Court order in Rost v. Pfizer sets new legal precedent: Dr. Rost wins both qui tam appeal and motion to dismiss
"Defendants’ motion to dismiss is DENIED with respect to allegations of false claims for off-label pediatric uses."
Dr. Rost's victory creates an important legal precedent for future false claims cases:
Defendants had argued in the Amended Complaint that Rost failed to plead his FCA claims with particularity, as required under Rule 9(b). Rule 9(b) states that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”
The First Circuit dismissed Dr. Rost’s first complaint because “the complaint does not give notice to Pfizer of false claims submitted by others for federal reimbursement of off-label uses, only of illegal practices in promotion of the drug...
Many pharmaceutical qui tam cases fail to meet this hurdle, since it is virtually impossible to get detailed patient information proving fraud without violating patient confidentiality law, called HIPAA.
In this case Rost was able to overcome this hurdle, which will provide an important new path for future qui tam suits:
"To correct the deficiencies in his first complaint, Dr. Rost alleges more than 200 false claims were submitted to both Medicaid and other federal programs from citizens of Indiana. (Am. Compl. 90). For each of these claims, Dr. Rost has listed codes which reveal a) the drug for which reimbursement was sought from CHIP and Medicaid; b) the medical diagnosis accompanying the claim; c) both the diagnosis and dispensation dates; and d) the prescription dosage. (Am. Compl. 94). Dr. Rost alleges that claims submitted to federal agencies for reimbursement were for off-label, non-FDA approved uses of Genotropin such as for “short stature” and “small for date”. (Am. Compl. 97). Dr. Rost’s Amended Complaint satisfies Rule 9(b)’s heightened pleading requirement [my italics]."
Additional excerpts from the order:
Whistleblower Plaintiff Dr. Peter Rost, a former Vice President of Defendant Pharmacia, alleges that Pharmacia, a subsidiary of Defendant Pfizer, violated the federal False Claims Act (“FCA”), 31 U.S.C. §3729 et seq., and state law1 by unlawfully promoting the off-label use of the growth hormone medication Genotropin.
To increase sales, Pharmacia promoted Genotropin’s use in a broad range of these off-label treatments. (Am. Compl. 55- 56). As a result of Pharmacia’s off-label marketing, United States sales revenues for Genotropin tripled. (Am. Compl. 2). Now, sixty-percent of all adult sales and twenty-five percent of all pediatric sales of Genotropin are off-label. (Am. Compl. 3).
In April 2007, Defendants pleaded guilty to one count of offering “kickbacks” in connection with their outsourcing contract for the administration and distribution of Genotropin. (Am. Compl. 116, 118, 121). Pharmacia paid a $34.7 million fine. (Am. Compl. 114). As part of their plea agreement, Defendants admitted to the unlawful promotion of Genotropin for off-label uses, specifically as an anti-aging medication for adults.
Dr. Rost alleges that as a result of Pharmacia’s practices hundreds and possibly thousands of false claims based on offlabel prescriptions were reimbursed by federal Medicaid and other federal health care programs in violation of the FCA. (Am. Compl. 89). According to claims data from Indiana, the Medicaid and CHIP federal programs reimbursed for over 200 prescriptions there for off-label uses of Genotropin, such as for short stature without growth hormone deficiency and for “small for date” (Am. Compl. 90, 97, 101).
Plaintiff has generally alleged that Defendants have engaged in marketing tactics (like provision of financial incentives, direct payments, travel boondoggles, phony consultant fees, or other “kickbacks”) and this marketing campaign has caused the submission of false claims by doctors. To prevail, Plaintiff will have to demonstrate that the financial incentives were unlawful kickbacks which foreseeably caused the submission of a false claim for federal reimbursement under the FCA.
Defendants’ motion to dismiss is DENIED with respect to allegations of false claims for off-label pediatric uses. However, it is ALLOWED with respect to allegations of false claims for anti-aging off-label uses.
Link to Court Order.