The U.S. Supreme Court said Monday that it will not review the Fourth Circuit's decision to back the dismissal of a proposed class action accusing drugmakers of conspiring and inflating the price of a medication for Huntington's disease.

The justices rejected the bid for review by several MSP Recovery business entities that own recovery rights assigned by health plans that provide Medicare benefits. They asked the justices in a petition to weigh in on an "entrenched" circuit split over civil racketeering law. The petitioners said clarity is needed on whether physicians' prescribing decisions defeat proximate cause, and on how economic injury factors into the proximate cause analysis in the civil Racketeer Influenced and Corrupt Organizations Act statute.

These splits have profound implications in civil RICO actions, such as allowing drug manufacturers to exploit confusion over proximate cause to "insulate themselves from liability for defrauding federally funded health plans through sham charities and co-conspiring middlemen, such as specialty pharmacies," the entities said.

MSP Recovery business entities accused Xenazine manufacturer Lundbeck LLC and specialty pharmacy TheraCom LLC of conspiring to inflate the drug's price via public misrepresentations and illegal kickbacks to patient assistance charities.

The district court tossed the case. The Fourth Circuit backed the dismissal, finding the allegations were "shaky at best" and "stretch civil RICO liability beyond its limits." The judges said MSP Recovery didn't plausibly allege that the drug manufacturer proximately caused the RICO injury to assignees.

The judges said the causal theories were "derailed" by intervening factors like physicians' prescribing decisions. They also said while an economic injury may have been foreseeable, the theories did not allege it was a direct result of Lundbeck and TheraCom's conduct.

MSP Recovery Claims is represented by Aida M. Landa of MSP Recovery Law Firm, David Hilton Wise and William N. Evans of Wise Law Firm PLC and Shereef H. Akeel, Adam S. Akeel, Samuel R. Simkins, Daniel W. Cermak and Hayden Pendergrass of Akeel & Valentine PLC.

Lundbeck LLC is represented by Kolya David Glick of Arnold & Porter Kaye Scholer LLP.

TheraCom LLC is represented by Thomas H. Suddath Jr. and Raymond Cardozo of Reed Smith LLP.

The case is MSP Recovery Claims, Series LLC et al., Petitioners v. Lundbeck LLC et al., case number 24-1302, in the Supreme Court of the United States.