11th Circuit affirms dismissal of off-label pharmaceutical case for lack of particularity under FRCP 9(b)

by bvernia | December 7th, 2009

On December 4, the 11th Circuit issued an opinion in Hopper v Solvay Pharma., Inc., affirming the dismissal of a qui tam complaint because the relators had failed to plead the submission of false claims with particularity, as required by Federal Rule of Civil Procedure 9(b).

The relators were former sales representatives at Solvay Pharmaceuticals and alleged that Solvay had established an off-label marketing campaign for a prescription drug used to treat AIDS and cancer patients. As is commonplace in off-label False Claims Act cases, instead of alleging that Solvay itself submitted false claims, the relators alleged that the company’s off-label sales had caused third parties to submit false claims to the government every time they requested federal funds for an off-label prescription. The relators brought their claims under 31 U.S.C. § 3729(a)(1) (establishing liability for any person who presents or causes to be presented a false or fraudulent claim) and 31 U.S.C. § 3729(a)(2) (establishing liability for any person who knowingly makes, uses, or causes to be made or used, a false record or statement to get a false claim paid or approved).

The court held that the relators’ claims failed under both Section 3729(a)(1) and (a)(2). While the former sales representatives had provided detailed allegations of the supposed illegal marketing campaign, they had failed to allege “the existence of a single actual false claim,” to name a specific person or entity that presented a false claim, or to name dates, times, or amounts of alleged false claims. Because the relators did not provide any of this information, the court held that they had failed to plead with particularity, resulting in their allegations pursuant to Section 3729(a)(1) being deficient under Rule 9(b).

The court also held that the relators’ allegations pursuant to 31 U.S.C. § 3729(a)(2) were deficient because that provision requires the relators to show that: (1) the defendant intended the false statements to cause the government to pay or approve a false claim; and (2) that the false statement caused the government to actually pay the false claim. Here, the court held that the relators had failed to allege that Solvay’s off-label marketing campaign was intended to induce the government to pay false claims. Furthermore, as with Section 3729(a)(1), the relators had failed to show that the government had actually paid any false claims. Because there was no link between Solvay’s alleged false statements and government payments, the relators were found to have failed to plead with particularity with respect to Section 3729(a)(2).

In a footnote, the court also noted that it interpreted the retroactivity provision of the 2009 amendments to the False Claims Act (in the Fraud Enforcement and Recovery Act, the so-called Allison Engine override), to apply to “claims” submitted to the US prior to June 7, 2008, and not to cases pending on that date.

The decision reasserts that in the 11th Circuit, relators in declined health care fraud cases face a difficult hurdle in satisfying the particularity requirement. Because federal claims are filed by pharmacists who lack any knowledge of pharmaceutical companies’ alleged off-label promotion, and because even physicians writing off-label prescriptions at the alleged urging of pharma sales representatives are unlikely to know the specifics of the claim, it is difficult to how a relator could plead facts sufficient to satisfy the 11th Circuit’s “who, what, when, where, and how” requirement to meet the particularity requirements of Rule 9(b).

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