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. 

Patent and Antitrust Litigation Background

Sales of branded drug Lovenox®, an anti-coagulant used to prevent potentially fatal blood clot formation, are at the center of the running feud between the two companies.  The story begins when Amphastar filed an Abbreviated New Drug Application (“ANDA”) with the FDA in 2003 for the right to manufacture generic Lovenox® and, through a Par IV letter, asserted that Aventis’s “618″ patent for Lovenox® was invalid, unenforceable or not infringed.  Aventis responded with a patent infringement suit, triggering a 30 month stay in FDA approval of Amphastar’s ANDA under the Hatch-Waxman statutory framework.   Amphastar countered by asserting a defense of “inequitable conduct” and tacking on an antitrust counterclaim against Aventis.  Based on discovery in the patent suit, the district court granted summary judgment on the inequitable conduct defense, essentially finding that Aventis had concealed material information from the U.S.P.T.O. patent examiner in obtaining the patent.  On appeal, the Federal Circuit reversed and remanded, directing the district court to find whether Amphastar could prove by clear and convincing evidence that Aventis intended to deceive the examiner.  Following a bench trial, the district court determined that Amphastar had proven intent to deceive by clear and convincing evidence and invalidated Aventis’s Lovenox® patent on inequitable conduct grounds.  The Federal Circuit affirmed the decision in May, 2008.  See Aventis Pharma S.A. v. Amphastar Pharm., Inc., 525 F.3d 1334 (Fed. Cir. 2008).

In most cases, the story and battle between the companies would have ended there with Amphastar happily marketing generic Lovenox®.  But not this time.  During the course of the litigation over Aventis’s conduct before the U.S.P.T.O., Amphastar’s antitrust counterclaim was stayed.  Once the Federal Circuit affirmed the district court’s bench trial ruling and denied Aventis’s petition for rehearing en banc, the stay was lifted and Amphastar pursued its antitrust claim with renewed vigor.  Aventis then filed a motion to dismiss the claim, which the district court granted in February, 2009, on the grounds that Aventis’s patent filing activities before the U.S.P.T.O. were immunized from antitrust liability under the Noerr-Pennington doctrine and/or because Amphastar had failed to allege an “antitrust injury.”

The Qui Tam Complaint

Unbeknownst to Aventis, once it filed its motion to dismiss the antitrust counterclaim, Amphastar filed its FCA qui tam action under seal in January, 2009.  That complaint was unsealed in October, 2011, when the Government declined to intervene in the suit.  In essence, Amphastar alleged that Aventis had 1) made false statements to the U.S.P.T.O. in prosecuting two Lovenox® patents; 2) improperly listed the patents in the Orange Book; and 3) engaged in baseless patent litigation with Amphastar, thereby extending its wrongful monopoly by another 30 months.  Following arguments on Aventis’s motion to dismiss the suit, the district court held that, although Amphastar’s complaint was based on patent litigation that had been publicly disclosed, Amphastar was the “original source” of the FCA allegations; Amphastar’s FCA allegations were not the same, recylced antitrust allegations that had been previously dismissed; in any case, Noerr-Pennington did not immunize knowing false statements to the U.S.P.T.O.; and, under the 2009 Fraud Enforcement and Recovery Act (“FERA”), “intent to defraud” was no longer an essential element of a FCA claim.   Nonetheless, the court granted Aventis’s motion to dismiss because Amphastar’s claims lacked particularity that Aventis’s false claims were paid or approved by the Government, but gave Amphastar leave to amend its complaint.

On November 30, 2012, Amphastar filed an amended qui tam complaint.   In its new complaint, Amphastar once again alleged that Aventis “was able to illegally obtain monopoly power over enoxaparin in the United States market through its false representations and omissions to the Patent Office …”  However, it further alleged that, according to “IMS reports . . . from 1993 until 2002, the United States purchased 6,298,000 units of Lovenox® from Aventis . . . totaling $102,655,000.00 [and] that from 2003 until the third quarter of 2012, the government purchased 22,497,000 units of Lovenox® from Aventis . . . totaling $470,559,000.00 . . . [all resulting in] the United States federal government pa[ying] false claims totaling at least $573,214,000.00.”  Although Aventis filed a motion to dismiss the amended complaint, arguing that the new allegations were still inadequately pleaded, last month the district court denied the motion, allowing Amphastar’s qui tam FCA suit to proceed.


Although the real FCA litigation between the companies has only just begun, the case raises several important issues that warrant discussion now and close observation as the litigation unfolds. First, there is the startling precedent of one pharmaceutical company, albeit a generic manufacturer, filing a FCA qui tam suit on behalf of the Federal and State Governments against a branded competitor, regardless of the basis for the suit.  While it is unusual enough for FCA whistleblowers not to come from the ranks of the defendant company, it is truly rare for the “relator” to be a rival drug company.  In this case Amphastar is looking to garner up to 30% of any recovery from Aventis – about $170 million even without trebling.  Second, although the Government declined to intervene in Amphastar’s suit in 2011, it filed an amicus brief opposing Aventis’s motion to dismiss, specifically arguing that any false statement Aventis made to the U.S.P.T.O., which resulted in the granting of patent protection for Lovenox®, could provide a basis for FCA liability.

What is particularly significant is that the Government’s amicus arguments were not limited to the facts of this case.  In essence, the Government’s position is that it reserves the right to argue that an issued drug patent that is later invalidated on inequitable conduct grounds means that federal healthcare programs like Medicare and Medicaid paid fraudulent and artificially inflated prices for the previoulsy patent-protected drug and that those inflated payments are subject to recovery under the FCA.  Although inequitable conduct is harder to prove after the Federal Circuit’s ruling in Therasense Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed Cir. 2011) (en banc), than when Amphastar got its patent win over Aventis in 2008, what is troubling about this case and the Government’s broad amicus statements is that  FCA liability can be predicated on a drug patent that is invalidated on any grounds, including for example, “obviousness” or “inherent anticipation.”  Moreover, it is clear from the district court’s opinions on both motions to dismiss that Aventis’s FCA liability is not limited to the 30 month period following its patent infringement suit against Amphastar, but from the moment it launched Lovenox® under the old, invalidated patent.

While all this might sound crazy, regardless of what happens in Amphastar’s suit against Aventis, don’t be surprised to see the relator’s bar boning up on patent law.


About José P Sierra

José Sierra is a partner at Laredo & Smith, LLP, in Boston, which provides respected advice and creative representation in business litigation, white collar criminal defense, government investigations, corporate compliance, and business and employment law. Prior to joining the Firm, Mr. Sierra was a principal at Fish & Richardson. Previously, Mr. Sierra was senior vice president, chief compliance and ethics officer for Sepracor Inc., and Kos Pharmaceuticals, and was legal director at Schering-Plough Corporation, and an assistant U.S. attorney in the Newark, NJ U.S. Attorney's Office.

Mr. Sierra's practice focuses on white collar criminal defense, government investigations and corporate compliance. Contact him at 617-443-1100 or via .

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