United States ex rel. Boise v. Cephalon, Inc.
| Decision Date | 09 October 2014 |
| Docket Number | civil action no. 08-287 |
| Court | U.S. District Court — Eastern District of Pennsylvania |
| Parties | UNITED STATES OF AMERICA ex rel. BRUCE BOISE, et al. v. CEPHALON, INC., et al. |
MEMORANDUM
Plaintiffs Bruce Boise, Keith Dufour and Andrew Augustine bring this action against defendants Cephalon, Inc. and John Does #1-100 to recover damages and civil penalties on behalf of the United States as qui tarn relators pursuant to the False Claims Act, 31 U.S.C. §§ 3729, et. seq. (FCA) and analogous state laws. This matter comes before me on Cephalon's motion to dismiss plaintiffs' Fentora claims in their second amended complaint for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) (Dkt. No. 77) and plaintiffs' response (Dkt. No. 88). Defendant contends that 31 U.S.C. § 3730(e)(4)(A) bars plaintiffs' assertion of the Fentora claims because the allegations those claims are based upon were publicly disclosed in a related complaint filed in Cestra v. Cephalon, Inc., No. 14-01842 (E.D. Pa.). The Cestra action was originally filed in the Southern District of New York on August 30, 2010. See Cestra v. Cephalon. Inc., No. 14-091842, Dkt. No. 1-2. On March 27, 2014, Judge Stein transferred the Cestra action to me. See id., Dkt. No. 1. For the reasons that follow, I will grant Cephalon's motion.
In this action, plaintiffs allege that defendants violated the FCA by, inter alia, engaging in the off-label, meaning unapproved by the FDA, promotion of various medications. At issue hereare plaintiffs' claims with regard to defendants' alleged off-label promotion of the medication Fentora. Fentora is a potent pain reliever. See Dkt. No. 69 at ¶ 266. In 2006, the FDA approved Fentora for the treatment of breakthrough cancer pain, meaning spikes in pain that cannot be controlled with normal pain medication, in adult patients who are opioid tolerant. See id. at ¶ 263. Plaintiffs allege that counter to the FDA's approval, defendants promoted Fentora for uses other than breakthrough cancer pain. See id. at ¶ 312. Plaintiffs allege that defendants' off-label promotion of Fentora caused the submission of false claims for reimbursement from various government programs because those programs only reimburse for FDA approved uses of medications. See id. at ¶ 419-26. Plaintiffs' detailed claims and allegations and a discussion of the complaints at issue in Cephalon's motion to dismiss pursuant to § 3730(e)(4) follow.
On January 3, 2008, Boise filed his original complaint in this action. See Dkt. No. 1. On January 14, 2010, Boise filed his first amended complaint.1 See Dkt. No. 14. I discuss the Boise first amended complaint here in order to provide context for the later discussion of public disclosures that were incorporated into plaintiffs' second amended complaint following the filing of the Cestra second amended complaint. Cephalon employed Boise in sales representative and management positions from 1996 until June 2003. See Dkt. No. 69 at ¶ 20. Boise was terminated in 2003 allegedly for refusing to incorporate off-label marketing strategies into his sales approach and for sharing information regarding Cephalon's conduct with the FDA. Id.Count I of Boise's first amended complaint claimed defendants' marketing of Fentora and other medications violated 31 U.S.C. §§ 3729(a)(1)(A), (B), and (C). See Dkt. No. 14 at ¶¶ 100-08.
Boise's first amended complaint contained the following allegations regarding Fentora, which I will group into two categories. First, the complaint mentioned that the FDA approved Fentora for treatment of breakthrough cancer pain, but provided no other history regarding the FDA and Fentora. See id. at ¶ 77. The complaint also mentioned that Cephalon's medication Actiq was going to lose patent protection, which was an impetus to develop and market Fentora off-label. See id. at ¶¶ 76, 78-79.
Second, the complaint alleged that Cephalon conducted a widespread off-label promotion effort for Fentora that caused prescribing physicians and pharmacists to submit false claims for reimbursement from the government. See id. at ¶ 83. The complaint made various specific allegations regarding how defendant had promoted Fentora off-label. Boise alleged that Robert Roche, Cephalon's Senior V.P. of Marketing informed sales representatives that "Cephalon was losing too much money by abandoning off-label marketing efforts on its drugs and thus that it would be worth" it to use off-label promotion even if it meant being fined by the government. See id. at ¶ 82. Boise alleged that defendants marketed Fentora off-label to non-oncologists and dedicated its sales staff primarily to marketing to pain specialists who would prescribe Fentora off-label. See id. at ¶¶ 83-84. Boise did not provide any specific information regarding that marketing effort. The complaint alleged Cephalon focused its Fentora marketing efforts on off-label promotion through speaker programs. See id. at ¶ 84. Plaintiff did not provide any specific information regarding those speaker programs. The complaint alleged that defendants used kickbacks and preceptorships to promote Cephalon's drugs off-label, but alleged no specific facts of this activity with regard to Fentora. See id. at ¶ 3. Lastly, Boise also alleged thatFentora's form of delivery, potential accidental use by children and dosing advice that defendants gave to physicians all raised the risk of accidental overdose. See id. at ¶¶ 83, 85.
On June 24, 2013, in a separate action against Cephalon, relator Cestra filed his second amended complaint in the Southern District of New York. See Cestra v. Cephalon, Inc., No. 14-091842, Dkt. No. 1-30 (Second Amended Complaint). Counts I-IV of Cestra's second amended complaint assert four claims that defendants violated the FCA. Count I claims that defendants violated 31 U.S.C. § 3729(a)(1)(A) by knowingly presenting or causing to be presented to the government false or fraudulent claims for payment for Fentora. See No. 14-091842, Dkt. No. 1-30 at ¶¶ 427-29. Count II claims that defendants violated 31 U.S.C. § 3729(a)(1)(B) when they knowingly made, used, or caused to be made or used, false or fraudulent records or statements material to the payment of a false or fraudulent claim and that the claims were actually paid or approved in violation of 31 U.S.C. § 3729(a)(2). See id. at ¶¶ 430-33. Count III claims that defendants knowingly conspired with health professionals to commit the violations alleged in Counts I and II. See id. at ¶¶ 434-36. Count IV claims that defendants violated 31 U.S.C. § 3729(a)(1)(G) when they knowingly made or used false records or statements material to an obligation to pay or transmit money or property to the Government and concealed, avoided, or decreased that obligation. See id. at ¶¶ 437-39.
The Cestra second amended complaint relies upon the following allegations to support its claims, which I will group into three categories. First, the Cestra complaint provides a detailed history of FDA monitoring of Fentora including four specific times that the FDA issued warnings related to the off-label use of Fentora. See id. at ¶¶ 268-90. The Cestra complaint also provides a brief background regarding the drug Actiq and discusses Cephalon's loss of patentprotection for Actiq as an impetus for converting off-label prescriptions of Actiq to off-label prescriptions of Fentora. See id. at ¶¶ 255-63.
Second, the Cestra complaint alleges defendants conducted a widespread off-label promotion effort for Fentora that caused prescribing physicians and pharmacists to submit false claims for reimbursement from the government. The Cestra complaint includes specific allegations of how defendant promoted Fentora off-label. The Cestra complaint alleges defendant used speaker programs to promote Fentora off-label and provided specific names of doctors involved, their specialties and the nature of payments defendants made to them. See id. at ¶¶ 299-304. The Cestra complaint alleges that defendants used journal supplements to promote Fentora off-label and discussed specific examples of articles and authors. See id. at ¶¶ 305-10. Cestra alleges that defendants' own market studies confirmed they were promoting Fentora off-label. See id. at ¶¶ 311-17. The Cestra complaint alleges that defendants' own 2011 Brand Plan for Fentora specifically targeted non-oncology pain specialists for off-label promotion and listed oncology physicians for secondary targeting. See id. at ¶¶ 318-29. The Cestra complaint alleges that defendant used the Fentora Reimbursement Program to assist doctors in obtaining fraudulent reimbursements for off-label Fentora prescriptions from the government. Cestra alleges that this assistance constituted illegal kickbacks because it subsidized the high labor costs associated with obtaining reimbursement for off-label prescriptions and therefore increased physicians' willingness to prescribe Fentora off-label. See id. at ¶¶ 341-77. Through this program, Cestra alleges that defendants made false statements material to the submission of false claims to the government. See id. at ¶¶ 330-40.
Third, Cestra alleges that defendants' conduct violated Cephalon's Corporate Integrity Agreement and that defendants concealed these violations from the government. This allegedconcealment also led defendants to allegedly make false statements to the government that furthered their Fentora off-label promotion scheme. See id. at ¶¶ 374-75. Finally, the Cestra complaint articulates how defendants' off-label promotion scheme and kickbacks led to the submission of false claims to Medicaid, Medicare Part B and Part D. See id. at ¶¶ 379-42.
On February 27, 2014, plaintiffs filed a second amended complaint in this action adding claims by relators Dufour and Augustine and supplementing their claims and allegations from the Bo...
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