used for their intended, on-label use. The Ninth Circuit followed its decision in U.S. ex rel. Campie v. Gilead Sciences, Inc. , and allowed the relator’s fraud on the FDA theory claim to go forward. Additionally, in U.S. ex rel. Ebu-Isaac v. Insys Therapeutics, Inc. , the district court denied BelHealth’s motion to dismiss, and granted in part and denied
Pharmaceutical and medical device companies continued to face scrutiny related to promotion of off-label uses.
in part Linden Care’s motion to dismiss an FCA lawsuit. 228 The relator alleged that BelHealth and Linden Care coordinated with each other and Insys to market and promote off-label use of Insys’ fentanyl spray, Subsys. Moreover, the relator alleged that Linden Care, directed by BelHealth, submitted claims without disclosing noncompliance with the FDA, Medicaid Act and the CSA. In denying the motion to dismiss, the district court found that the relator’s complaint sufficiently distinguished and alleged each corporate entity’s liability. Further, the district court found that the relator sufficiently alleged falsity on an implied false certification theory, consistent with Campie . The district court, however, denied the relator’s equitable claim because, according to the district court, the FCA does not authorize a private party to make equitable claims on behalf of the government. In U.S. ex rel. Kennedy v. Novo , a case involving the FCA and the Food, Drug, and Cosmetic Act (FDCA) arising from the same set of facts, the D.C. Circuit ruled that the government’s FDCA lawsuit against and settlement with Novo Nordisk did not constitute an “alternate remedy” under the FCA, 31 U.S.C. § 3730(c)(5), that a relator could recover. 229 In this matter, a relator filed a FCA complaint in October 2010 alleging, among other things, that Novo Nordisk violated the FCA by causing people to submit millions of dollars in false claims to the federal government for payment under federal healthcare programs. The whistleblower alleged that Novo Nordisk marketed its diabetes drug Victoza for use by pre-diabetics even though the FDA had not approved Victoza for the treatment of pre-diabetics, and instructed sales representatives not to mention the “unknown risk” of thyroid cancer to doctors. In July 2017, the United States filed a notice of intervention in the district court advising that the United States, Novo Nordisk and the whistleblower reached a settlement in the case, in which Novo Nordisk agreed to pay $46.5 million to resolve the matter. The district court awarded the relator 18% of the recovery, which was roughly $7.8 million plus interest. Four days later, the government filed a separate complaint against Novo Nordisk (to which the whistleblower was not a party), in the same court for violation of the FDCA. The government alleged that Novo Nordisk introduced Victoza into interstate commerce as an unlawfully “misbranded” drug because it “failed to comply with the Victoza Risk Evaluation and Mitigation Strategy” (a condition of Victoza’s FDA approval) and that Novo Nordisk provided its sales force with “certain messages and tactics” that created the “false or misleading impression” that the warning about thyroid cancer on Victoza's label was “erroneous, irrelevant, or unimportant.”
PHARMACEUTICAL AND MEDICAL DEVICE DEVELOPMENTS
Regulatory and enforcement agencies continued to monitor the activities of pharmaceutical and medical device manufacturers with heightened scrutiny.
OFF-LABEL MARKETING AND USE
Pharmaceutical and medical device companies continued to face scrutiny related to promotion of off-label uses. Two cases from the last year indicate a willingness of courts to allow FCA claims based on off- label use and marketing when the complaint sufficiently alleges noncompliance with certain FDA regulations. In Dan Abrams Co. LLC v. Medtronic, Inc. , the Ninth Circuit affirmed in part and reversed in part the district court’s dismissal of the relator’s FCA complaint. 227 The relator alleged that Medtronic marketed devices for an off-label, contraindicated use. In dismissing the claim, the Ninth Circuit confirmed that the federal government does not distinguish between on-label and off-label use in determining whether to pay claims. The relator further alleged that Medtronic defrauded the FDA into granting Subject Devices Class II clearance by misrepresenting to the FDA that the devices in question could be
228 2021 WL 3619958 (C.D. Cal. June 9, 2021). 229
U.S. ex rel. Kennedy v. Novo , 5 F.4th 47 (D.C. Cir. 2021).
227 850 F. App'x 508 (9th Cir. 2021).
HEALTHCARE FRAUD & ABUSE REVIEW 2021 BASS, BERRY & SIMS | 40
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