United States Ex Rel. Lisitza v. Johnson & Johnson
765 F. Supp. 2d 112
D. Mass.2011Background
- Qui tam actions alleging Johnson & Johnson, Ortho, and related entities improperly induced Omnicare to favor J&J drugs over cheaper alternatives, through rebates, data payments, grants, and sponsorships, violating FCA and AKS.
- Omnicare served as a large nursing-home pharmacy provider; relators contend its consultant pharmacists were instrumental in steering prescriptions.
- J&J argues rebates were lawful discount protections under AKS safe harbor and that plaintiffs rely on a flawed certification theory.
- Public-disclosure and original-source defenses are raised, with older complaints and prior suits potentially barring current claims.
- The court addresses Rule 9(b) pleading standards, the materiality of AKS compliance to payment decisions, and whether state-law claims survive.
- Kammerer’s claims were dismissed in full; Lisitza’s best-price claims and several state-law claims were scrutinized and partially dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Public disclosure bar and original-source exception | Lisitza/Kammerer are original sources; disclosures were not in prior sufficient form | Earlier Maguire filing/public disclosures bar access; relators not original sources | Kammerer dismissed; Lisitza best-price claims dismissed (orig-source failure) |
| Whether FCA claims are adequately pled under Rule 9(b) | Kickbacks caused Omnicare to submit false claims; detailed schemes alleged | Need for more specific false claims per claim; connection uncertain | Rule 9(b) satisfied for the government’s allegations against J&J at this stage |
| Materiality and scope of AKS in false-claims context | AKS noncompliance is material to government payment decisions | Some argue AKS may be treated as participation condition, not payment, for some claims | AKS violations deemed material to payment; kickbacks can render claims false |
| Implied/express certification theories under FCA | Omnicare certifications of compliance violated AKS | Broad “all laws” language insufficient for express certification under some circuits | Two explicit certifications found; implied-certification theory discussed but not dispositive |
| State-law qui tam claims and jurisdictional objections | States have valid claims; federal FCA governs | Some state claims barred by settlement, cap, or lack of standing | Nevada, Texas, and Illinois state claims dismissed; specific state counts remaining in Kentucky/Virginia |
Key Cases Cited
- United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720 (1st Cir.2007) (public disclosure bar framework and original-source inquiry)
- United States ex rel. Ondis v. City of Woonsocket, 587 F.3d 49 (1st Cir.2009) (original source independence and public disclosure analysis)
- United States ex rel. Duxbury v. Ortho Biotech Prods., 579 F.3d 13 (1st Cir.2009) (Rule 9(b) pleading with connecting causal link)
- Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662 (Supreme Court, 2008) (FAA elements; materiality and scienter standards clarified)
- United States v. Rogan, 517 F.3d 449 (7th Cir.2008) (AKS material to payment decisions)
- Conner v. Salina Regional Health Center, 543 F.3d 1211 (10th Cir.2008) (AKS as a condition of payment in some contexts)
- Maguire v. Omnicare, No. 02-11436 (D. Mass. 2002) (D. Mass.) (public disclosures and first-to-file considerations referenced in analysis)