Had enough of Judge Jack Weinstein? No you haven’t.

On July 17, the Brooklyn-based federal judge issued a statement that could end up being cited in third-party payer litigation. The crux: while Eli Lilly and Co. should have been more transparent about the risks of its Zyprexa atypical antipsychotic drug, the people who were paying for Zyprexa should have been more vigilant and should have stopped paying for it if they didn’t like its cost or risks.

Let’s rewind a sec: the third-party payers are alleging that they overpaid for Zyprexa prescribed for patients they insure and that they paid for unapproved, off-label uses. “Third-party payers” has become a big tent: it includes traditional health insurance companies, union health and welfare funds, state governments and the federal government (Medicaid and Medicare). In this particular instance, it’s a group of union funds that are pushing for a class action, but some of their attorneys represent at least one state, probably more. An assistant U.S. attorney was at the July 17 hearing. Everybody’s got their hand out.  Heck, as the judge noted, the feds and state governments have already collected Medicare and Medicaid reimbursement from settlement awards to individual plaintiffs. 

Earlier this month, Judge Weinstein drafted a proposed RICO class action for third-party payer claims. And then he made it public. The draft twice mentioned this could all be avoided if the parties settled. When July 17 came along without a settlement, Judge Weinstein issued his “oral statement” that was nonetheless written. His staff handed copies to attorneys as they signed the appearance list. Then the judge read the statement and had it docketed.

The statement’s unusual in that it wasn’t in response to a motion. Lilly, the judge said, may not have been transparent about Zyprexa’s risks and may have promoted it for off-label uses. But he said the third-party payers also fell down on the job because they, and their pharmacy benefit managers, didn’t flag Zyprexa and instead kept shelling out for it. Now they want their money back. The judge noted that these are sophisticated users. Indeed, anyone who’s ever had their health insurance reject a prescription for Allegra because the patient can buy Zyrtec — out of his own pocket — knows the iron fist by which pharmacy formularies rule. Even a call from your doctor might not make them budge.

So, Judge Weinstein wonders, why didn’t these inflexible pharmaceutical gatekeepers keep up on the medical literature and just say “there are cheaper atypical antidepressants that are as effective and less risky and we’re not paying for unapproved uses?” He notes that the Veterans Health Administration — a federal agency, by the way — did just that. To top it off, he noted, the third-party payers that are complaining they were overcharged still list Zyprexa on their formularies! The judge suggested that a jury might very well conclude that the plaintiffs were asleep at the switch. And still are.

And he wasn’t finished yet: Judge Weinstein pointed out that the federal government, through the FDA, is responsible for policing drug safety and misuse, while, at the same time, other federal agencies were paying for a drug that arguably didn’t carry complete warnings and may not have been of any use at all for off-label purposes. Again, the judge wondered if a jury might not conclude that if one part of the federal house was asleep at the switch, the other can’t be heard to complain “we wuz robbed!”

So why worry about one judge’s “oral statement?” Give Judge Weinstein credit for having learned something in his 86 years: he knows his statement may make it into motions and opinions elsewhere. Just take a look at his proposed RICO class cert, marked “DRAFT — FOR DISCUSSION ONLY.” It came out July 2 and by July 17 Lilly was complaining that it was being cited in two state court filings. It asked Judge Weinstein to withdraw it and state that it shouldn’t be cited. But he refused, saying he likes the First Amendment and the free marketplace of ideas. Shop away, fellow jurists!