United States ex rel. King v. Solvay S.A., Civil Action No. H–06–2662.

CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)
Writing for the CourtGRAY H. MILLER
Citation823 F.Supp.2d 472
PartiesUNITED STATES of America ex rel. John KING, et al., Plaintiffs, v. SOLVAY S.A., et al., Defendants.
Docket NumberCivil Action No. H–06–2662.
Decision Date12 October 2011

823 F.Supp.2d 472

UNITED STATES of America ex rel. John KING, et al., Plaintiffs,
SOLVAY S.A., et al., Defendants.

Civil Action No. H–06–2662.

United States District Court,S.D. Texas,Houston Division.

Oct. 12, 2011.

[823 F.Supp.2d 479]

Joel M. Androphy, Rachel Leeanne M. Grier, Sarah Mary Frazier, Berg & Androphy,

[823 F.Supp.2d 480]

Mary Michelle Zingaro, Office of U.S. Attorney, Houston, TX, Patrick James Keenan, Illinois Attorney General's Office, Chicago, IL, Adelina O. Berumen, State of California Attorney Generals Office, San Diego, CA, Donna R. Rohwer, Florida Attorney General's Office, Orlando, FL, Lyndsay Fuller Sanders, Nashville, TN, Mark Coffee, Office of the Texas Attorney General, Austin, TX, Ann Ackil, Assistant Attorney General, Robert Patten, Office of the Attorney General, Boston, MA, Mark Kemberling, Chief Deputy Attorney General, Las Vegas, NV, Frederick A. Duhy, Jr., Nicholas J. Diez, Assistant Attorney General, Louisiana Dept. of Justice, Baton Rouge, LA, Michael L. Parrish, Dept. of AG, Medicare Fraud Control Unit, Honolulu, HI, Jane Drummey, Office of the Attorney General, Evan C. Zoldan, Department of Justice, Washington, DC, Erica J. Bailey, Assistant Atty. General, Virginia Attorney General's Office, Medicaid Fraud Control Unit, Richmond, VA, Charles M. Richards, State Health Care Fraud Control Unit, D. Williams McNeely, Office of the Attorney General, Tucker, GA, Jessica L. Harlan, Office of Indiana Attorney General Greg Zoeller, Indianapolis, IN, Mark W. Matus, Health Care Fraud Division, Wallace T. Hart, Assistant Attorney General, Lansing, MI, Jon Ellingson, Assistant Attorney General, Helena, MT, Jeffrey S. Cahill, Senior Assistant Attorney General Director, Medicaid Fraud NH Department of Justice, Concord, NH, John Krayniak, Assistant Attorney General, Senior Counsel, Riz Dagli, Trenton, NJ, Elizabeth Staley, NM AAG Director NM AG Office, Medicaid Fraud and Elder Abuse Div. Nw 300, Albuquerque, NM, Heidi Ann Wendel, New York State Attorney General's Office, Jay Speers, Director of Special Projects-NYC Office of Attorney General-MFCU, New York, NY, Don Brown, Oklahoma Office of the Attorney General, Oklahoma City, OK, Cindy Soccio, Rhode Island of Attorney General, Providence, RI, John B. Van Hollen, State of Wisconsin, Thomas L. Storm, Wisconsin Department of Justice, Madison, WI, Shelly Marie Martin, Office of the Attorney General, Medicaid Fraud Control Unit, Baltimore, MD, Peter Coughlan, Senior Counsel, Tennessee Attorney General's, Office, Susan Purcell, for Plaintiffs.

Courtney Lynn Sauer, D. Gibson Walton, Hogan Lovells U.S. LLP, Houston, TX, Jonathan L. Diesenhaus, Jessica Lynn Ellsworth, Hogan Lovells U.S. LLP, Washington, DC, George A. Codding, Colorado Attorney General, Denver, CO, for Defendants.

GRAY H. MILLER, District Judge.

Pending before the court are (1) defendants Solvay America Inc. (“SAI”) and Solvay North America LLC's (“SNA”) motion to dismiss relators John King and Jane Doe's (collectively, “Relators”) fourth amended complaint (“4AC”) (Dkt. 121); and (2) defendant Abbott Products Inc.'s, which was formerly known as Solvay Pharmaceuticals Inc. (“SPI”), motion to dismiss Relators' 4AC (Dkt. 122). Having considered the motions and related documents, including the United States' statement of interest (Dkt. 130), as well as the applicable law, the court is of the opinion that SAI and SNA's motion to dismiss (Dkt. 121) should be GRANTED IN PART AND DENIED IN PART, and SPI's motion to dismiss (Dkt. 122) should be GRANTED IN PART AND DENIED IN PART.

I. Background

This case is about a pharmaceutical manufacturer and its affiliates that allegedly made millions of dollars by marketing three drugs—Luvox, Aceon, and AndroGel—for conditions other than the conditions for which the drugs were approved by the Food and Drug Administration

[823 F.Supp.2d 481]

(“FDA”) and by offering kickbacks to physicians who prescribed the drugs. Dkt. 114. Relators worked for SPI as district sales managers, and they were responsible for supervising sales representatives who marketed AndroGel, Luvox, and Aceon (collectively, the “Drugs at Issue”). Dkt. 114 at 150; Dkt. 122–2 at 1. Relators claim that their employment was terminated after they questioned the ethics and legality of off-label promotions and kickbacks. Dkt. 114 at 150–57. Relators thereafter brought this qui tam action against Solvay SA, SAI, SPI, SNA, Solvay Pharmaceuticals SARL, and Abbott Products, Inc.,1 on behalf of the federal government and the States of Illinois, California, Colorado, Florida, Tennessee, Texas, Delaware, Nevada, Louisiana, Hawaii, Georgia, Indiana, Michigan, Montana, New Hampshire, New Jersey, New Mexico, Oklahoma, Rhode Island, Wisconsin, and Maryland, the Commonwealths of Massachusetts and Virginia, and the District of Columbia, asserting claims for violations of the federal False Claims Act (“FCA”), as well as various state versions of those statutes.2 Dkt. 114 at 171–248. Relators also claim that Solvay conspired with physicians to promote off-label uses of the Drugs at Issue in violation of the FCA and to pay kickbacks in violation of the federal Anti–Kickback Statute (“AKS”). Id. at 169. Finally, Relators contend that Solvay retaliated against them in response to their questioning its marketing schemes by first criticizing Relators and eventually terminating their employment. Id. at 166.

A. Procedural History

On June 10, 2003, Relators filed their original complaint in the Eastern District of Pennsylvania. Dkt. 1. The Relators moved to transfer venue to the Southern District of Texas on June 26, 2006, and the court granted that motion on June 27, 2006. Dkt. 27 (Sealed). Relators filed their first amended complaint on July 15, 2008. Dkt. 38. They filed their second amended complaint on December 7, 2009. Dkt. 54. SAI and SNA filed a motion to dismiss the second amended complaint on March 19, 2010, and SPI filed a motion to dismiss the second amended complaint on the same day. Dkts. 94, 95. Relators moved to amend their complaint, and the court granted that motion and denied the motions to dismiss as moot. Dkts. 99, 102, 104. Relators filed their third amended complaint on September 15, 2010. Dkt. 111. The third amended complaint contains confidential information about physicians who prescribed the Drugs at Issue. Dkts. 112, 113. On September 30, 2010, Relators filed their fourth amended complaint, which is substantially similar to the third amended complaint except that the confidential information has been removed or altered to address the confidentiality concerns. See Dkt. 114.

On December 7, 2010, Abbott and SPI filed a motion to dismiss the 4AC in which

[823 F.Supp.2d 482]

they assert (1) the alleged violations of section 3729 of the FCA are insufficiently pled under Rules 8(a), 9(b), and 12(b)(6); (2) the alleged violation of section 3730(h) of the FCA is time-barred and fails to allege facts supporting each element of the cause of action; (3) the state qui tam claims in counts 5–33 are insufficient for the same reasons as the FCA claims and for additional state-specific reasons; and (4) count 34 requests “common fund relief” against states, which is not a cause of action. Dkt. 122–2.

On November 30, 2011, SAI and SNA filed a motion to dismiss the 4AC in which they argue that the 4AC (1) fails to allege with particularity the roles of SNA and SAI in the alleged misconduct; and (2) fails to plead any facts showing that SNA or SAI engaged in any misconduct or that they exhibited the total control and dominion of SPI that would be required for Relators to state a claim against SNA and SAI for the alleged misconduct of another corporate entity. Dkt. 121–1. SNA and SAI additionally move for dismissal of the claims against them for all of the reasons asserted in SPI's motion. Id. Both motions request prejudicial dismissal. Dkts. 121–1, 122–2.

B. Alleged Off–Label Promotion

Relators contend that Solvay inappropriately marketed the Drugs at Issue for off-label use by (1) encouraging its sales representatives to market the drugs to specifically targeted high Medicaid prescribers who Solvay deemed likely to heavily prescribe the drugs; (2) “shaping the science” through medical literature by paying influential doctors to research and write about the off-label uses that provided the most promise of profit; and (3) influencing physician speakers to promote the drugs off label. Id. at 95–107.

1. Luvox

Luvox, which is the trade name for fluvoxamine, was initially approved by the FDA in 1994 for the treatment of Obsessive Compulsive Disorder (“OCD”). Id. at 26–27. Luvox CR is an extended release version of Luvox. Id. at 30. In 2007, the FDA approved Luvox for the treatment of Social Anxiety Disorder in adults, and it approved Luvox CR for the treatment of both OCD and Social Anxiety Disorder in 2008. Id. at 30–31. Relators contend that Solvay marketed Luvox for use in treating depression, anxiety-related disorders, and other conditions of what Solvay called the “OC Spectrum,” 3 such as stand alone anxiety disorder, Tourette's syndrome, anti-social personality disorder, schizo-obsessive disorder, sexual compulsions, and ADHD, even though Luvox was not approved for the treatment of these conditions. Id. at 31. Relators also contend that Solvay downplayed important risks associated with Luvox, including drug interactions, cardiovascular risks in older patients, and an increased risk of mania in children and adolescents.4 Id. at 43–47.

[823 F.Supp.2d 483]

Relators claim that Luvox was a top-selling drug for defendants, with $6 million in Medicaid claims in Texas alone. Relators point to specific physicians in Texas who prescribed Luvox to patients for off-label use after sales representatives “pitched” these uses during sales calls. Id. at 50 & Exh. 18.

2. Aceon

Aceon, which is the trade name for perindopril, is an ACE-inhibitor 5 that was approved by the FDA for the treatment of hypertension...

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