Late last month, the Government stung Novartis with separate False Claims Act (FCA) suits only days apart. On April 23rd, the Government charged that Novartis paid kickbacks to numerous pharmacies in the form of discounts and rebates in order to induce the pharmacies to switch kidney transplant patients to Novartis’ Myfortic® from rival branded and generic drugs. And while that case presents a good blog topic in its own right, it is the Government’s second case that should really make everyone stand up and take notice. In the April 26th FCA Complaint, the Government reveals that Novartis spent $65 million on 38,000 speaker programs from 2002 through 2011 in support of sales for the hypertension drugs Lotrel® and Valturna®, and the diabetes drug Starlix® and has charged that the Company’s Speaker Programs were essentially nothing but kickbacks, providing little or no educational value. The problem is that much of what happened at Novartis has happened (and may well continue to happen) elsewhere. [Read more...]
Government One-Two Punches Novartis and Exposes Dangers of Speaker Programs
Amphastar’s Qui Tam Suit Against Aventis Shows Importance of Patents
In a recent ground-breaking qui tam ruling, a California federal court denied Aventis Pharma’s (a division of Sanofi-Aventis) efforts to dismiss costly and embarrassing False Claims Act (FCA) allegations brought by “whistleblower” and generic rival Amphastar Pharmaceuticals. In its qui tam suit, Amphastar alleged that Aventis overcharged the Government by inflating prices of enoxaparin, more commonly known as Lovenox®, based on an “inequitable conduct” patent ruling from several years ago. Although Amphastar’s suit may have been motivated by financial gain, vindictiveness or both, its theory that FCA liability can be predicated on branded drug sales where the drug’s underlying patent(s) have been invalidated is worrisome and could signal a new line of attack for a relator’s bar hungry for new avenues into big pharma’s deep pockets. [Read more...]
First Circuit Slams Pfizer in Three Neurontin RICO Suits; Affirms $142 Million Verdict
Pfizer, Inc., must pay a $142 million jury verdict to Kaiser Foundation Health Plan, Inc. (“Kaiser”) for “damages” related to the off-label promotion of Neurontin®, the First Circuit ruled last week. Unfortunately, for Pfizer and other companies that have pleaded guilty to misbranding violations based on off-label promotion, the First Circuit’s ruling could spell even more trouble ahead. [Read more...]
Sanofi Braces for Another DOJ Investigation
Only a few months after agreeing to fork over $109 million in civil penalties related to charges that the Company had provided free samples of the knee injection drug, Hylagan, to physicians as kickbacks for prescription business, Sanofi-Aventis has admitted in SEC filings that it is once again under DOJ Investigation. Although the details are sketchy, Sanofi’s disclosures to the FDA about the variability in patient responses to Plavix — the blood-thinning, anti-clotting drug that had been a blockbuster for Sanofi and its marketing partner, Bristol-Myers Squibb (BMS), prior to losing patent protection in 2012 – is at the heart of the investigation. [Read more...]
Public Disclosure Bar Still Kicking!
In a recent federal district court case, U.S. District Judge Rya W. Zobel ruled in U.S. ex rel. Constance A. Conrad v. Abbott Laboratories, et. al., No. 02-11738, that because the plaintiff relator’s qui tam complaint could have been pieced together from public sources, the court lacked subject matter jurisdiction over the matter. As a result, the court granted the defendants’ motion to dismiss the complaint, breathing some life back into the public disclosure defense as a jurisdictional hurdle for would-be whistleblowers — a defense that the Affordable Care Act of 2010 (“ACA”) seemed to seriously restrict. [Read more...]
Government Takes A “Pass” on the First Amendment
Last week it was reported across the internet that the FDA would not seek to appeal the Second Circuit’s majority decision in U.S. v. Caronia to the Supreme Court. Admitedly, in the wake of Caronia, I and other commentators were hopeful that the Government would seek a rehearing en banc — the Government even asked for an extension on the deadline to file the petition — and ultimately oral argument before the Supreme Court on the limits of its ability to regulate manufacturer speech. However, that collective hope waned once the Government passed on an en banc rehearing. Indeed, it soon became obvious that the ”best” course for the Government would be to avoid the risk of further adverse rulings, renew its campaign against weak-kneed manufacturers in off-label investigations outside the boundaries of the Second Circuit and focus its Supreme Court lawyering in other high-stakes areas, like “reverse payments” in patent Hatch-Waxman settlements. If the Government follows through on its reported January 22nd “statement” – no official statement was ever published to this writer’s knowledge – and fails to appeal Caronia to the Supreme Court by the March 4, 2013 deadline, the answer to the question ”what now?” becomes dicey for manufacturers. [Read more...]
Caronia Decided — First Amendment Protects Off-Label Speech!
It finally happened. After two long years (plus one day) since oral argument, the U.S. Court of Appeals for the Second Circuit in a 2-1 split vote decided U.S. v. Caronia, tossing Alfred Caronia’s misdemeanor conviction for engaging in off-label promotion. The former Orphan/Jazz Pharmaceuticals sales rep had argued that in promoting Orphan’s Xyrem for unapproved uses, he did not speak untruthfully, inaccurately or in a misleading manner and that his conviction under 21 U.S.C. Sections 331(a) and (a)(1), therefore, violated his right of free speech under the First Amendment. Fortunately for Caronia — and perhaps even more fortunately for pharmaceutical and medical device manufacturers, battered by billions in fines – two federal circuit judges agreed. Unfortunately, the fight is probably far from over. [Read more...]
Government Gets Big Win Against Abbott; On Verge of Silencing First Amendment Challenge
Although we are only one month into May, it has been a tough month for the pharmaceutical industry and those of us who are still looking to see if either the Second Circuit in U.S. v Caronia or the D.C. District Court in Par Pharmaceutical v. U.S. et al., will shed any light on whether manuafacturers have a First Amendment right to discuss a product’s unapproved uses with healthcare professionals. [Read more...]
The Park Doctrine: All Bark And No Bite
For about two years the Government has threatened to revive the “Responsible Corporate Officer” (RCO) Doctrine, or as it is more commonly known, the “Park Doctrine.” Based on the Supreme Court’s decision in United States v Park, 421 U.S. 658 (1975), the Park Doctrine stands for the proposition that a corporate officer who is in a position of authority to prevent or correct a violation of the Food Drug and Cosmetic Act (FDCA), but who fails to do so, may be convicted of a misdemeanor by virtue of such authority even if the officer was unaware of the violation. Although the Government has made a lot of noise about going after high-profile C-suite executives for misconduct committed by their underlings, no convictions have been obtained and not much in the way of cases has been brought. Given the absence of conscious wrongdoing by these so-called “head in the sand” executives and the low bar the Government has set for itself, what accounts for the Government’s lack of success in putting some bite into the Park Doctrine bark? Quite simply, a sense of fair play. [Read more...]
Feds “Stryke[ ]” out Again
There is little argument that the Government has been very successful over the past 8 or so years in wringing billions in fines from pharmaceutical and medical device companies for paying kickbacks and promoting off-label. But what about individuals? After all, corporations are run by people. Marketing plans are developed by people. And sales, in one form or another, are made by people. So, if the Government can fine and impose multi-year corporate integrity agreements (a.k.a. ”CIA’s”) on companies, then the Feds should be able to hold the people responsible for those awful schemes accountable too, right? Well, no, but not for lack of trying. [Read more...]
