Mar 192012

FCA Claims Based on “Fraud on the FDA” Dismissed Under Rule 9(b)

Jaime L.M. Jones and Nirav Shah
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Posted by Jaime L.M. Jones and Nirav Shah

Citing the failure to plead claims with particularity, a federal court in the District of Massachusetts recently dismissed a qui tam action brought against Infomedics, Inc. and GlaxoSmithKline. United States ex rel. Arlene Tessitore v. Infomedics, Inc., GlaxoSmithKline, PLC, and GlaxoSmithKline, LLC., No. 08-11775-NMG (D. Mass. Mar. 12, 2012). The case highlights the difficulty in connecting allegations of “fraud on the FDA” to FCA violations.

Tessitore concerns GSK’s antidepressant drug, Paxil, FDA-approved labeling which includes an indication for the treatment of social anxiety disorder (“SAD”). Among other claims, the relator alleged that GSK and its vendor, Infomedics, concealed from FDA information related to certain adverse events that was received through an informational Paxil hotline operated by Infomedics. Relator alleged violations of the FCA based on two theories: (1) that GSK represented in its application to FDA for Paxil that it would report adverse events to the Agency; and (2) that had GSK reported the adverse events to FDA in a timely fashion, FDA would have ordered the company to issue enhanced warnings sooner. Under both theories, relator claimed that the concealment rendered subsequent claims for reimbursement of Paxil false.

With respect to the first theory, Judge Nathaniel Gorton held that relator’s complaint was simply devoid of specifics, including when a misrepresentation to FDA was made, to whom it was made, and why the statements were false. As for the second theory of liability, Judge Gorton found that it failed under Rule 9(b) “because it presumes, without factual support, that submitting the 7,000 adverse reports would have hastened the FDA’s decision to require warnings and that, had such warnings been implemented sooner, physicians would have prescribed Paxil less often between 1999 and 2002.” Id. But, as the government itself pointed out, FDA was aware of the adverse events and did not take any steps to add enhanced warnings. And absent evidence of alternative treatments available at the time, the inference that physicians would have prescribed other treatments is unsupportable. Thus, this decision highlights the difficulty of adequately pleading the causation element of FCA liability when trying to advance qui tam claims based on the theory of “fraud on the FDA.”

Jaime L.M. Jones

Chicago

jaimejones@sidley.com

Nirav Shah

NiravShah@sidley.com

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