United States ex rel. Dickson v. Bristol-Myers Squibb Co. (In re Plavix Mktg., Sales Practice & Prods. Liab. Litig. (NO. II))

• Decision Date: 27 June 2017
• Docket Number: Civil Action No. 13-1039 (FLW)(LHG),MDL DOCKET NO. 2418
• Parties: IN RE PLAVIX MARKETING, SALES PRACTICE AND PRODUCTS LIABILITY LITIGATION (NO. II) United States of America, et al., ex rel. Elisa Dickson, Plaintiffs, v. Bristol-Myers Squibb Co., et al., Defendants.
• Court: U.S. District Court — District of New Jersey

332 F.Supp.3d 927

IN RE PLAVIX MARKETING, SALES PRACTICE AND PRODUCTS LIABILITY LITIGATION (NO. II)United States of America, et al., ex rel. Elisa Dickson, Plaintiffs,

v.Bristol-Myers Squibb Co., et al., Defendants.

MDL DOCKET NO. 2418

Civil Action No. 13-1039 (FLW)(LHG)

United States District Court, D. New Jersey.

Signed June 27, 2017

OPINION

WOLFSON, United States District Judge:

Before the Court is the motion of Defendants Bristol-Myers Squibb Company ("BMS"), Sanofi-Aventis U.S. LLC, Sanofi U.S. Service Inc., and Sanofi-Synthelabo Inc. (collectively "Sanofi") (together with BMS, "Defendants") to dismiss the Fourth Amended Complaint ("4AC") of relator Elisa Dickson ("Realtor"). In the 4AC, Relator brings a qui tam action, a member case of the Multi-District Litigation, In re: Plavix Marketing, Sales Practices and Products Liability Litigation, involving the alleged wrongful marketing and sales of Plavix (clopidogrel bisulfate), a prescription blood thinner manufactured by Defendant BMS and marketed in the United States by BMS and Sanofi. Relator brings this case on behalf of the United States and seventeen states, asserting claims for violation of the federal False Claims Act ("FCA"), 31 U.S.C. §§ 3729 – 3733 (Count I); conspiracy under the FCA, 31 U.S.C. § 3729(a) (Count II); and the False Claims Acts of twenty-four (24) states (Counts III-XXVI). Defendants move to dismiss the 4AC in its entirety, and in the alternative to limit the temporal scope of Relator's state FCA claims under the laws of five states, the FCAs of which became effective after March 30, 2005.

For the reasons stated herein, the Defendants' Motion to Dismiss the 4AC is GRANTED, and Defendants' motion to restrict the retroactive application of the five state FCAs, which became effective after March 30, 2005, is denied as moot.

I. FACTUAL BACKGROUND

The relevant facts of this action, as set forth in the 4AC and taken as true by this Court, are as follows. Plavix ® (clopidogrel bisulfate) ("Plavix") is a prescription blood thinner manufactured by BMS and comarketed in the United States by Sanofi. 4AC ¶ 1. Plavix has been approved by the United States Food and Drug Administration ("FDA") and is indicated for the treatment of Acute Coronary Syndrome and for use following a recent myocardial infarction or stroke or established peripheral artery disease. Ibid.Plavix costs approximately $4.00 per pill. Aspirin, an over-the-counter blood thinner, costs approximately $0.04 per pill. Id. at ¶ 3.

Relator claims that Defendants promoted Plavix as a superior drug to aspirin for certain indicated usages, when Plavix was no more effective than aspirin for those indicated usages and cost one hundred times more. Id. at ¶ 22. More than half of state Medicaid programs contain cost-based restrictions that limit coverage under Medicaid to cost-effective treatments. Ibid. In these states, Medicaid only pays for cost-effective drugs. Ibid. Where an equally effective but cheaper treatment is available for a particular course of treatment, the more expensive drug is not cost effective and cannot be reimbursed. Ibid. In these states, cost effectiveness is not just a requirement for participation in Medicaid, it is a condition precedent to reimbursement designed to ensure that a state's Medicaid program is a good steward of taxpayer dollars. Ibid.

Relator alleges that Defendants targeted their marketing efforts, misrepresenting the effectiveness of Plavix relative to aspirin, at physicians and prescribers whose patients relied upon public assistance programs such as Medicaid. Id. at ¶ 3. Relator claims that Defendants' marketing efforts caused physicians to submit many prescriptions for Plavix in the mistaken belief that it was a cost-effective treatment. Ibid.

In order for the cost of a drug to be reimbursed under Medicaid, the drug manufacturer must have entered into, and have in effect, a rebate agreement wherein the manufacturer agrees to give the applicable government payor back a percentage of the cost of the reimbursed drug. Id. at ¶ 92. Drugs that are covered by a rebate agreement are then statutorily divided into two distinct categories: those that require prior authorization from Medicaid prior to reimbursement and those that are reimbursed automatically when the drug is prescribed. Ibid. Each state maintains a preferred drug list, or formulary¹ , that explicitly exempts certain Medicaid-eligible drugs from a prior authorization requirement. Medicaid is obligated to provide reimbursement for the cost of a drug on a state's formulary when the drug is prescribed by a physician for an "on-label" indication. Ibid. In other words, if a drug is on a state's formulary, once an "on-label" prescription for that drug is written and the prescription is filled, the cost for that prescribed drug is automatically reimbursed by the government. No other authorizations are required. Id. at ¶ 26.

In addition to marketing to prescribing physicians, Relator also alleges that Defendants falsely marketed Plavix to the physicians and pharmacists on state formulary committees as a cost effective treatment eligible for listing on the states' formularies, when Plavix was not in fact so eligible, due to its lack of superior effectiveness to aspirin and significantly greater cost. Id. at ¶ 151. Relator claims that these marketing efforts fraudulently induced the formulary committees to include Plavix on each state's PDL/formulary, which triggered an automatic government obligation to reimburse Plavix prescriptions—even when Plavix did not meet the cost-effectiveness requirements for inclusion on the formulary. Ibid. Relator alleges that reimbursements for Plavix in this context constitute false claims under the FCA and under the state FCAs. Ibid.

II. PROCEDURAL HISTORY

On March 30, 2011, Relator filed this case in the United States District Court for the Southern District of Illinois ("the transferor court"). The United States and its co-plaintiff States declined to intervene in Relator's claims. On November 29, 2012, Relator filed a Second Amended Complaint. Defendants moved to dismiss that pleading, and the transferor court granted that motion in part and denied it in part (" Dickson I"). See 289 F.R.D. 271 (S.D. Ill. 2013) (Dkt. No. 54.).

The Judicial Panel on Multidistrict Litigation then transferred the case to this Court to be part of the Plavix® Multi-District Litigation. This Court then vacated Dickson I, in part, upon reconsideration, granted further dismissal in part, and granted Relator leave to amend her pleading (" Dickson II"). See 2013 WL 7196328 (D.N.J. Aug. 21, 2013) (Dkt. No. 88). On September 20, 2013, Relator filed a 149-page Third Amended Complaint ("3AC"). The 3AC's Prescriber Allegations and Formulary Allegations asserted that Defendants violated the federal FCA and numerous state FCAs by causing the submission of false claims for Medicare and Medicaid payment. Defendants moved to dismiss the 3AC in its entirety. On August 20, 2015, the Court granted Defendants' motion in part and denied it in part. The Court dismissed (1) all FCA claims based on Medicare Part D; (2) federal FCA claims based on the Medicaid plans of thirty-three (33) states, including the District of Columbia; (3) all FCA claims based on Plavix's inclusion on state formularies; (4) state FCA claims raised under the law of nineteen (19) states; and (5) all federal and state FCA claims for claims made prior to March 30, 2005, pursuant to the applicable statutes of limitations. See Dickson III, 123 F.Supp.3d at 619.

The active claims remaining in the case after the Court's decision were (1) federal FCA claims based on Defendants' conduct in 17 States—Connecticut, Delaware, Idaho, Kansas, Maryland, Massachusetts, Mississippi, Montana, Nebraska, North Carolina, Ohio, Oklahoma, Rhode Island, South Dakota, Utah, Washington and Wyoming—each of which imposes a cost-effectiveness requirement as a condition for the reimbursement of drugs under that state's Medicaid program ("the Cost-Imposed States"); and (2) state FCA claims under the law of the seven Cost-Imposed States that have enacted their own FCAs—Connecticut, Delaware, Massachusetts, Montana, North Carolina, Oklahoma, and Rhode Island.

On December 15, 2015, the Court stayed this case pending the Supreme Court's decision in Universal Health Servs., Inc. v. United States and Massachusetts, ex rel. Escobar , ––– U.S. ––––, 136 S.Ct. 1989, 2001, 195 L.Ed.2d 348 (2016) (hereinafter " Escobar "). On June 16, 2016, the Supreme Court decided Escobar . These proceedings were reopened on June 29, 2016.

On August 16, 2016, without seeking leave to amend, Relator filed her fifth pleading: the 175-page Fourth Amended Complaint ("4AC"). The 4AC asserts claims for violation of the federal FCA, 31 U.S.C. §§ 3729 - 3733 (Count I), and for conspiracy to violate the federal FCA, 31 U.S.C. § 3729(a) (Count II), based on allegedly false Medicaid claims submitted in thirty-six (36) states. In addition to federal FCA claims based on conduct in the 17 Cost-Imposed States that this Court previously allowed to go forward, Relator also includes claims in 19 states—Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Hawaii, Iowa, Louisiana, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Tennessee, Wisconsin—which this Court previously dismissed. Relator claims that these states too impose cost-effectiveness requirements in their Medicaid reimbursement schema, which were simply not pleaded in the 3AC. The 4AC also asserts claims under 24 state FCAs.² This figure includes 17 state FCA claims, which this Court previously dismissed—California, Colorado, Florida, Georgia, Illinois, Indiana, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Tennessee, Texas, Virginia, Wisconsin, District of Columbia. Again, Relator's rationale for resurrecting these claims is that these states also impose cost-effectiveness requirements, which were previously...