“The Monster That Ate Jurisprudence”: The Misfire of Civil RICO in Third-Party Payor Recovery

A law created to dismantle organized crime is now being misused to target pharmaceutical companies. The Racketeer Influenced and Corrupt Organizations Act (RICO), originally intended to combat criminal enterprises, has since expanded far beyond its intended purpose. Third-party payors (TTPs), such as health insurers, have increasingly relied on RICO to sue pharmaceutical companies for deceptive marketing practices that allegedly cause significant financial harm. While it is important to hold pharmaceutical companies accountable for their fraudulent conduct, applying RICO in these cases represents a troublesome overreach. The link between the alleged fraud and TPPs alleged harm is too attenuated to meet RICO’s proximate cause requirement. Moreover, when state consumer protection laws already provide adequate remedies, resorting to RICO blurs its purpose and dilutes its intended function. This misuse of civil RICO highlights the need for legislative reform to prevent further misapplication of the law, while assuring proper protections are in place.