by Ben Vernia | January 28th, 2013
On January 11, in U.S. ex rel. Nathan v. Takeda Pharm., North Am., Inc., the Court of Appeals for the Fourth Circuit affirmed the dismissal of a qui tam relator’s suit against a pharmaceutical company for off-label promotion of its drug, Kapidex.
The Court first described the standard of particularity required under Fed. R. Civ. P. 9(b), and in the course of doing so rejected the relator’s argument that he could allege a fraudulent scheme in the absence of asserting that a specific false claim was submitted to the government. The Court wrote
Applying these principles, we hold that when a defendant’s actions, as alleged and as reasonably inferred from the allegations, could have led, but need not necessarily have led, to the submission of false claims, a relator must allege with particularity that specific false claims actually were presented to the government for payment. . . .
In reaching this conclusion, we acknowledge the practical challenges that a relator may face in case such as the present one, in which a relator may not have independent access to records such as prescription invoices, and where privacy laws may pose a barrier to obtaining such information without court involvement. Nevertheless, our pleading requirements do not permit a relator to bring an action without pleading facts that support all the elements of a claim
Applying this principle to the relator’s allegations, the Court found each of them to fall short:
- Promotion to rheumatologists - The relator alleged that the company’s promotion to rheumatologists (who do not treat the conditions for which Kapidex was approved), but the Fourth Circuit found that he had failed to allege that these doctors wrote off-label prescriptions for the drug.
- 60 mg sampling of primary care physicians - The relator alleged that the company provided 60 mg samples of the drug to primary care physicians, who do not generally treat the condition for which the drug was approved in that dose, and he identified 98 prescriptions from these doctors. The relator had only argued that it was likely that the physicians’ prescriptions were for 60 mg doses (and, therefore, were likely off-label), the Court noted, and in addition, primary care physicians could write prescriptions for on-label uses, even if they were unlikely to see such conditions.
- Large numbers of prescriptions - The Fourth Circuit found to be inadequate the relator’s assertion that 9000 prescriptions were written for the drug in certain years in two sales districts, because he failed to allege facts concerning these prescriptions’ circumstances.
- Physician statements - The relator had relied on affidavits submitted by two gastroenterologists and one primary care physician, that they had prescribed 60 mg doses of the drug to Medicare patients for an off-label condition (at that dose), because the company’s sampling practices left them unaware of the smaller dose. The Court concluded that the allegation fell short because it contained no details of the prescriptions, and failed to allege that the Medicare patients filled the prescriptions or that corresponding claims were submitted to the government. (The Court specifically disagreed with the relator that it should infer from the writing of a prescription to a federal health care program beneficiary that it was filled and a claim submitted to the government.)
Finally, the Fourth Circuit affirmed the district court’s refusal to grant the relator leave to amend his complaint.