United States ex rel. Petratos v. Genentech, Inc.

• Decision Date: 29 October 2015
• Docket Number: Civil Action No. 11–3691
• Citation: 141 F.Supp.3d 311
• Parties: United States, et al. ex rel. Gerasimos Petratos, Plaintiff, v. Genentech, Inc., et al., Defendants.
• Court: U.S. District Court — District of New Jersey

141 F.Supp.3d 311

United States, et al. ex rel. Gerasimos Petratos, Plaintiff,

v.Genentech, Inc., et al., Defendants.

Civil Action No. 11–3691

United States District Court, D. New Jersey.

Signed October 29, 2015

Michael John Debenedictis, Debenedictis & Debenedictis LLC, Haddonfield, NJ, Efthimios Parasidis, Columbus, OH, Joan M. Burke, State of New Jersey/MFCU, Trenton, NJ, for Plaintiff.

Lawrence S. Lustberg, Amanda B. Protess, Gibbons, PC, Newark, NJ, for Defendants.

OPINION

ARLEO

, United States District Judge

Before the Court are Defendant Genentech, Inc.'s and Defendant Hoffman La–Roche Inc.'s motions to dismiss Plaintiff Gerasimos Petratos' Amended Complaint. Dkt. Nos. 68, 70. On September 3, 2015, the Court heard oral argument. This case concerns whether the False Claims Act can be extended to cover wrongful behavior that does not lead to a false claim. It cannot, so Plaintiff's Amended Complaint must be dismissed.

I. FACTS

This is a qui tam action brought by relator Gerasimos Petratos ("Plaintiff") on behalf of the United States government and various state governments. Plaintiff was previously Global Head of Healthcare Data Analytics for Defendants, which include Genentech, Inc., F. Hoffman La Roche Ltd., Hoffman–La Roche Inc., and Roche Holding Ltd. Dkt. No. 77, Am. Compl. (Corrected) ¶ 24.¹

Defendants own Avastin

, one of the world's highest-grossing cancer drugs with 2010 revenues estimated at $6.5 billion. Am. Compl. ¶ 5. Avastin is a monoclonal antibody cancer drug that limits the growth of tumors by preventing the growth of blood vessels that feed tumors. Id. ¶ 89. In February 2004, Avastin received approval from the Food and Drug Administration ("FDA") as a treatment in combination with chemotherapy for patients with metastatic colorectal cancer. Id. ¶ 90. In December 2007, the Oncologic Drugs Advisory Committee ("ODAC") of the FDA recommended denial of Avastin for metastatic breast cancer, highlighting a number of concerns with the clinical trial data provided by Defendants. In December 2007, however, the FDA approved Avastin for treatment for patients with metastatic breast cancer. Id. ¶¶ 91–95. This approval was conditioned on completion of adequate studies showing the drug's clinical benefit. Id. ¶ 97. By December 2010, subsequent clinical studies showed no extension of lifespan and serious side effects to Avastin, so the FDA removed breast cancer as an approved use. Id. ¶ 99. Defendants appealed that decision, but the FDA removed the metastatic breast cancer indication from Avastin's label in 2011. Id. ¶¶ 99–100, 229.

Avastin

remains FDA-approved for treatment of metastatic colorectal cancer, non-squamous non-small cell lung cancer, glioblastoma, and metastatic renal cell carcinoma. Id. ¶ 101. Avastin is also used for a variety of uses not approved by the FDA, known as "off-label uses." Id. ¶ 102. These treatments include renal (kidney) cancer, ovarian cancer, pancreatic cancer, and various eye diseases such as macular degeneration. Id. Side-effects from Avastin can be serious, stemming from hypertension to kidney failure. Id. ¶ 103.

Plaintiff alleges that Defendants knowingly based regulatory submissions on patient databases that contained inadequate information about Avastin's

real-world risks and did not use electronic medical records which would have better answered questions about Avastin safety. Id. ¶ 125. In February 2010, Plaintiff recommended use of a different database to Defendants, but no action was taken. Id. ¶¶ 134–39. The different database, Plaintiff alleges, better integrated both inpatient and outpatient data, and so more accurately reflected actual Avastin side effects. Id. ¶ 141–42. Certain of Defendants' employees recognized that the database proposed by Plaintiff was more relevant than those used by Defendants, but declined to examine it because there was too much "business risk." Id. ¶ 146. In April 2010, Plaintiff met with higher level executives for Defendants, including the head of product development and the head of regulatory affairs, requesting use of a different database to study Avastin side effects. Id. ¶ 150. The executives declined to act and Plaintiff subsequently received a scathing email from his supervisor. Id. ¶ 152. At this point, no health authority had questioned the company's data sources. Id. ¶¶ 139, 147.

In June 2010, an independent study found a dose-dependent relationship for proteinuria

occurrence in Avastin patients. Id. ¶ 175. Dr. Richard Lafayette, a doctor who has significant influence in prescription practices, also known as a "Key Opinion Leader," subsequently requested information from Defendants concerning the incidence of proteinuria in Avastin patients.

Id. ¶ 176. Defendants did not provide that data to Dr. Lafayette, claiming it was not available. Id. ¶ 178. Plaintiff claims that Dr. Lafayette would likely have changed his opinion on the risk-benefit profile for Avastin

if he was given more complete information, which would have had an impact on prescribing habits of oncologists. Id. ¶ 221.

In January 2011, the Center for Medicare and Medicare Services ("CMS"), the agency responsible for reimbursement decision for Medicare, asked Defendants to provide it with information to determine appropriate reimbursement from the federal government. Id. ¶ 21. Defendants allegedly supplied data which projected significantly reduced annual costs associated with the drug's side effects across the patient population. Id.

Plaintiff alleges that Defendants' data deficiencies were the result of an intentional campaign to maximize profits by suppressing clinical and epidemiological information. Id. ¶¶ 12, 182–88. Data deficiencies allegedly led to underreporting of side effects facing at-risk patients, including higher rates of various adverse events: cardiac arrhythmia

, renal failure, pulmonary and cranial hemorrhages, and microangiopathic haemolytic anaemia. Id. ¶ 16.

Plaintiff challenges a variety of components of the FDA-approved label for Avastin

, including dose dependency, id. ¶ 180, and proteinuria, id. ¶¶ 216–17. Plaintiff further claims that a variety of statements made to the FDA were misleading. Id. ¶¶ 213–25. Defendants also allegedly failed to report adverse events promptly during clinical trials. Id. ¶¶ 167–70.

Plaintiff also alleges generally that if Defendants revealed complete information about Avastin

, many doctors would have more carefully evaluated their patients to determine if Avastin use was appropriate. Id. ¶ 19. One physician, Dr. Mark Levin, confirmed that had he known of the risks of Avastin, he would not have prescribed it for some of his patients. Id. ¶ 240–42. Plaintiff also argues that federal and state governments would have reimbursed for fewer Avastin indications, for lower dosages, or not at all. Id. ¶ 19. Plaintiff claims hundreds of millions of dollars in damages. Id. ¶ 20.

Plaintiff's initial complaint was filed on June 27, 2011. Dkt. No. 1. Following a motion to dismiss, the complaint was dismissed in part on January 29, 2014, by the Hon. Dennis M. Cavanaugh, U.S.D.J. Dkt. No. 43. The Court subsequently granted Plaintiff's motion to amend its complaint, Dkt. No. 56, and the Amended Complaint was filed on December 22, 2014. Dkt. No. 58.² The motions to dismiss followed.

Plaintiff's Amended Complaint includes four federal causes of action: (1) presentation of false claims in violation of 31 U.S.C. § 3729(a)(1)(A)

; (2) knowingly making a false statement material to a false claim in violation of 31 U.S.C. § 3729(a)(1)(B) ; (3) making or using a false statement to avoid an obligation to refund in violation of 31 U.S.C. § 3729(a)(1)(G) ; and (4) conspiracy in violation of 31 U.S.C. § 3729(a)(1)(C). Plaintiff also includes separate claims under state law analogues in California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Virginia, Wisconsin, and Washington, D.C.

II. LEGAL STANDARD

In order to state a claim for violation of the False Claims Act, 31 U.S.C. 3729(a)(1)

("FCA"), a plaintiff must provide facts sufficient to plausibly show that "(1) the defendant presented or caused to be presented to an agent of the United States a claim for payment; (2) the claim was false or fraudulent; and (3) the defendant knew the claim was false or fraudulent." United States ex rel. Schmidt v. Zimmer, Inc., 386 F.3d 235, 242 (3d Cir.2004). "A private individual, otherwise known as a relator, may bring a civil action in the name of the United States to enforce this provision of the FCA and may share a percentage of any recovery resulting from the suit." Wilkins v. United Health Group, Inc., 659 F.3d 295, 305 (3d Cir.2011) ; 31 U.S.C. § 3730(b), (d).

An FCA claim must satisfy the pleading requirements of Federal Rule of Civil Procedure 9(b)

. See Foglia v. Renal Ventures Mgmt., LLC, 754 F.3d 153, 157 (3d Cir.2014). The allegations of fraud "must provide particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted." Id. at 156–57. "Describing a mere opportunity for fraud will not suffice." Id. at 159.

Claims under the FCA may be factually or legally false. Id.

"A claim is factually false where a claimant misrepresents what goods or services it provided to the Government and a claim is legally false when the claimant knowingly falsely certifies that it has complied with a statute or regulation the compliance with which is a condition for Government payment." Id.

Legally false claims are based on a false certification theory of liability. See Rodri g uez v. Our Lady of Lourdes Med. Ctr., 552 F.3d 297, 303 (3d Cir.2008)

, overruled in part on other grounds by United States ex rel. Eisenstein v. City of New York, 556 U.S. 928, 129 S.Ct. 2230, 173 L.Ed.2d...