After paying California $24 million to resolve the state's lawsuit over an alleged Humira kickbacks scheme, AbbVie will now have to answer to investors who've filed a class action lawsuit in the company's home state.
On Monday in federal court in Chicago, Judge Charles Norgle certified the class action status of a securities fraud case against the drugmaker. In the case, investors claim AbbVie inflated its stock price by misleading the public about the effect a kickbacks scheme had on Humira's value.
Investors originally filed the lawsuit in September 2018. Last September, Norgle rejected AbbVie’s motion to dismiss the suit. In February, the investors asked Norgle to move the case forward as a class action lawsuit.
The plaintiffs contend that AbbVie made numerous false statements attributing the success of Humira to the company’s sales and marketing practices. In reality, a kickbacks scheme helped lift the drug's overall value, investors say.
When kickbacks allegations against the company became public, AbbVie's stock price fell and investors lost money, the suit claims.
In the prior California case, prosecutors said AbbVie provided physicians with traditional kickbacks such as cash, meals, drinks, gifts, trips and patient referrals to induce and reward Humira prescriptions. Further, the company hired nurse “ambassadors” to visit patients’ homes and provide care related to their Humira use, California prosecutors said.
The California case was prompted by a Florida whistleblower, a former AbbVie nurse, who said that the company used tactics to prevent patient complaints about Humira from reaching doctors.
In arguing against the class certification, AbbVie said that since the nurse ambassador allegation was made public by March 2018, the repeated disclosure—in the form of the California lawsuit—wouldn't have been the reason for the stock price decline the investors cited.
AbbVie maintained that the market price had already adjusted to the news. But Norgle wrote that “when exactly the allegations credibly entered the market has yet to be determined." That the question is “reserved for summary judgement or trial," the judge added.
Humira, which treats a variety of autoimmune conditions, became the world’s best-selling drug in 2012 and has remained in the top spot ever since. It generated about $20 billion last year.