123 F. Supp. 3d 584
D.N.J.2015Background
- Relator Elisa Dickson, a former Sanofi sales rep for Plavix, filed a qui tam FCA suit alleging defendants (BMS and Sanofi entities) deceptively marketed Plavix, causing medically unnecessary prescriptions to be submitted to Medicare Part D and state Medicaid programs.
- TAC alleges defendants promoted Plavix as superior to aspirin despite studies (CAPRIE, Chan, PRoFESS) showing limited or non‑significant advantages; Relator claims she was trained to target prescribers whose patients used government payors.
- Defendants moved to dismiss arguing (inter alia) public‑disclosure bar/original‑source failure, statute‑of‑limitations, failure to plead falsity/materiality with particularity, and that FDA on‑label approval precludes payment‑condition FCA claims.
- Court held (1) Relator is an original source as to pre‑2010 allegations and also satisfies the post‑2010 “original source” standard for the additional allegations she provided; (2) many claims dismissed on merits/statute limits, but FCA claims survive for Medicaid in states with cost‑effectiveness requirements.
- Surviving federal FCA claims limited to Medicaid in 17 states (listed in opinion) and to conduct after March 30, 2005; most Medicare Part D and 33 state Medicaid claims (including D.C.) and most state‑law counts were dismissed. Relator’s remand/reconsideration motion denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Public‑disclosure bar / original‑source status | Dickson claims she has direct, independent knowledge from working in the sales scheme and voluntarily provided info to government, so she is original source. | Defendants contend TAC is based on prior public disclosures (media, Hall complaint) and Relator is not an original source. | Court: TAC is based on prior public disclosures but Dickson pleaded direct, independent knowledge (training, internal materials) and qualifies as original source under pre‑ and post‑2010 statutes; public‑disclosure bar does not require dismissal. |
| FCA liability where prescriptions were FDA on‑label (Medicare Part D) | Marketing caused physicians to prescribe Plavix when alternatives were equally effective and cheaper, so claims were not "reasonable and necessary." | FDA approval for an on‑label use makes a prescription "reasonable and necessary" under Part D; therefore no FCA implied‑certification liability. | Court: FDA approval for on‑label use renders the prescription "reasonable and necessary" for Part D as a matter of law; Medicare Part D FCA claims dismissed. |
| Medicaid coverage and state law variations (medical necessity vs. cost‑effectiveness) | Medicaid reimbursement requires medical necessity and many states impose a medical‑necessity/cost‑effectiveness condition; defendants’ marketing caused false certifications to states. | Like Part D, a federally approved on‑label drug qualifies as a covered outpatient drug; states may not override federal coverage absent statutory exceptions. | Court: Federal Medicaid statute treats FDA‑approved on‑label drugs as covered; Relator’s broad Medicaid claims dismissed for 33 states. Claims survive for states whose Medicaid rules expressly impose cost‑effectiveness requirements (17 states listed) because those state standards could make cost‑based reimbursement a payment condition. |
| Formulary‑based claims (states placed Plavix on formularies due to marketing) | False marketing caused states’ P&T committees to include Plavix on formularies, so reimbursements via formularies were false claims. | Allegations are speculative; Relator cannot show a false certification prerequisite to payment or how marketing materially influenced P&T decisions. | Court: Formulary inclusion claims are speculative and fail to identify a false certification prerequisite to payment; those claims dismissed. |
| Pleading particularity and Rule 9(b) / Rule 8 adequacy | Dickson alleges scheme details, internal materials, target prescribers, and states’ statutes; discovery can fill specifics of individual claims. | Defendants say TAC fails to identify specific misrepresentations, physicians, dates, or specific false claims and many allegations rest on "information and belief." | Court: Under law of the case, prior finding that Relator met Rule 9(b) remains controlling; overall pleading survives as to the remaining Medicaid cost‑effectiveness state claims. Formulary allegations deemed insufficient. |
| Statute of limitations | Dickson did not address government knowledge time; contends claims timely. | Defendants argue six‑year federal limitations applies (Gov't declined to intervene), so claims arising before March 30, 2005 must be dismissed. | Court: Applies six‑year limit (government declined to intervene); claims premised on conduct before March 30, 2005 are dismissed (federal and similarly‑worded state statutes). |
Key Cases Cited
- Bell Atl. v. Twombly, 550 U.S. 544 (plausibility pleading standard under Rule 8)
- Ashcroft v. Iqbal, 556 U.S. 662 (application of Twombly to pleadings and disregard of legal conclusions)
- United States ex rel. Wilkins v. United Health Grp., 659 F.3d 295 (3d Cir.) (limiting implied‑certification FCA claims where regulation is not a condition of payment)
- United States ex rel. Paranich v. Sorgnard, 396 F.3d 326 (3d Cir.) (public‑disclosure bar analysis)
- United States ex rel. Atkinson v. PA. Shipbuilding Co., 473 F.3d 506 (3d Cir.) (algebraic test for public disclosure: X + Y = Z)
- United States ex rel. Rostholder v. Omnicare, Inc., 745 F.3d 694 (4th Cir.) (FDA approval sufficient to qualify a drug as a "covered outpatient drug")
- Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280 (Sup. Ct.) (retroactivity analysis for statutory amendments)
- Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341 (preemption/role of FDA determinations over state law)
- Evancho v. Fisher, 423 F.3d 347 (3d Cir.) (Rule 12(b)(6) standard discussion)