An insurance company sued several pharmacies and doctors that had financial interests in those pharmacies. The gist of the suit was that the doctors were prescribing a compound cream that patients filled at the pharmacies in which the doctors had a financial interest and from which the doctors received kickbacks. The trial court granted summary judgment for the defendants, finding no fraudulent behavior or tortious conduct. The Pennsylvania Superior Court affirmed. The defendants argued that the trial court did not have subject matter jurisdiction because indispensable parties were missing. The Superior Court disagreed and ruled that other doctors that had a financial interest in the defendant pharmacies were not indispensable. As to the merits, the Court ruled that the insurance company failed to establish how the pharmacies’ inclusion of uncontrolled, non-peer-reviewed studies in literature it provided doctors was a fact, or even presented a material issue of fact, amounting to a material misrepresentation. Furthermore, the Court ruled that the pharmacies’ business structures were legal and could not form the basis of a fraud claim.
