Posted by Jaime Jones and Brenna Jenny
An Eastern District of New York judge recently declined to apply a relaxed pleading standard to qui tam claims, dismissing an FCA suit based on alleged violations of the Anti-Kickback Statute for relator’s failure to plead facts sufficient to identify false claims that were actually submitted to the government. In United States ex rel. Moore v. GlaxoSmithKline PLC, No. 1:06-cv-06047 (E.D.N.Y. Oct. 18, 2013), a former employee of GlaxoSmithKline (“GSK”) alleged that GSK induced doctors to prescribe its HIV drugs by offering honoraria and educational grants. The relator urged the district court to relax the Rule 9(b) pleading standard and require merely “an adequate basis for the Court to reasonably infer that false claims were submitted.” Slip op. at 7. The relator alleged the submission of false claims could be inferred from the fact that many patients who use GSK’s HIV products are federal healthcare program beneficiaries and allegations of one doctor’s supposed awareness of the alleged scheme.
In declining to relax the requirements of Rule 9(b), the District Court noted that the Second Circuit Court of Appeals has not yet weighed in on the issue, which has led to a Circuit split. However, the district court observed that the majority of lower courts in the circuit have rejected relators’ attempts to utilize a lower pleading standard. Siding with those courts, the Moore court required both the underlying scheme and the submission of a false claim to be pled with the particularity required by Rule 9(b). With respect to the latter, the court noted that it is not enough to portray the submission of a false claim as “merely conceivable or even likely.” Id. at 8. Instead, relators must allege with particularity “details of either a specific claim for payment that was submitted to the Government by either a medical provider or a pharmacist, or the specific details of an actual Medicaid/Medicare provider certification form signed by a particular physician.” Id. The court dismissed the claims because the relator failed to establish a connection between any alleged kickback and any actual claims for reimbursement.
As we recently reported, the Supreme Court recently expressed an interest (see related post here) in the government’s view of the pleading requirements for FCA claims. The Moore decision emphasizes not only the significance of the ongoing Circuit split on the issue, but the critical importance of Rule 9(b)—at least in some Circuits—to the pleading and defense of whistleblower FCA actions.
Posted by Scott Stein and Catherine Kim
In August, we wrote about a decision in which a court rejected the government’s theory that submission of claims for services that failed to comply with industry guidelines were “false.” Last week, another plaintiff seeking to impose FCA liability based on violation of voluntary guidelines suffered a similar defeat.
On November 14, Judge Brian Cogan of the Eastern District of New York dismissed the relator’s Fifth Amended Complaint in United States ex rel. Polansky v. Pfizer, Inc., No. 04-cv-0704 (E.D.N.Y. Nov. 14, 2012) alleging that Pfizer engaged in off-label marketing of its popular statin Lipitor in violation of the False Claims Act. The complaint alleged that Pfizer engaged in off-label marketing by encouraging physicians to prescribe Lipitor to lower the cholesterol of patients whose risk factors for heart disease and cholesterol levels did not fall within the National Cholesterol Education Program (“NCEP”) Guidelines. Specifically, the relator contended that the publication of an NCEP Guidelines chart in Lipitor’s 2005 label prohibited Pfizer from marketing the drug to physicians for use on patients who fell outside the parameters of the guidelines. Though such guidelines were not republished in the 2009 label, the relator noted that they were still referenced in the Dosage and Administration section.
Concluding that “[o]ff-guideline use does not equate to off-label[,]” the court dismissed the complaint, holding that the NCEP Guidelines did not constitute a legal restriction, but were “merely informational and advisory[.]” The court noted that had the FDA desired to limit Lipitor use to patients falling within the NCEP guidelines, it could have done so expressly. Yet the 2009 label, as read by the court, contained no restrictions regarding the appropriate patient population for Lipitor. Indeed, the only reference to the guidelines appeared in a four-word parenthetical in the label’s dosage instructions.
For these reasons, the court held that the relator’s off-label claims failed under the 2009 label. And since the relator conceded that the changes to the 2009 label from the earlier label were not substantive, the court concluded that the relator’s claims must fail under the 2005 label as well.
“The False Claims Act, even in its broadest application, was never intended to be used as a back-door regulatory regime to restrict practices that the relevant federal and state agencies have chosen not to prohibit through their regulatory authority,” wrote Judge Cogan. “I cannot accept plaintiff’s theory that what the scientists at the [NCEP] clearly intended to be advisory guidance is transformed into a legal restriction simply because the FDA has determined to pass along that advice through the label.”