(Bloomberg) -- A federal judge ruled Takeda Pharmaceutical Co. and Eli Lilly & Co. must defend a racketeering lawsuit claiming they defrauded third-party payers by marketing the Actos diabetes drug without disclosing its association with the risk of bladder cancer.

US District Judge John Holcomb certified a class-action case for thousands of third-party payers who reimbursed for Actos between 1999 and 2010, according to the May 24 opinion unsealed Monday in federal court in Santa Ana, California. Holcomb appointed Painters and Allied Trades District Council 82 Health Care Fund as the class representative.

The ruling came eight years after Takeda agreed to pay $2.37 billion to resolve US lawsuits from patients accusing it of hiding the cancer risks of Actos.

While the judge approved the certification of the suit under federal racketeering law, he declined a request to designate a separate class of California consumers.

Lilly said Tuesday it intended to appeal the ruling, while a spokesperson for Takeda declined to comment. The companies have denied the allegations over years of litigation. 

“We believe the court erred in certifying the national third-party payer class,” Lilly said in a statement. “The court’s ruling is preliminary and is not a determination of liability on merits of the case. Lilly feels confident that plaintiff’s claims lack merit and we will continue to vigorously defend this matter.”

R. Brent Wisner, an attorney for Painters, a Minnesota union health fund, said it was the first pharmaceutical class to be certified under the federal civil Racketeer Influenced and Corrupt Organizations Act.  

“It is about time we held Takeda and Lilly accountable for exposing millions of Americans to a carcinogen without their consent,” Wisner said in a statement. “Fraud should not pay — the use of civil RICO will help ensure that doesn’t happen here.” 

The case is Painters and Allied Trades District Council 82 Health Care Fund v. Takeda, US District Court, Central District of California (Santa Ana). 

(Updates with Takeda spokesperson declining to comment.)

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