United States ex rel. Travis v. Gilead Sciences, Inc.
| Decision Date | 01 April 2022 |
| Docket Number | CIVIL ACTION NO. 17-1183 |
| Parties | UNITED STATES, et al. EX REL. Toby TRAVIS, Plaintiffs, v. GILEAD SCIENCES, INC., et al., Defendant. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Ross Michael Wolfe, The Weiser Law Firm, West Conshohocken, PA, for Plaintiffs California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, Minnesota, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Vermont, Washington, The Commonwealth of Massachusetts, Virginia, The District of Columbia.
Ross Michael Wolfe, The Weiser Law Firm, West Conshohocken, PA, Christopher L. Nelson, The Weiser Law Firm, P.C., Berwyn, PA, for Plaintiff Toby Travis.
John Mark Potter, Quinn Emanuel Urquhart & Sullivan LLP, San Francisco, CA, Manisha M. Sheth, Meredith M. Shaw, Quinn Emanuel Urquhart & Sullivan LLP, New York, NY, Nicholas Carl Harbist, Mark M. Lee, Naomi Zwillenberg, Blank Rome LLP, Philadelphia, PA, Suong Nguyen, Quinn Emanuel LLP, Redwood Shores, CA, for Defendant Gilead Sciences, Inc.
Brian T. Must, Justin M. Tuskan, Metz Lewis Brodman Must O'Keefe LLC, Pittsburgh, PA, Noah Edward Jussim, Hinshaw & Culbertson LLP, Los Angeles, CA, for Defendant Good Health, Inc.
Rufe, District Judge Relator Toby Travis, on behalf of the government of the United States and 29 jurisdictions within the United States, brings claims against Defendant Gilead Sciences, Inc. ("Gilead") and Defendant Good Health, Inc., d/b/a Premier Pharmacy Services ("Premier") under the False Claims Act1 and under the equivalent laws of 28 states and the District of Columbia.2 This Court has jurisdiction over Relator's federal claims under 28 U.S.C. § 1331, and supplemental jurisdiction over Relator's state law claims under 28 U.S.C. § 1367.
Gilead has moved to dismiss the claims asserted against it in the Third Amended Complaint ("TAC") in their entirety for failure to state a claim under Federal Rules of Civil Procedure 9(b) and 12(b)(6).3 In support of this motion, Gilead has asked the Court to take judicial notice of certain guidance documents issued by the United States Department of Health and Human Services as well as the 2009 "Code on Interactions with Health Care Professionals" published by the Pharmaceutical Research and Manufacturers of America.4 Premier has also filed a one-page motion seeking to join Gilead's motion, and incorporating Gilead's "Motion and Brief ... in full by reference."5
For the reasons described below, Gilead's request for judicial notice is granted, Gilead's motion to dismiss is granted in part and denied in part, and Premier's motion to dismiss is granted in part and denied in part.
As this case was reassigned to this Court, and the instant motions to dismiss are the first substantive actions taken in this case, a brief review of the procedural history of this case is appropriate. This case was initially assigned to the docket of the Honorable Petrese B. Tucker on March 16, 2017. However, as Relator has filed on behalf of the United States and the governments of 28 states and the District of Columbia, the complaint remained sealed for some time while those governments evaluated whether they wished to enter the case as intervenors. The complaint was amended twice during this period. This case was unsealed and served in December 2021, and was amended for a third time on motion of Relator before Defendants responded. The TAC was filed on July 14, 2021, and the motions to dismiss were filed in response. On 6, August 2021 the case was reassigned to this Court.
Gilead is a biopharmaceutical company headquartered in Foster City, California.
Gilead owns the drugs Sovaldi and Harvoni, which are designed to treat the hepatitis C
virus ("HCV").7 Sovaldi was approved by the FDA on December 6, 2013, and Harvoni was approved on October 10, 2014.8 Defendant Good Health, Inc., d/b/a Premier Pharmacy Services ("Premier") is a specialty pharmacy, licensed in all 50 states, which employs approximately 300 people in two pharmacy dispensing and distribution centers.9
Relator Toby Travis worked for Gilead between July 2013 and October 2014 as a Hepatic Therapeutic Specialist, promoting Sovaldi in southern Oregon and northern California.10 In October 2014 Relator began working as a sales representative for Premier, assigned to the California, Oregon, and Alaska territories.11
The TAC alleges that Gilead conducted pre-approval marketing of Sovaldi and Harvoni, marketed off-label uses of Sovaldi and Harvoni, made misleading, inaccurate, and false marketing statements to prescribers, paid the co-pays of patients prescribed Sovaldi and Harvoni by funneling money to patients through a third-party entity called the "PAN Foundation," and established sham "speaker programs" to direct meals, vacations, and cash payments to high-volume prescribers.
Gilead began training a team of sales representatives to promote Sovaldi approximately six months before the drug's approval.12 Sales representatives began outreach to physicians, collecting information about their HCV patient populations and treatment practices.13 As part of this outreach, Gilead allegedly directed sales representatives to instruct providers to perform their patients’ laboratory work "prior to the drug's approval so they could prescribe Sovaldi on day one."14 During this process, the TAC alleges that "sales representatives were instructed, in submitting their expense reports, to state the expenditures were for HCV disease state promotion, and not Sovaldi because it had not been approved."15 The alleged goal of this early outreach was to "get as many prescriptions covered before insurance companies" realized Sovaldi's "high cost" and implemented "cost saving measures."16
Once Sovaldi was approved, explicit marketing began. The TAC alleges that Gilead's marketing training for Sovaldi contained multiple misrepresentations, including misleading information about Sovaldi's effectiveness in patients with previous failed treatments17 and misleading statements about the tested viral loads
in patients after treatment.18 Gilead also instructed sales representatives regarding certain off-label uses of Sovaldi.19 The training also allegedly instructed sales representatives in methods to make HCV patients appear sicker than they were to secure insurance approval for Sovaldi by manipulating their fibrosis tests, or "F-Scores."20 During the Sovaldi training, "it was openly discussed that as long as the patient's fibrosis score was not tested using a liver biopsy, a patient who works out or fails to fast prior to the test would produce an artificially inflated fibrosis score."21 The TAC alleges that, "although Gilead never came out and explicitly said to tell providers to manipulate their patients’ F-Score results by telling them not to fast, [Gilead] provided all of the information to allow sales representatives to make this pitch to providers."22
For many patients with HCV, "the copay alone" on Sovaldi and Harvoni was "thousands of dollars."23 The PAN Foundation is a third party "patient assistance program" formed to "purportedly provide financial assistance to patients who cannot afford the cost of their medications."24 The TAC alleges that, as part of training, Gilead instructed its sales representatives to advertise the PAN Foundation "as a way of mitigating providers’ concerns regarding the cost of Sovaldi."25 Sales representatives were told to tell providers that through "Support Path," a customer service program run by Gilead, "Gilead would work directly with the patient to make sure the correct information was provided to the [PAN] Foundation to receive financial assistance."26
Support Path only provided assistance to patients receiving Sovaldi and Harvoni, and "almost all patients who signed up for foundation support [through Support Path] received financial assistance for their Sovaldi or Harvoni prescriptions."27 Sales representatives were told that "Gilead spends a lot of time and energy analyzing the amount of money the [PAN] Foundation would need to provide financial assistance for Sovaldi and Harvoni until the end of the year," and "use[s] that information to determine how much to donate" to the PAN Foundation.28 Sales staff were told to encourage prescribers "to prescribe early in the year" because the PAN Foundation was likely to "exhaust[ ] its funds for Sovaldi and Harvoni prescriptions by the start of the fourth quarter."29 At a sales training session, a speaker for Gilead allegedly described these donations as "support[ing]" sales representatives "in the field."30
In support of the marketing of Sovaldi, and later Harvoni, Gilead sponsored "physician speaker programs" that were "central to Gilead's promotional campaign for Sovaldi and Harvoni."31 Initially these programs were presented by well-known "thought leaders" with specific expertise in treating HCV, attracted large crowds of physicians, and offered continuing medical education credit to attendees.32 After the FDA approved Sovaldi, however, Gilead began hiring an increasing number of lesser-known speakers, even as "attendance quickly plummeted."33 Physician speakers traveling from out-of-town would "expect[ ], as Gilead promised, to be paid for two or three speaking engagements."34 In response sales representatives were instructed to arrange catered breakfast, lunch, and dinner talks at which the physician speakers could present.35 However, the breakfast and lunch programs were "normally very, very lightly attended," and were "largely conversational."36
Gilead allegedly used the speaker programs as a vehicle to provide high-prescribing doctors with honoraria and "trips to vacation destinations."37 For example, the TAC alleges that...
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