Legal Briefs: New York Allows Patient to Sue Physician for Deceptive Business Practices

In this case, a New York court was asked to decide whether, in addition to medical malpractice, a physician may be sued for statutory fraud based on deceptive business practices.

The Background

The facts were straightforward. The defendant neurologist had been treating the plaintiff for multiple sclerosis. She had been treated successfully with two medications in the past when the physician decided to change her medication regimen to another drug. The plaintiff claimed not to have been told why her medication was changed, nor was she warned of adverse effects. After taking the new medication, the patient suffered weakness, dizziness, rashes, lower extremity pain, hair loss, and a relapse in her multiple sclerosis. She hired an attorney and sued the physician for medical malpractice.

During the discovery period, the plaintiff’s attorney discovered that the physician was being paid by the drug manufacturer of the medication that had harmed the plaintiff. While this was not terribly uncommon, it was discovered that the payments from the manufacturer totaled over 30 times the national average for physicians in the defendant’s field. The attorney filed an additional claim against the physician, suing him for fraud under New York’s General Business Law 349, which provides that “deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful.” The complaint alleged that the physician was accepting payments over 30 times the national average as part of a joint sales and marketing effort that influenced his treatment decisions. Discovery also revealed that the physician had authored numerous studies for the manufacturer, which he had not disclosed.

The defendant moved to dismiss the case, claiming that the plaintiff had not satisfied the elements of New York’s General Business Law 349, which requires showing “(1) that the act or practice was consumer-oriented, (2) that the act or practice was misleading in a material respect, and (3) that the plaintiff was injured as a result of the deceptive practice or act.”

The Decision

The court ultimately decided that plaintiff had stated a claim under General Business Law 349. The court noted that the plaintiff had alleged that the physician had been paid over 30 times what other doctors in his field were paid by the manufacturer of the medication. “In light of the magnitude of payments” that the physician was receiving from the manufacturer, which was “well beyond what could be considered routine or ordinary,” an inference can be drawn that the doctor was part of a marketing campaign that involved many more patients than the plaintiff, said the court. The court pointed out that the physician had authored numerous funded studies but failed to disclose payments for them, and that the plaintiff would not have accepted the treatment option had she known of the physician’s relation to the manufacturer.

The court refused to dismiss the case, and it is currently proceeding against the doctor.

Ann W. Latner, JD, is a freelance writer and attorney based in New York. She was formerly the director of periodicals at the American Pharmacists Association and editor of Pharmacy Times.