsants.    A 1998 Parke-Davis business plan stated that,

"[i]n general, formulary access is not an issue for Neurontin so

share building programs can be carried out unrestricted."     Pfizer

prepared a marketing business plan regarding Aetna in 2002 that

                                  -7-
noted that Pfizer's "sales representatives have open access to the

providers" in Aetna's network.         That same year, Pfizer established

a Neurontin Outcomes Research Task Force that sought to support the

marketing of Neurontin for neuropathic pain and to prepare "for a

more vigorous defense of reimbursement" to managed care plans.            In

2003,    as    Neurontin's    patent     neared   expiration,    defendants

commissioned a study by a market research company of how TPPs would

react to a new tablet form of the drug intended to compete with

generic forms of the drug.       The market research company conducted

focus groups with TPP representatives, including representatives

from    Aetna.     Pfizer    prepared    "HMO   Opportunity   Reports"   for

Neurontin that tracked formulary status, projected annual sales and

prescriptions, potential profits, and market share for various

HMOs, including Aetna.       Pfizer also tracked sources of revenue for

Neurontin sales; in 2001, Pfizer recorded that 69% of its Neurontin

revenues came from TPPs.

D.            Aetna's Decision to Pay for Neurontin Prescriptions

              Aetna, a large TPP, provides health payment benefits to

more than 13 million people across the country.                 Aetna added

Neurontin to its formulary -- a list of drugs it agreed to pay for

under its member contracts -- soon after the FDA approved Neurontin

in 1993 for use as an add-on therapy in the treatment of epilepsy.

              Aetna had a formulary development team comprised of

pharmacists who developed clinical reviews of drug classes to

                                       -8-
present to Aetna's Pharmacy and Therapeutics Committee ("P & T

Committee").    These reviews presented all the clinical information

available to Aetna about a drug class, and included all the drugs

within a class used for a particular therapeutic purpose.                       The

formulary    development      team   looked     at     package    inserts,     drug

compendia, and online collections of clinical research, and also

met with drug manufacturers to get information that had not been

published.

            Aetna's P & T Committee met monthly to determine what

would be included on formularies, as well as appropriate coverage

restrictions on drug classes, by majority vote.                    The Committee

reviewed clinical drug reviews, previous clinical policy bulletins

the Committee had issued, and any other formulary documents (such

as formulary guides disseminated to doctors).                     The Committee

considered   the    safety,    efficacy,       on-labeled     indications,      and

off-label indications of drugs, as well as cost information and the

other drugs within a class.          To control drug prescriptions, Aetna

used formulary controls and mailings to physicians.

            Aetna   initially        decided     not     to   place    formulary

restrictions on the anticonvulsant drug class, which included

Neurontin.     In late 2003, however, Aetna decided to manage the

class of anticonvulsants because it wanted to encourage the use of

first-line     monotherapy      drugs.          Neurontin        was   moved    to

"non-preferred" status.        That is, Aetna imposed quantity (i.e.,

                                       -9-
dose) limits on Neurontin prescriptions in 2004, and step edits

(under which other drugs needed to be tried before Neurontin could

be prescribed) in 2006.         Some other anticonvulsants were moved to

non-preferred status at the same time.

               Michael Brodeur, the head of formulary development and

clinical pharmacy policies at Aetna, had communications with Pfizer

and     Warner-Lambert,       but   did     not    remember   any     specific

communications about Neurontin. Aetna conceded that defendants, in

any communications to Aetna about Neurontin, had not made any

direct misrepresentations to it, its P & T Committee, or its

formulary development team.          Before January 2004, Aetna did not

manage the drug class which included Neurontin. But Brodeur stated

that,    had    the   facts   concerning    the   manufacturers'    misleading

marketing campaign surfaced earlier, he believed this would have

led Aetna to start to manage this drug class at an earlier date.

E.             Statistical Evidence of Causation

               The summary judgment record included the statistical

evidence presented by experts Dr. Meredith Rosenthal, Ph.D., and

Dr. Raymond Hartman, Ph.D., that we described in Kaiser, slip op.

at 13-16, 19-20.       For the reasons stated in Kaiser, that evidence

could be found by a reasonable factfinder to show that Pfizer's

marketing of Neurontin for off-label indications caused a sharp

increase in the number of prescriptions that Aetna paid for or

reimbursed.

                                     -10-
          Dr. Rosenthal, an associate professor of health economics

and policy at the Harvard School of Public Health, submitted an

expert report in which she used "standard econometric methods" to

quantify the impact of defendants' promotional activities on the

number of off-label prescriptions of Neurontin written.                      Dr.

Rosenthal's   data     on    promotional     spending   included      defendants'

expenditures on detailing and advertising in professional journals.

Her database included prescriptions paid for by Aetna, as did Dr.

Hartman's.

          Dr. Rosenthal's analysis demonstrated that defendants'

marketing of Neurontin for the off-label indications of bipolar,

neuropathic pain, nociceptive pain, migraine, and doses over 1800

mg per day caused 43 million off-label prescriptions of Neurontin

between 1995 and 2004.            This total included prescriptions for

Neurontin for these uses paid for by Aetna.                She concluded that

nationally during this period, defendants' off-label marketing

caused   99.4%    of        the   Neurontin     prescriptions      written    by

psychiatrists for bipolar; 27.9% of the Neurontin prescriptions

written by neurologists for migraine; 70.0% of the Neurontin

prescriptions    for    neuropathic        pain;   84.7%   of   the    Neurontin

prescriptions for nociceptive pain; and 37.5% of the Neurontin

prescriptions for doses exceeding 1800 mg per day.

                                      -11-
                                      III.

           In ruling on defendants' motion for summary judgment, the

district court concluded that Aetna had "presented evidence that

Defendants communicated half truths that are actionable under the

RICO statute," Neurontin Coordinated SJ, 677 F. Supp. 2d at 492,

and that plaintiffs "presented sufficient evidence to support

[their] RICO claim that Neurontin was ineffective for the off-label

indications," so that they sustained injury from paying for off-

label prescriptions of Neurontin, id. at 498.

           However, the court also determined that:

     There is no evidence in the record that Guardian or Aetna
     at any point directly relied on Pfizer's "half truths,"
     communicated through its alleged manipulation and
     withholding of studies that suggested Neurontin's
     ineffectiveness for off-label indications. Rather, their
     causation argument is wholly dependent on individualized
     proof that their members' prescribing physicians relied
     on defendants' misrepresentations. Because the Court has
     concluded that the evidence provided in support of this
     theory, namely the aggregate evidence presented in Dr.
     Meredith Rosenthal's report, is legally insufficient to
     effectively segregate damages caused by Defendants'
     misrepresentations from damages caused by other sources,
     Guardian and Aetna cannot rely solely on the aggregate
     evidence to prove causation. Accordingly, the motion for
     summary judgment with respect to Guardian and Aetna will
     be allowed.

Id. at 497 (emphasis added) (footnote omitted). The district court

determined that "[w]hile each of the Coordinated Plaintiffs can

prove   through   aggregated    proof    that   the    fraudulent    marketing

campaign   likely   caused   them     injury,   they    cannot   prove   which

doctor's   prescriptions       were    caused   by     Defendants'     alleged

                                      -12-
fraudulent misrepresentations or omissions and which were not."

Id. at 495.     Because Aetna did not present proof of its direct

reliance upon defendants' misrepresentations,1 as Kaiser did, the

court concluded that Aetna's evidence of but-for causation -- which

relied   largely    on    aggregate      statistical      evidence    --   was

insufficient as a matter of law.              The district court granted

defendants' motion for summary judgment as to Guardian and Aetna's

claims, including Aetna's claim under the PIFS (though the court

did not discuss this claim separately).          Id. at 499.

          Aetna argues on appeal that the district court erred in

rejecting its aggregate evidence of causation and damages under

RICO and in requiring Aetna to present stronger evidence of direct

misrepresentations and reliance as to its formulary.             Aetna also

argues that the court erred in dismissing its claim under the PIFS.

Defendants    respond    that   the   court   correctly    rejected   Aetna's

aggregate evidence and PIFS claim, and that Aetna's RICO claim was

further doomed by its failure to present evidence of proximate

causation or injury.

     1
       Aetna argues on appeal that in addition to its aggregate
evidence of but-for causation, it presented Brodeur's testimony as
to the effect of Pfizer's suppression of negative information about
Neurontin's off-label effectiveness on Aetna's decision not to
impose restrictions on Neurontin in its formulary.      Because we
conclude that Aetna's aggregate evidence of but-for causation was
sufficient to survive summary judgment, we need not separately
consider the adequacy of Brodeur's testimony.

                                      -13-
A.           RICO: But-For Causation and Aggregate Evidence

             The but-for causation question in this case is "whether,

absent Pfizer's fraud, [a plaintiff TPP] would have paid for fewer

off-label Neurontin prescriptions."        Kaiser, slip op. at 24.    In

Kaiser, we noted "the use of . . . aggregate evidence to show

causation under several causes of action" and concluded that there

was "no reason to reach a different conclusion for the specific

subset of RICO claims based on fraudulent marketing."         Id. at 54.

We believe the evidence Aetna presented on but-for causation --

that in the absence of Pfizer's alleged fraud, Aetna would have

paid for fewer off-label prescriptions of Neurontin -- survives

summary judgment.2    Aetna's evidence of but-for causation included

not   only    aggregate   statistical    evidence,   but   circumstantial

evidence, such as the increase in off-label prescriptions of

Neurontin following the initiation of Pfizer's alleged fraudulent

marketing efforts, and the fact that Pfizer embarked on these

efforts in order to increase sales of Neurontin for off-label uses.

The absence of evidence from individual doctors in this record does

not defeat our conclusion that summary judgment was inappropriately

      2
        Defendants argue on appeal that "[a]ggregate proof of
reliance in these circumstances is impermissible for the additional
reason that it represents a back-door attempt to invoke the 'fraud
on the market' doctrine, which is limited to the securities context
and cannot be applied to Plaintiffs' RICO claims." As we explained
in Kaiser, slip op. at 29 n.9, the analogy between the fraud-on-
the-market doctrine and the use of aggregate evidence in civil RICO
cases is inapt.

                                  -14-
granted.3    It should have been left to a jury to weigh the

aggregate and circumstantial evidence of causation presented by

Aetna against any failure to present individualized testimony from

doctors.

            While Aetna did have the burden of "segregat[ing] damages

caused by Defendants' misrepresentations from damages caused by

other sources," Neurontin Coordinated SJ, 677 F. Supp. 2d at 497,

this did not mean that Aetna was required to "prove which doctor's

prescriptions    were   caused   by   Defendants'   alleged   fraudulent

misrepresentations," id. at 495, as the district court concluded.

Quantifying the damages caused by defendants' alleged fraud belongs

to the damages phase of Aetna's RICO case, and "[o]n that phase of

the case the plaintiff has a more relaxed burden of proof."         BCS

Servs., Inc. v. Heartwood 88, LLC, 637 F.3d 750, 759 (7th Cir.

2011).

     3
       Defendants argue that Aetna failed to make an adequate
showing of but-for causation because it "did not produce a single
doctor who claimed to have 'relied on a misrepresentation or
omission in prescribing Neurontin for an off-label indication.'"
Defs.' Br. at 19 (quoting Neurontin Coordinated SJ, 677 F. Supp. 2d
at 495). Aetna's failure to present the form of but-for causation
evidence that defendants would have favored does not mean that the
evidence Aetna did present was insufficient for a jury to conclude
that Aetna showed the needed causation. Moreover, as we noted in
Kaiser, slip op. at 50, relying on physicians' individual
recollections as to their prescribing decisions might have been an
unreliable approach.

                                  -15-
B.         RICO: Proximate Causation

           Pfizer also argues that summary judgment was, in any

event,   appropriate      because    there   was       inadequate    evidence   of

proximate causation. For reasons similar to those we enunciated in

Kaiser, we   conclude      that   Aetna   made     a    sufficient    showing   of

proximate causation to withstand summary judgment.

           Regarding Pfizer's argument that Aetna, unlike Kaiser,

has not shown direct reliance on Pfizer's misrepresentations,

direct reliance is not an element of proximate cause in a private

RICO claim predicated on mail fraud.          See Bridge v. Phoenix Bond &

Indem. Co., 128 S. Ct. 2131, 2134 (2008).                     Moreover, Aetna's

aggregate statistical evidence of causation did not rely upon the

theory that direct misrepresentations by Pfizer influenced Aetna's

management of its formulary.         Instead, Dr. Rosenthal demonstrated

a causal relationship between Pfizer's alleged fraudulent marketing

to doctors and Aetna's payment for off-label prescriptions of

Neurontin. Aetna did not have to show direct reliance to establish

proximate or but-for causation.

           A jury could have found that Aetna, like Kaiser, was "the

primary and intended victim[] of the scheme to defraud," id. at

2139, and that the injury suffered was a "foreseeable and natural

consequence" of the fraudulent scheme, id. at 2144.                  Because TPPs

ultimately   paid   for    most     prescriptions        of   Neurontin,   Pfizer

monitored TPPs' management of Neurontin on their formularies, kept

                                      -16-
track of sales to TPPs, and targeted TPPs as Neurontin customers,

with respect to both on-label and off-label sales of the drug.

Defendants particularly monitored sales to Aetna, targeted Aetna as

a Neurontin customer, and sought information from Aetna about its

formulary management practices and willingness to pay for Neurontin

instead   of     generic    gabapentin.       Pfizer      prepared    a   marketing

business plan targeting Aetna.                A reasonable jury could have

concluded based on this evidence that Aetna was the intended victim

of defendants' fraudulent scheme and that Aetna's economic injury

was a "foreseeable and natural consequence" of this scheme.                      That

is so even if the scheme involved making misrepresentations to

doctors about Neurontin's off-label effectiveness instead of making

those misrepresentations directly to Aetna itself.

               The functional tests for proximate cause articulated in

Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 269-

70 (1992), further favor the conclusion that Aetna made an adequate

proximate causation showing.           A jury could have ascertained the

amount    of    Aetna's    damages   based     on   Dr.   Rosenthal's      and    Dr.

Hartman's expert reports; Aetna alone suffered the damages it

alleged, so there was no risk of multiple recoveries; and as the

party directly injured, Aetna was best placed to act as a private

attorney general.         Id.

               The   "individualized    decisions      made   by     thousands     of

physicians who decided to prescribe Neurontin" do not introduce

                                       -17-
such attenuation   into   Aetna's causal    theory   as to   prevent   a

reasonable jury from finding proximate causation, as defendants

contend.   A reasonable jury could have concluded, based on the

evidence, that defendants' scheme relied upon the expectation that

fraudulent off-label marketing to doctors would induce them to act

in a foreseeable fashion -- i.e., to write off-label prescriptions

for Neurontin that would be paid for by Aetna.

C.         RICO: Economic Injury

           Defendants argue on appeal that the district court's

grant of summary judgment may also be affirmed on the alternate

theory, rejected by the district court, that Aetna failed to

present evidence of economic injury.       Defendants argue that, to

establish the economic injury needed to make out its civil RICO

claim, Aetna was required to prove that Neurontin was always

ineffective for the off-label uses at issue,4 and that Aetna failed

to produce evidence of ineffectiveness at summary judgment.

Defendants are incorrect.     Aetna presented evidence at summary

     4
       Defendants argue that Aetna "expressly disavowed any burden"
to prove Neurontin's ineffectiveness, and instead opposed summary
judgment based on a purportedly invalid "cheaper alternative"
theory of economic injury. That misrepresents Aetna's arguments
that it could prove economic injury based either on a "cheaper
alternative" theory or on a theory of Neurontin's ineffectiveness.
See Coordinated Pls.' Mem. Law in Opp'n to Defs.' Mot. Summ. J. at
18-21 & n.16. Because we conclude that Aetna presented sufficient
evidence of Neurontin's ineffectiveness to survive summary
judgment, we need not pass on the viability of the "cheaper
alternative" theory of injury.

                                -18-
judgment5 that multiple clinical trials had demonstrated that

Neurontin was no more effective than placebo in treating the off-

label conditions at issue. A reasonable jury could have found from

the evidence on the summary judgment record that Neurontin was

ineffective   for   these   uses,6   as     the   district   court   correctly

concluded.    Neurontin Coordinated SJ, 677 F. Supp. 2d at 498 ("The

Court finds that [plaintiffs have] presented sufficient evidence to

support [their] RICO claim that Neurontin was ineffective for the

off-label indications . . . .").

D.        Aetna's PIFS Claim

          Coordinated plaintiffs asserted a PIFS claim pursuant to

18 Pa. Cons. Stat. § 4117(a)(2). The district court denied Aetna's

PIFS claim without separate discussion.            Id. at 499.   In light of

our holding on the RICO claim, we vacate and leave the matter for

further consideration on remand.

     5
       Defendants devote much of their argument on this point to
the evidence presented at the trial on Kaiser's claims, and to the
district court's findings with respect to Kaiser's state law claim,
rather than examining the evidence of ineffectiveness plaintiffs
presented at summary judgment. In this case "we review the record
as it existed at the time the district court rendered its ruling."
Lewis v. City of Boston, 321 F.3d 207, 214 n.7 (1st Cir. 2003).
Further, on the fuller trial record, we rejected Pfizer's argument.
     6
       Defendants argue that "Aetna had the burden of proving that
none of its members derived any benefit from the defendant's drug,"
but they offer no authority in support of this contention, and it
is plainly incorrect. As we noted in Kaiser, slip op. at 57, "due
to the placebo effect, some patients would report improvements
regardless of whether the drug was scientifically effective for
their conditions."

                                     -19-
                               IV.

          The judgment of the district court is reversed as to

Aetna's RICO claim, and vacated as to Aetna's PIFS claim.      We

remand for further proceedings consistent with this opinion.

                              -20-