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).

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