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9 Tex. A&M L. Rev. Arguendo 1 (2021-2022)

handle is hein.journals/tsamlw9 and id is 1 raw text is: Volume 9 Texas A&M Law Review Arguendo 2021 PHARMACEUTICAL PHONIES: THE ENTANGLEMENT OF FRAUD, THIRD-PARTY PAYORS, AND PROXIMATE CAUSE IN CIVIL RICO CASES by: Merrick M. Hayashi* I. INTRODUCTION This Case Note analyzes the Ninth Circuit's approach to the issue of whether patients and doctors destroy proximate cause in cases where third-party payors (TPPs) sue drug companies for fraudulently misrepresenting the health risks associated with their products. In the 2019 case Painters & Allied Trades District Council 82 Health Care Fund v. Takeda Pharmaceuticals Co., the Ninth Circuit held that TPPs suing to recover damages from a pharmaceutical company for the fraudulent omission of a drug's health risks could satisfy the proximate cause requirement for a civil cause of action under § 1964(c) of the Racketeer Influenced and Corrupt Organizations Act (RICO).1 The Ninth Circuit's decision is satisfactory in that it faithfully (1) observes the Supreme Court's direct relation test and (2) follows precedent establishing that a plaintiff satisfies the proximate cause requirement when their alleged injury is a foreseeable and natural consequence of the defendant's fraud. As a matter of public policy, this holding is positive because it hamstrings pharmaceutical companies' ability to escape liability by hiding behind patients, doctors, and other actors inhabiting the chain of causation. Additionally, the Ninth Circuit's holding is positive in that it adheres to Supreme Court precedent and helps deter future injurious conduct. DOI: https://doi.org/10.37419/LR.V9.Arg.1 * J.D. Candidate, Texas A&M University School of Law, May 2023; B.S. in Biochemistry, Baylor University, May 2018. The Author would like to thank his parents, Julia and Stuart Hayashi, for their continuous support. The Author would also like to thank Professor Brian Larson for his approachability, kindness, and diligence in helping the Author develop his legal writing skills. 1 Painters & Allied Trades Dist. Council 82 Health Care Fund v. Takeda Pharms. Co., 943 F.3d 1243, 1260 (9th Cir. 2019), writ denied, 141 S. Ct. 86 (2020); 18 U.S.C. § 1964(c). 1

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