U.S. ex rel. Rost v. Pfizer Inc.
| Decision Date | 30 August 2006 |
| Docket Number | Civil Action No. 03-11084-JLT. |
| Citation | 446 F.Supp.2d 6 |
| Parties | UNITED STATES of America ex rel. Dr. Peter ROST, Plaintiff, v. PFIZER INC. and Pharmacia Corporation, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Sara M. Bloom, United States Attorney's Office, Boston, MA, Hilary B. Taylor, Susan A. Friery, Kreindler & Kreindler LLP, New York, NY, Mark I. Labaton, Kreindler & Kreindler LLP, Los Angeles, CA, for Plaintiffs.
Ethan M. Posner, Geoffrey E. Hobart, Rebecca Rohr, Covington & Burling, Washington, DC, for Defendants.
Plaintiff-Relator, Dr. Peter Rost, ("Plaintiff") brings this qui tam action against Defendants Pfizer, Inc. and Pharmacia Corporation (collectively "Defendants"), alleging violations of the Federal False Claims Act1 ("FCA") and similar state statutes.2 Plaintiff asserts that Defendants, through illegal, off-label marketing of the drug Genotropin, knowingly caused the submission of false claims to federal and state health insurance programs. Defendants now move to dismiss Plaintiff's complaint, arguing that this court lacks subject matter jurisdiction and that Plaintiffs complaint fails to allege fraud with sufficient particularity. Plaintiff has moved for leave to take jurisdictional discovery and to stay any ruling on Defendants' Motion to Dismiss pending the completion of that discovery. For the reasons discussed below, Defendants' Motion to Dismiss is ALLOWED and Plaintiffs Motion for Leave to Take Jurisdictional Discovery and To Stay a Ruling on Defendants' Motion to Dismiss Pending Completion of Discovery is DENIED.
Defendant Pfizer is a corporation principally engaged in the manufacture and sale of pharmaceuticals.3 Defendant Pharmacia Corporation, until early 2003, was also engaged in the manufacture and sale of pharmaceuticals. In April 2003, Pfizer acquired Pharmacia and, in doing so, assumed all of Pharmacia's rights and liabilities. Plaintiff, Dr. Peter Rost, is a physician who has worked in the pharmaceutical industry for approximately 15 years. In June 2001, Pharmacia hired Plaintiff as its vice president in charge of it's Endocrine Care Unit. In his capacity as vice president, Plaintiff oversaw the worldwide marketing of the drug Genotropin, which is at the heart of this controversy. Plaintiff, however, had no role in the day-to-day marketing or sales of Genotropin.
Under the Food, Drug, and Cosmetics Act ("FDCA"), pharmaceutical drug companies cannot distribute a drug in interstate commerce unless the Food and Drug Administration ("FDA") has approved its use.4 After extensive testing, the FDA will approve a pharmaceutical drug for one or more specific uses and will establish a recommended dosage for those uses. Use of an approved drug for any purposes other than those specifically approved by the FDA is referred to as an "off-label" use. The FDCA does not prohibit physicians from prescribing an FDA approved drug for unapproved off-label uses. The FDCA does, however, prohibit drug manufacturers from marketing or promoting a drug for off-label uses.5 As a general rule, federal and state health care programs, such as Medicaid, do not reimburse the cost of drugs prescribed for off-label uses.
The present controversy arises from Defendants' off-label marketing and distribution of the drug Genotropin, which occurred between 1997 and 2003. Genotropin is a recombinant, or man made, human growth hormone. The FDA has approved Genotropin as a prescription drug to treat a limited range of hormonal deficiencies in children and adults. The FDA has not approved Genotropin as a treatment for short children without hormonal deficiencies or as an anti-aging treatment for adults.
In 1997, Defendant Pharmacia began promoting and marketing Genotropin for off-label uses, such as to increase growth in short children and to delay the aging process in adults. Pharmacia's promotional activities included giving bribes, kickbacks, and other incentives to doctors to prescribe Genotropin for off-label uses, and providing similar payments to wholesale drug distributors to recommend Genotropin for off-label uses. Pharmacia also compensated its sales representatives for every new Genotropin patient, regardless of whether the drug was prescribed for an FDA approved or an off-label use. As a result of Pharmacia's promotional campaign, Defendants received significant revenues from sales of Genotropin. Between 1997 and 2003, Defendants generated more than $550 million from the sale of Genotropin in the United States alone. During this time period, approximately sixty percent of all adult sales and twenty-five percent of all pediatric sales of Genotropin were for off-label uses.
Plaintiff first learned of Pharmacia's off-label marketing of Genotropin through his day-to-day employment. Plaintiff immediately raised his concerns with his superiors. Pharmacia, as a result, initiated an internal investigation, which ultimately reduced Pharmacia's off-label promotional activities. Plaintiff, however, continued to monitor the marketing and distribution of Genotropin and, despite internal information to the contrary, Plaintiff discovered that Pharmacia continued to promote Genotropin for off-label uses and persisted in sending kickbacks to physicians and distributors.
In July 2002, Pfizer announced plans to merge with Pharmacia, under which Pharmacia would become a subsidiary of Pfizer. In late 2002, Plaintiff raised his concerns about the marketing of Genotropin with Pfizer executives. Plaintiff even provided Pfizer representatives with evidence of Pharmacia's extensive off-label marketing campaign.
On April 16, 2003, Pfizer completed its acquisition of Pharmacia. Pfizer, in response to Plaintiffs information, immediately began its own investigation into the off-label marketing of Genotropin. On May 16, 2003, Pfizer voluntarily contacted senior officials at the FDA and the Office of Inspector General ("OIG") of the Department of Health and Human Services to disclose the issues surrounding their off-label marketing of Genotropin. On May 19, 2003, Pfizer sent a detailed letter to the FDA addressing the same issues. In this letter, Pfizer disclosed Pharmacia's off-label marketing campaign and explained the corrective action that Pharmacia, and later Pfizer, took to remedy the misconduct. Pfizer also sent the FDA a spreadsheet listing various sales to doctors who prescribed Genotropin for off-label uses.
On May 21, 2003, Pfizer representatives met with senior OIG officials. At this meeting, Pfizer disclosed more information regarding the off-label promotion and distribution of Genotropin, including more evidence of unlawful payments to physicians. The OIG assigned an investigative agent to the case and took the matter under advisement. On June 3, 2003, Pfizer sent another letter to OIG, which provided further detail regarding Genotropin. Pfizer also sent a copy of this letter to the Department of Justice ("DOJ").
On June 3, 2003, Plaintiff informed the United States Attorney for the District of Massachusetts that he was preparing to file a qui tam action alleging fraud relating to Defendants' off-label marketing of Genotropin. On June 4, 2003, Plaintiff delivered a copy of his complaint to the U.S. Attorney's office and, on June 5, 2003, he filed his complaint. Plaintiff's complaint remained under seal while the government investigated Plaintiff's allegations and evaluated whether to intervene in the action. On. November 8, 2005 the United States Government, after almost three years of investigation, declined to intervene in the case.
In his complaint, Plaintiff alleges that Defendants illegally marketed and distributed Genotropin for off-label uses. Defendants' conduct, Plaintiff further argues, caused the submission of false claims,6 seeking reimbursement for the cost of off-label prescriptions of Genotropin, to federal and state health care programs. Plaintiff contends that the submission of such claims violated the federal False Claims Act and similar state statutes.
Defendants first move to dismiss Plaintiffs complaint for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure.7 In considering a Rule 12(b)(1) motion to dismiss, this court must "construe the [c]omplaint liberally and treat all well-pleaded facts as true, according the plaintiff the benefit of all reasonable inferences."8 The court may also consider extrinsic materials, which include exhibits attached to the pleadings and any evidentiary materials submitted by the parties.9 In doing so, this court does not convert Defendants' motion to dismiss into a motion for summary judgment.10 "'[T]he party invoking the jurisdiction of a federal court carries the burden of proving its existence.'"11
The False Claims Act prohibits the submission of false or fraudulent claims for payment to the federal government.12 The FCA, in relevant part, imposes liability on any person who "knowingly presents, or causes to be presented, to ... the United States Government . . . a false or fraudulent claim for payment or approval," or who "knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government."13 Liability under the FCA, therefore, attaches only to the submission of a fraudulent claim for payment.14 Liability does not attach as a result of the underlying fraudulent conduct or to the government's actual payment of particular false claims.15 The fundamental element of a FCA violation, therefore, is the existence of an actual false claim that has been presented to the government.16
The FCA authorizes private individuals to bring civil actions on behalf of the United States Government and on behalf of the private plaintiff himself...
To continue reading
Request your trial
-
U.S. v. Smith & Nephew Inc.
...the Seventh Circuit's standard. See Rost, 507 F.3d at 731 (adopting in pertinent part the reasoning of United States ex rel. Rost v. Pfizer, Inc., 446 F.Supp.2d 6, 16–18 (D.Mass.2006)). 11. The court in Bledsoe II also left open the possibility that Rule 9(b) should be applied flexibly “whe......
-
United States ex rel. Kroening v. Forest Pharm., Inc.
...Pac. Health , 490 F.Supp.2d 1062, 1072 (D.Haw.2007), aff'd , 343 Fed.Appx. 279 (9th Cir.2009) (Hawaii FCA); U.S. ex rel. Rost v. Pfizer Inc. , 446 F.Supp.2d 6, 12 n. 13 (D.Mass.2006), aff'd in part and vacated in part , 507 F.3d 720 (1st Cir.2007) (Delaware FCA, Tennessee Medicaid FCA, Texa......
-
US EX REL. HUTCHESON v. Blackstone Medical, Inc.
...only where the relator has actually derived from that disclosure the allegations upon which his qui tam action is based." 446 F.Supp.2d 6, 19 (D.Mass.2006) (quoting United States ex rel. Siller v. Becton Dickinson & Co., 21 F.3d 1339, 1348 (4th This Court holds that the "original source" ex......
-
In re Pharmaceutical Ind. Avg. Whole. Price Lit.
...for purposes of § 3730(e)(4)(A)."). Three courts in this district have taken the minority view. See United States ex rel. Rost v. Pfizer Inc., 446 F.Supp.2d 6, 19 (D.Mass.2006) (Tauro, J.) ("This court adopts the minority rule and holds that a qui tarn action is `based upon' a public disclo......