141 F. Supp. 3d 311
D.N.J.2015Background
- Relator Gerasimos Petratos, a former Genentech data executive, sued Genentech and Roche entities under the False Claims Act (FCA), alleging suppression/misuse of safety data about the cancer drug Avastin that led to improper Medicare/Medicaid payments.
- Avastin had FDA approval for certain indications; a metastatic breast cancer indication was later removed after studies showed lack of survival benefit and safety concerns.
- Petratos alleges defendants relied on inadequate databases, declined his recommendation to use a more complete database, withheld adverse-event information from key opinion leaders, and delayed adverse-event reporting to regulators and payors.
- The Amended Complaint asserts FCA counts for presenting false claims, false statements to induce payment, reverse false claims, and conspiracy, plus parallel state-law claims across many states.
- The District Court evaluated whether defendants’ conduct produced an actual false claim to the government (or violated preconditions of payment), and whether regulatory violations alleged were material preconditions to reimbursement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether submissions to FDA/compendia or KOLs constitute "claims" under the FCA | Petratos: withholding/misleading safety data caused false government-paid claims for Avastin | Genentech/Roche: only actual reimbursement claims (e.g., physician billing to Medicare/Medicaid) are FCA "claims" | Court: Only reimbursement claims qualify; regulatory submissions/KOL outreach are not FCA claims |
| Whether Avastin prescriptions were "false claims" because not "medically reasonable and necessary" | Petratos: doctors would have prescribed less had they known risks; thus some reimbursement claims were not reasonable/necessary | Defendants: Medicare/Medicaid determine "reasonable and necessary" via FDA approval/compendia; doctors do not unilaterally control that determination | Court: "Reasonable and necessary" is an agency/regulatory determination tied to FDA approval/compendia; complaint fails to allege CMS or compendia would have denied payment |
| Whether violations of FDA reporting or database practices give rise to implied-certification FCA liability | Petratos: defendants implicitly certified regulatory compliance; violations made claims false/material | Defendants: regulatory violations are not FCA violations unless the regulations are preconditions to payment | Court: Plaintiff alleged no regulation shown to be a precondition of payment; regulatory violations alone insufficient for FCA liability |
| Whether alleged suppression of information could have changed compendia/KOL positions and thus payment decisions ("fraud on the compendia") | Petratos: withholding proteinuria risk info from a Key Opinion Leader would have altered prescribing and compendia influence | Defendants: no allegations that compendia or CMS would have changed coverage/support | Held: Complaint lacks allegations that compendia/CMS would have altered support; fraud-on-compendia theory inadequately pled |
Key Cases Cited
- United States ex rel. Schmidt v. Zimmer, Inc., 386 F.3d 235 (3d Cir.) (elements of FCA claim)
- Wilkins v. United Health Group, Inc., 659 F.3d 295 (3d Cir.) (implied-certification limits and materiality/precondition-of-payment requirement)
- Heckler v. Ringer, 466 U.S. 602 (U.S.) (coverage/"reasonable and necessary" is an agency discretion)
- Mikes v. Straus, 274 F.3d 687 (2d Cir.) (FCA liability linked to payment decision; implied-certification doctrine explained)
- Science Applications Int’l Corp. v. 626 F.3d 1257 (D.C. Cir.) (inferring implied certifications where certification is prerequisite to government action)
- United States ex rel. Ge v. Takeda Pharm. Co., 737 F.3d 116 (1st Cir.) (adverse-event reporting not material precondition to payment in similar context)
- Strom ex rel. U.S. v. Scios, Inc., 676 F. Supp. 2d 884 (N.D. Cal.) (distinguishable FCA denial where CMS had determined certain off-label uses were not covered)