United States ex rel. Bergman v. Laboratories, Civil Action No. 09–4264.

CourtUnited States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
Writing for the CourtJONES
Citation995 F.Supp.2d 357
PartiesUNITED STATES of America, ex rel. Amy BERGMAN, Relator, v. ABBOT LABORATORIES, Defendant.
Docket NumberCivil Action No. 09–4264.
Decision Date30 January 2014

995 F.Supp.2d 357

UNITED STATES of America, ex rel. Amy BERGMAN, Relator,

Civil Action No. 09–4264.

United States District Court,
E.D. Pennsylvania.

Jan. 30, 2014.

[995 F.Supp.2d 359]

John J. Uustal, Melissa B. Medrano, Kelley Uustal PLC, Ft. Lauderdale, FL, Margaret L. Hutchinson, Susan Dein Bricklin, U.S. Attorney's Office, Philadelphia, PA, Greg T. Kinskey, Office of the Attorney General of Texas, Austin, TX, for Relator.

Elizabeth S. Hess, Henry J. Depippo, Mark Filip, Kirkland & Ellis LLP, New York, NY, Marc J. Sonnenfeld, Dirkje Camille Frey, John C. Dodds, Morgan Lewis & Bockius, Philadelphia, PA, for Defendant.


JONES, II, District Judge.

Qui tam Relator Amy Bergman (“Relator”) brings this action against Abbott Laboratories (“Defendant”) under the False Claims Act (FCA), 31 U.S.C. § 3729 et seq., and similar state statutes. First Amended Complaint (“AC”) (Dkt. No. 18) ¶¶ 1–2. Specifically, Relator alleges that Defendant falsely and misleadingly marketed its prescription drug TriCor for off-label and medically unnecessary uses, and knowingly paid illegal kickbacks to physicians, thereby causing the submission of false claims to government healthcare systems, including Medicare, Medicaid, TRICARE, and the Federal Employee Health Benefits Program (FEHBP). See generally AC ¶¶ 130–60. Abbott moves to dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b), arguing that the uses for which Abbott marketed

[995 F.Supp.2d 360]

TriCor were reimbursable—regardless of whether those uses were off-label—and therefore Abbott did not cause the submission of false claims for reimbursement. Def's. Mot. to Dismiss (Dkt. No. 47) at 18–19. Abbott also argues that the Relator fails to plead with sufficient particularity the allegations of illegal kickbacks, that Relator tries to impose FCA liability on speech protected by the First Amendment, that the federal claims are barred by the applicable statute of limitations, and that the state law claims should be dismissed for similar reasons. Def's. Mot. to Dismiss, 19–20.

A. The Parties

Abbott Laboratories is a corporation organized under the laws of the state of Illinois and is a citizen of Illinois, but it regularly transacts business in the Eastern District of Pennsylvania. AC ¶ 30. Abbott manufactures and sells pharmaceuticals both internationally and domestically. AC ¶ 31. Abbott also maintains a national sales force which it directs from its national office in Abbott Park, Illinois. AC ¶ 31. Abbott began marketing TriCor in 1998. AC ¶ 34.

Relator was an employee of Abbott Laboratories from July 1, 1999 through January 2008. AC ¶ 35. During Relator's time at Abbott, Relator worked as a sales representative and was assigned to promote TriCor starting in January 2000 and ending in January 2008. AC ¶ 35. Relator claims she was trained and directed, along with other representatives, to promote TriCor for “off-label and medically unnecessary uses.” AC ¶ 21. At the time of the Complaint's filing Relator “resid[ed] and [was] domiciled in Boca Raton, Florida, and [was] a citizen of the State of Florida. AC ¶ 29.

B. Relator's Allegations

In the Complaint, Relator, alleges that Abbott illegally marketed its drug TriCor from January 2000 to January 2008, and possibly into the present. AC ¶ 12. These marketing activities violated the FDA's restrictions on “off-label” marketing, 21 U.S.C. § 331(a)-(b), and the Medicare and Medicaid Anti–Kickback statutes (“AKS”), 42 U.S.C. § 1320a–7b. See AC ¶ 3. As a result of Abbott's illegal marketing activities, claims for reimbursement were submitted to the Federal and various state governments, which violated the Federal False Claims Act, 31 U.S.C. § 3729, et seq., and similar state statutes.1 It is under the Federal and State False Claims Act statutes that the Relator brings twenty-eight causes of action.

TriCor is a lipid-regulating agent approved by the FDA for the treatment of hypercholesterolemia, mixed dyslipidemia, and hypertriglyceridemia. Id. ¶ 4. According to TriCor's label, the FDA approved TriCor as “an adjunctive therapy to diet” for reducing lipid and cholesterol levels in adult patients with hypercholesterolemia and mixed dyslipidemia, and for treating adult hypertriglyceridemia. AC Ex. 1 at 3. Relator details Abbott's marketing of TriCor as follows:

... Abbott improperly promoted TriCor as a first-line treatment for treating or preventing cardiac health risks in diabetic patients even though TriCor was not approved for such use by the FDA and even though TriCor had no demonstrated effect on cardiovascular morbidity and mortality in the diabetic population. Abbott also improperly promoted TriCor for use in combination with highly popular statin drugs even though TriCor

[995 F.Supp.2d 361]

was not approved for use in combination with statins by the FDA, and despite specific warnings regarding combined use with statins contained in the FDA-mandated product labelling. Abbott also made regular representations concerning the efficacy of TriCor which were contrary to the FDA required labeling, were false and misleading, and which did not represent the FDA required fair balance of information regarding uses and risks.

AC ¶ 7. Essentially, Relator claims that Abbott marketed TriCor starting in 2002 and lasting until at least 2008 for two particular off-label uses: (1) as a first-line treatment for cardiac health in diabetics, and (2) as a combination drug to be used with statins. AC ¶¶ 62, 87. Relator notes that TriCor's label includes a warning about using it in combination with statin drugs. AC ¶¶ 7, 60–62, 87. Relator also alleges that Abbott provided “unlawful payments” and “other illicit financial incentives to physicians, including for off-label and medically unnecessary uses, in a knowing violation of the Medicare and Medicaid Anti–Kickback statute.” AC ¶ 8.

Relator describes Abbott's marketing activities as consisting of encouraging sales representatives:

b. to misrepresent and withhold clinical information regarding the known risks associated with the use of TriCor, particularly in combination with statins;

c. to misrepresent and withhold clinical information regarding questions concerning the efficacy of TriCor;

d. to misrepresent that TriCor was superior to other drugs when clinical studies either established otherwise, or where there was no clinical study comparing the two drugs; and

e. to improperly use study results of other drugs to suggest that TriCor would have the same or better results.

AC ¶ 13.

Relator claims that clinical studies did not support Abbott's marketing claims about TriCor's efficacy or safety for such off-label or medically unnecessary uses. AC ¶ 14. Abbott nevertheless instructed its representatives to deemphasize risks of TriCor and emphasize its efficacy and support these claims with studies that sometimes involved drugs that were similar but not identical to TriCor. AC ¶ 15a-i. Abbott also allegedly provided its representatives with funds for honoraria and meals as rewards for physicians who prescribed or encouraged other physicians to prescribe TriCor. AC ¶ 15j. Abbott also knew that the targeted patient population of this marketing included many patients who were poor, elderly, or disabled and likely to be on government programs. AC ¶ 17. Furthermore, Abbott explained to its representatives that the diabetes market was expanding and that they should target that market. AC ¶ 67. Relator asserts that Relator has personal knowledge of these marketing practices because Relator was assigned to promote TriCor, among other drugs, and was trained to promote TriCor “for off-label and medically unnecessary uses, and to target and provide illegal financial incentives.” AC ¶ 21. In Relator's territory of Palm Beach County, Florida, Abbott instructed representatives to market TriCor as a joint therapy with statins to pharmacists, targeting those pharmacists who sought physician verification or simply refused to fill TriCor prescriptions for patients who were also taking statins. AC ¶ 115. Abbott also targeted physicians “who wrote a large number of prescriptions for statins.” AC ¶ 122. Relator includes in the Complaint lists of physicians to whom Abbott marketed TriCor for off-label and medically unnecessary uses, AC ¶ 134, physicians who prescribed TriCor

[995 F.Supp.2d 362]

for such uses, AC ¶ 135, and physicians who informed Abbott that they had prescribed TriCor to diabetics as a first-line treatment, AC ¶ 136.

Defendant allegedly concealed its off-label and/or misleading marketing practices by instructing sales representatives to not record their discussions of off-label uses in their otherwise required post-discussion “call notes.” AC ¶ 118. Defendant also instructed representatives in 2009 to return all allegedly off-label or medically unnecessary marketing materials. AC ¶ 119.

Another component of the Defendant's alleged illegal marketing scheme was the paying of illegal kickbacks to providers to induce them to prescribe TriCor. See AC ¶¶ 120–29. Defendant allegedly “made or caused others to make illegal kickbacks and prohibited remuneration to physicians in order to induce them to prescribe TriCor for Medicare, Medicaid, and other Government health insurance programs covered patients including for off-label and medically unnecessary use.” AC ¶ 120. Relator also notes that the Anti–Kickback Statute (“AKS”) also applies to the inducement of prescriptions for “on-label and medically necessary uses.” AC ¶ 121. The Defendant allegedly carried this plan out by giving its sales representatives “quarterly allowances” to arrange dinners, meetings, and other events for physicians, and to provide them with honoraria or speaker fees. See AC ¶¶ 124–27. The Defendant would allegedly target physicians who wrote high numbers of prescriptions for TriCor, or those physicians that the Defendant thought could be persuaded to write more...

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