596 F.Supp.3d 522
E.D. Pa.2022Background
- Relator Toby Travis (former Gileby sales rep and later specialty‑pharmacy marketer) filed a Third Amended Complaint under the federal False Claims Act (and parallel state FCA statutes) on behalf of the United States and 29 jurisdictions alleging Gilead and Premier engaged in schemes to induce prescriptions of Sovaldi and Harvoni.
- Allegations against Gilead: pre‑approval and off‑label promotion, misleading marketing, training sales reps about manipulating FibroScan/F‑scores, use of paid speaker programs (honoraria, travel, trips) targeted at high prescribers, and coordinating patient copay assistance via Gilead’s Support Path and donations to the PAN Foundation.
- Allegations against Premier: entered volume pricing with Gilead, solicited prescriptions by paying pharmaceutical reps through a shell company, and ran free/low‑cost FibroScan clinics for providers in exchange for exclusive prescription routing.
- Procedural posture: Gilead moved to dismiss under Rules 12(b)(6) and 9(b); requested judicial notice of HHS/PhRMA guidance. Premier filed a one‑page joinder; court treated Premier’s joinder as limited and addressed Premier’s separate alleged conduct.
- Court granted judicial notice of the guidance documents; dismissed many FCA theories for failure to plead materiality/particularity but denied dismissal as to claims based on the speaker programs and Gilead’s PAN Foundation relationship; it also sustained conspiracy and FCA claims against Premier for its alleged kickback schemes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether pre‑approval, off‑label and misleading marketing / F‑score manipulation states FCA claims (materiality / particularity) | Alleged marketing induced prescriptions, some allegedly submitted early; reps instructed how to make patients appear eligible | Gilead: relator fails to identify specific false claims or how govt payment decision was materially affected; allegations are vague | Dismissed as FCA claims — relator failed to plead materiality / Rule 9(b) particularity for these theories |
| Whether speaker programs constitute AKS‑tainted claims under the FCA | Speaker programs paid and rewarded high prescribers (honoraria, trips); events had low attendance and were designed to compensate prescribers to induce prescriptions | Gilead: industry guidance permits legitimate speaker programs; low attendance not probative of illicit purpose; lacks systemic allegations | Survived dismissal — allegations (payments linked to high prescribers, continued programs despite low attendance, concrete examples) sufficiently plead AKS‑tainted FCA claims |
| Whether Gilead’s use of Support Path and donations to PAN Foundation created AKS/FCA liability | Gilead funneled copay assistance through PAN, Support Path worked directly with patients for Sovaldi/Harvoni, and Gilead timed/directed donations to support sales | Gilead: charitable contributions permitted by guidance if awards are independent of donor; cites HHS guidance | Survived dismissal — complaint plausibly alleges the PAN assistance was not independent and functioned to induce claims (analogy to Vitale) |
| Whether the TAC adequately pleads a conspiracy between Gilead and Premier to violate the FCA | Relator points to Gilead’s volume contract with Premier, preferred pharmacy selection, and coordination via Support Path | Gilead: TAC lacks facts showing Gilead knew Premier paid under‑the‑table kickbacks or agreed to violate the FCA | Conspiracy claim between Gilead and Premier dismissed for failure to plead an agreement; separate conspiracy claims against Premier (for paying reps and providing services to induce prescriptions) survive |
| Whether state‑law FCA claims were pleaded with required particularity across jurisdictions | Relator alleges nationwide marketing practices and specific events in multiple states; asserts parallel state claims | Gilead: many state claims lack state‑specific factual allegations and therefore fail Rule 9(b) | Denied — court found the nationwide/systemic allegations plus multiple concrete regional examples suffice to put defendants on notice for the state claims |
Key Cases Cited
- Universal Health Servs., Inc. v. United States, 579 U.S. 176 (2016) (FCA materiality standard; FCA not an all‑purpose fraud statute)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard — plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard — factual context required)
- United States ex rel. Bookwalter v. UPMC, 946 F.3d 162 (3d Cir. 2019) (Rule 9(b) standards for FCA relators)
- United States of Am. ex rel. Vitale v. MiMedx Group, Inc., 381 F. Supp. 3d 647 (D.S.C. 2019) (PAN Foundation allegations can support FCA liability where donations are functionally tied to induced claims)
- Sturgeon v. PharMerica Corp., 438 F. Supp. 3d 246 (E.D. Pa. 2020) (judicial notice of administrative guidance at pleading stage)
- United States v. Allergan, Inc., [citation="746 F. App'x 101"] (3d Cir. 2018) (use of agency guidance in assessing notice of illegality)
- Exec. Health Res., Inc. v. United States, 196 F. Supp. 3d 477 (E.D. Pa. 2016) (allegations of nationwide scheme can suffice for multi‑state FCA claims)
- United States ex rel. Bergman v. Abbott Lab'ys, 995 F. Supp. 2d 357 (E.D. Pa. 2014) (off‑label promotion and FCA pleading limits)