May 12025

Another Court Requires But-For Causation for AKS/FCA Claims; Cuts Nationwide Case Down to Two Physicians

Jaime L.M. Jones, Brenna E. Jenny and Matt Bergs
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Last week, the Northern District of Illinois issued a significant opinion in a False Claims Act (“FCA”) qui tam action alleging a nationwide kickback scheme by a pharmaceutical manufacturer to promote its gastrointestinal drugs.  United States ex rel. Wilkerson & Jackson v. Allergan Limited, No. 22-CV-3013 (N.D. Ill. Apr. 23, 2025).  The court provided important guidance on the pleading standards and causation requirements for FCA claims predicated on alleged Anti-Kickback Statute (“AKS”) violations.  Specifically, the court became the latest court to require that a kickback be the but-for cause of claims to establish those claims “resulted from” an AKS violation such that they are false under the FCA.  In adopting that standard, the Court largely followed the reasoning in the recent First, Sixth, and Eighth Circuit decisions requiring but-for causation (reported on here, here, and here).  The court’s subsequent, rigorous application of that standard to the relators’ complaint resulted in dismissal of the bulk of the relators’ AKS-based claims.

The relators, two former sales representatives employed by the defendant, alleged that the defendant’s Speaker Bureau, while ostensibly an educational program, was in fact designed to funnel cash, meals, travel, and other benefits to high-prescribing physicians to induce further prescriptions of the defendant’s gastrointestinal drugs.  The complaint detailed thousands of speaker events, many of which were allegedly “sham” events with little or no educational content, and described a pattern of rewarding high-volume prescribers and terminating low-prescribers from the program.  The relators further alleged that these practices resulted in the submission of false claims to Medicare and Medicaid.  The court found that the relators pled an AKS violation with the particularity required by Federal Rule of Civil Procedure 9(b) but, except for two physicians, failed to plead with particularity that claims “resulted from” the AKS violations such that they were “false” under the FCA.  Notably, the court found the relators’ allegations were insufficient “no matter what causal standard [wa]s imposed.”

To establish that claims “resulted from” the AKS violations, the relators relied chiefly on the correlation between the submission of the claims at issue and the kickbacks.  Specifically, the relators included allegations that the prescription volumes of physicians that participated in the Speaker Bureau were higher than the prescription volumes of physicians that did not participate in the program.  Employing its newly-adopted but-for causation standard, the court deemed these allegations insufficient because the relators had not adequately controlled for alternative, legal explanations for the higher prescription volume of Speaker Bureau physicians.  For example, the court noted that the Speaker Bureau participants could have had higher prescription volumes simply because “Allergan recruited into the Speaker Bureau doctors who wrote lots of prescriptions for Allergan drugs.”  Regarding the two physicians as to which relators adequately pled an inference of but-for causation, the court found that there were sufficient allegations of a quid pro quo relationship with one and a plausible inference that the other wrote ten prescriptions because of a Speaker Bureau payment.

In ruling on the relators’ AKS claims, the court also briefly addressed the relators’ argument that they did not need to plead but-for causation for AKS claims if the court considered them under the express and implied false certification theories they pursued.  The court agreed that AKS claims could be pursued outside of a “resulting from” theory, as part of an express or implied false certification theory, but cautioned that the requirements of those theories were no less rigorous.  Indeed, the court dismissed the relators’ express and implied false certification theories premised on violations of the AKS, finding the relators failed to identify any specific representation made in connection with the submission of claims for payment that was rendered false by the defendant’s conduct.

The court thus dismissed the nationwide AKS/FCA claims but allowed the AKS/FCA claims regarding the two physicians to move forward, along with a conspiracy claim related to one of two physician and a FCA retaliation claim.

A copy of the court’s opinion may be found here.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.

Jaime L.M. Jones

Chicago

jaimejones@sidley.com

Brenna E. Jenny

Washington, D.C.

bjenny@sidley.com

Matt Bergs

Chicago

mbergs@sidley.com

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