Pfizer False Claims Victory May Embolden Other Pharma Defendants

By Todd Hobbs, Judge K.K. Legett Fellow at Washington Legal Foundation and a rising third-year student at Texas Tech University School of Law

2nd CircuitIn May, the United States Court of Appeals for the Second Circuit upheld the dismissal of a qui tam lawsuit in U.S. ex rel. Polansky v. Pfizer, Inc.  Polansky, a former Pfizer Medical Director, brought suit under the federal False Claims Act (FCA) on behalf of the U.S. government. He alleged that Pfizer submitted a false claim for Medicare payment by illegally marketing its product for an off-label use.  The Second Circuit held that the complaint at issue failed to allege any off-label promotion and affirmed the district court’s dismissal on that basis.  Federal appeals courts have not considered many FCA lawsuits related to off-label marketing allegations, making the Polansky result worth closer review.

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WLF’s Annual End-of-Term Review Assesses Key Supreme Court Free-Enterprise Decisions

The U.S. Supreme Court: October 2015 Term Review

Speakers: The Honorable Jay Stephens, Kirkland & Ellis LLP; Andrew J. Pincus, Mayer Brown LLP; Elizabeth P. Papez, Winston & Strawn LLP; Jeffrey B. Wall, Sullivan & Cromwell LLP

Our speakers discussed Court rulings in the areas of class actions, arbitration, the federal False Claims Act, intellectual property, federal regulation, and property rights.

The Supreme Court’s “Universal Health” Ruling: A Net Win for Federal Government Contractors

supreme courtThe U.S. Supreme Court’s June 16, 2016 decision in a closely watched False Claims Act (FCA) case, Universal Health Services, Inc. v. United States ex rel. Escobar, had a little bit in it for everyone.  It held (as had most of the federal appeals courts) that a contractor can be held liable under the FCA for making a fraudulent claim for payment from the federal government, even if the claim was never expressly made but was merely implied.  On the other hand, Universal Health unanimously vacated a First Circuit ruling that had reinstated the plaintiffs’ claims, concluding that the First Circuit applied an insufficiently rigorous test for determining whether the defendant’s allegedly false claims were “material.”

So which side really “won” the case?  If the correct answer to that question turns on whether the Court’s decision will make it more difficult for private relators to prevail in future FCA cases, then the decision was a win for FCA defendants.  For example, the Court unequivocally rejected assertions—frequently raised by FCA plaintiffs—that an FCA claim is proven any time a contractor submits a claim for payment of a contractual claim despite awareness that it has breached a significant provision of its contract. Continue reading

Legislative Overseers Continue to Criticize FDA for its Regulation by Guidance

FDA

Four members of the Senate Health, Education, Labor, and Pensions Committee (HELP), including Chairman Lamar Alexander, wrote Food & Drug Administration (FDA) Commissioner Robert Califf earlier this month to reiterate their concerns with FDA’s use of guidance as regulatory tool. Members of the committee had previously written the FDA Commissioner about the agency’s use of guidance in May 2014, to which FDA responded nearly a year later in March 2015. During his confirmation hearing before the HELP Committee last November, Commissioner Califf addressed several questions about the use of guidance and pledged to investigate the Senators’ questions. Continue reading

Sixth Circuit Reins in False Claims Act Plaintiffs in First-of-its-Kind Health Information Case

6th CircuitThe US Court of Appeals for the Sixth Circuit recently dealt qui tam plaintiffs and their lawyers a setback in their campaign to expand federal False Claims Act (FCA) liability in the healthcare industry.  Addressing an issue of first impression, the court affirmed the dismissal of a relator’s claim that non-compliance with the Health Information Technology for Economic and Clinical Health Act (HITECH Act) gives rise to FCA liability.  U.S. ex rel. Sheldon v. Kettering Health Network not only found the relator’s complaint deficient on several grounds, but it also held that a dismissed state-court action that Ms. Sheldon filed subsequent to bringing the FCA suit precluded the federal action. Continue reading

WLF Media Briefing, New Paper Address the Freeing of Off-Label Medical-Product-Use Information

On Monday, May 2, 2016, Washington Legal Foundation hosted a program in its Media Briefing series entitled Freeing Off-Label Use Information: Three Lingering Questions for Medical-Product Innovators and Regulators. The recording of that program is available below. Also below are links to related materials, including an April 29, 2016 WLF Legal Backgrounder that draws lessons from a medical-device company’s successful defense of a criminal prosecution for alleged off-label promotion.

Participants:

  • Edward Berg, Sanofi US
  • John Osborn, Hogan Lovells LLP
  • Coleen Klasmeier, Sidley Austin LLP
  • Eric Grannon, White & Case LLP (moderator)

The program can also be viewed through WLF’s website—with a higher-quality video and integrated slides—by clicking here.

John Osborn’s Yale Journal article, “Can I Tell You the Truth?”, cited by the U.S. Court of Appeals for the Second Circuit in U.S. v. Caronia, is available here.

WLF’s Legal Backgrounder, “The US v. Vascular Solutions Acquittal: Three Lessons for Targets of ‘Off-Label Promotion’ Enforcement,” is available here.

If Companies Cave on GMO Labeling, Supply-Chain Concerns Could Be the Next Mandatory Labeling Gambit

Ivory CoastCalifornia’s federal district courts, which are already overstocked with food-labeling class-action suits, are now being asked to impose new food-product disclosure mandates. Courts have thus far dismissed lawsuits seeking on-package statements regarding alleged concerns in companies’ overseas supply chains, such as forced labor. But don’t expect those losses to dampen corporate-disclosure activists’ resolve. Such suits are just one part in a larger campaign, following in the footsteps of the mandatory “GMO labeling” crusade, to require supply-chain information on product packaging.

Manufacturers of chocolate, pet food, and seafood have been targeted for their failure to disclose on their packaging the existence of forced labor and other possible human-rights violations in foreign countries from which they source their products or product ingredients. Such an omission, the class actions claim, violates California consumer-protection laws. One remedy the plaintiffs seek is disclosure of this supply-chain data on product labels and point-of-sale advertising. Continue reading