As ridiculous as this sounds, a Scottsdale based drug manufacturer argued that consumers should not be entitled to legal protections against fraudulent claims and advertising because “drugs aren’t merchandise.”
The Arizona Court of Appeals apparently found the argument ridiculous too, because they have ruled that yes, Medicis Pharmaceuticals are selling “merchandise” and no, they can’t deceive consumers of their merchandise. Sounds reasonable to me.
After using a medication manufactured by Medicis, Amanda Watts became severely ill, developing both lupus and drug-induced hepatitis. The hepatitis was curable but, sadly, lupus is an (as yet) incurable autoimmune disorder. Her damages are, therefore, severe and will significantly, negatively impact on her quality of life and her health for as long as she lives.
Watts filed a complaint against Medicis, alleging consumer fraud, product liability, and punitive damages claims. She alleged that Medicis knowingly used false pretenses and omitted material facts from the information presented to her regarding Solodyn’s risks in order to induce her to buy and use Solodyn…
First, Watts alleges that Medicis violated Arizona’s Consumer Fraud Act, A.R.S. § 44-1522 et seq., by affirmatively misstating the known risks of Solodyn to induce consumers to purchase the medication…
The Arizona Consumer Fraud Act (CFA) prohibits “any deception, deceptive or unfair act or practice, fraud, false promise, [or] misrepresentation” in connection with “the sale or advertisement of any merchandise.” A.R.S. § 44-1522. “Merchandise” includes “objects, wares, goods, commodities, [or] intangibles[.]” A.R.S. § 44-1521(4).”
Medicis argued that “prescription drugs are not merchandise as defined by” the CFA. The court disagrees:
[The] purpose of the CFA is to protect consumers from being deceived by unfair business practices in the sale and advertisement of merchandise. Medication is “merchandise” as defined by the plain language of the statute: it is a tangible good available for purchase in the marketplace.
Moreover, prescription medication is often advertised and sold to consumers in a manner similar to other consumer goods, implicating the need for the protection of the CFA. Although a medical professional must first issue a prescription in order for a consumer to obtain certain
drugs, consumers discuss medications with their medical providers and may express preferences based on advertising. Consumers also have a meaningful choice whether to purchase and use particular drugs once prescribed. As a result, consumers may be deceived through fraudulent
misrepresentations in connection with the sale of prescription drugs just as in the sale of traditional consumer goods. We therefore hold that the CFA applies to the sale and advertisement of prescription medications.”
The drug company went on to argue, basically, that it’s OK for them to deceive consumers, because they don’t deceive doctors and it’s the doctor’s job – not theirs – to tell consumers that their product is dangerous and that the drug company’s advertising is deceptive. The court disagrees, based in no small part on the fact that the drug companies these days are aggressively marketing directly to consumers whose primary source of information about drugs is, in this day and age, no longer their “informed intermediary”, i.e. the prescribing physician.
These two important rulings are a win for consumers of medical products because Arizona appeals court decisions are precedent setting, meaning they may be applied by lower courts in other cases. The full decision is available here (link will download a PDF).