United States v. TEVA PHARMACEUTICALS USA, INC., 682 F.Supp.3d 142

Teva contracted with specialty pharmacies (ACS, later AssistRx) and donated over $350 million (2006–2017) to patient-assistance foundations (Chronic Disease Fund and The Assistance Fund) that subsidized Medicare patients’ Copaxone co-pays.
During the same period Teva substantially raised Copaxone’s wholesale acquisition cost, and the government alleges Teva donated to foundations to induce Medicare-reimbursed Copaxone claims and preserve sales.
Government experts identified 345,970 matched Medicare Copaxone claims tied to Teva referrals and foundation payments, totaling about $1.49 billion in Medicare reimbursements.
The government sued (2020) under the Anti‑Kickback Statute (AKS) and False Claims Act (FCA), alleging Teva’s donations caused false claims; Teva moved for summary judgment and the government moved for partial summary judgment on materiality, causation, and damages.
The court denied Teva’s summary judgment (finding triable issues on causation and scienter) and granted the government partial summary judgment: AKS violations are per se material under the FCA, the proper causation standard is a “sufficient causal connection” (not strict but‑for), and damages measure is the government’s total payments for tainted claims.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Causation standard for AKS‑based FCA claims	Guilfoile/Greenfield standard: need a sufficient causal connection between kickbacks and submitted claims	Teva: requires but‑for causation (Sixth/Eighth Circuit approach)	Adopted First Circuit approach: no strict but‑for; plaintiff need show a sufficient causal connection
Materiality of AKS violations under the FCA	AKS violations that result in federal payment are per se materially false (2010 AKS amendment)	Teva disputes per se materiality	Court held AKS violations are per se material for FCA purposes
Measure of damages for AKS‑tainted claims	Government: recover the full amount paid by Medicare for claims resulting from illegal kickbacks (Rogan approach)	Teva argued for a narrower measure	Court adopted full‑payment measure: government may recover entire payments for tainted claims
Scienter (AKS willfulness; FCA knowledge)	Government: record evidence (internal emails, legal warnings, program documents) supports willfulness/knowledge	Teva: no evidence employees knew conduct was illegal or intended to violate law	Court denied Teva summary judgment on scienter, finding sufficient evidence for a jury to infer knowledge/willfulness

Guilfoile v. Shields, 913 F.3d 178 (1st Cir. 2019) (AKS violation that results in federal payment is a false claim under FCA)
Greenfield v. Medco Health Sols., Inc., 880 F.3d 89 (3d Cir. 2018) (interpreting causal connection for AKS‑based FCA claims)
United States v. Rogan, 517 F.3d 449 (7th Cir. 2008) (measure damages as full government payments for claims submitted in violation of conditions)
Yates v. Pinellas Hematology & Oncology, P.A., 21 F.4th 1288 (11th Cir. 2021) (damages measured as difference between actual payment and what would have been paid if claim truthful)
United States ex rel. Drakeford v. Tuomey, 792 F.3d 364 (4th Cir. 2015) (Stark/condition‑precedent framing for reimbursement; government owed nothing if condition unsatisfied)
United States v. Mackby, 339 F.3d 1013 (9th Cir. 2003) (if truthful disclosure would show no entitlement, government paid nothing)
Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment burden shifting)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (materiality and genuine issue standard at summary judgment)
United States v. Bay State Ambulance & Hosp. Rental Serv., Inc., 874 F.2d 20 (1st Cir. 1989) (definition of willfulness under AKS/FCA context)