Court Dismisses Competitor’s Effort To Use The FCA To Perpetuate Patent Litigation

Posted by Scott Stein and Jessica Rothenberg

A recent opinion by a federal district court in California addressed a competitor’s effort to leverage the outcome of pharmaceutical patent litigation into an FCA suit. The case arose out of Hatch-Waxman litigation between Aventis, manufacturer of Lovenox (enoxaparin) and Amphastar, a generic competitor. After Amphastar filed an Abbreviated New Drug Application with the FDA seeking approval to manufacture a generic form of enoxaparin, Aventis filed a patent infringement suit against Amphastar, which counterclaimed antitrust violations. Ultimately, Aventis’s patents were found unenforceable, and Amphastar’s antitrust counterclaim was dismissed.

Amphastar then filed a qui tam action, claiming that Aventis had made false representations while prosecuting its patents, improperly listed its patents in the FDA’s Orange Book, engaged in baseless litigation against Amphastar in order to delay approval of its ANDA, made false representations and material omissions to the FDA, and thereby attempted to manipulate the approval or marketing of enoxaparin. After the government declined to intervene and the complaint was unsealed, Aventis moved to dismiss the FCA claims on several grounds.

Aventis first argued that the suit was barred because the complaint was based on information publicly disclosed in the prior litigation and regulatory proceedings. The court agreed that the disclosures in the preceding antitrust litigation, FDA submissions public court filings, and judicial decisions predating the present complaint all constituted public disclosures, and that Amphastar’s FCA claims were based on those public disclosures. However, the court found that Amphastar qualified as an original source because it had direct and independent knowledge of the alleged fraud and had a hand in the public disclosure of the allegations.

Aventis separately argued that the complaint should be dismissed for failure to state a claim because it was based on certain conduct (petitioning the FDA) protected under the Noerr-Pennington doctrine. The court rejected this argument, finding that Amphastar was seeking to impose liability on Aventis for the act of overcharging the government, and not for the act of petitioning the government, making the Noerr-Pennington doctrine inapplicable.

However, the Court agreed with Aventis that the complaint failed to plead an FCA violation with the particularity required by Rule 9(b). Although Amphastar sufficiently alleged that Aventis had engaged in certain misconduct, that Aventis had acted with knowledge and intent to deceive, and that the false statements were material, the court concluded that Amphastar failed to allege “the particular details of a scheme to submit false claims and details leading to a strong inference that those claims were submitted.” Accordingly, the complaint was dismissed with leave to replead. A copy of the court’s opinion in Amphastar Pharmaceuticals Inc. v. Aventis Pharma SA, et al., Case No. EDCV-09-0023 MJG (C.D. Cal.) can be found here.

It remains to be seen whether Amphastar can or will seek to replead a viable claim, but it will be interesting to see whether this case is an anomaly, or whether it portends a new strategy for generic manufacturers seeking to leverage victories in Hatch-Waxman litigation into FCA claims.