July 25th, 2011
Whistleblower Lawsuit Against Amgen Is Reinstated
Last month, a federal court ruled that a drug or device maker remains liable under the False Claims Act even when a pharmacy or hospital was unaware that a kickback was made to a doctor to induce the sale of a product for which reimbursement was sought from Medicare and Medicaid. The decision was seen as a game changer, because dismissing whistleblower lawsuits would likely become more difficult.
Until then, courts had ruled the False Claims Act could not have been violated if a pharmacy does not know that a prescription was only written because a drugmaker gave a kickback to a doctor. Whistleblowers have argued, however, that a violation occurs once reimbursement is sought from Medicaid or Medicare. But the US Court of Appeals for the First Circuit disagreed.
Not surprisingly, the same court late last week invoked its previous ruling in reversing dismissal of whistleblower litigation against Amgen. A federal court in Boston had dismissed a lawsuit filed by a former Amgen employee - and joined by several states - because they purportedly failed to identify a false or fraudulent claim for Medicaid payment within the meaning of the state False Claims Acts.
“We reject that framework, invoked on appeal by the defendants, to the extent that it is inconsistent with our decision in Hutcheson concerning what constitutes a false or fraudulent claim for government payment,” the court wrote. “The state FCA provisions at issue here are not relevantly different from the federal FCA provisions at issue in Hutcheson” (the Hutcheson case was the ruling last month, which you can read about here).
At issue are allegations that Amgen provided free ‘overfills’ of its Aranesp anemia medication and encouraged doctors to bill Medicare and Medicaid for the extra amounts. The lawsuit, which was filed by Kassie Westmoreland, also charges the biotech offered kickbacks to doctors in the form of fictitious consulting arrangements and weekend getaways in order to steal market share from Johnson & Johnson, which sells the rival Procrit treatment (read the lawsuit here).
By way of background, Kassie Westmoreland worked as an Amgen employee from September 2002 to mid-March 2005 and filed her first complaint in June 2006. By September 2009, the feds chose not to intervene, or join, the lawsuit, but 15 states and the District of Columbia did. However, the federal appeals court did dismiss the case brought by Georgia, explaining that the “plaintiffs have not adequately alleged that the providers submitted claims to Georgia’s Medicaid program that did not comply with a precondition of payment.” The US Department of Justice, by the way, filed an amicus brief supporting Westmoreland and the states (you can read the appeals court ruling here).
This particular lawsuit generated some headline noise earlier this year when a handful of former Amgen execs ‘took the Fifth’ in depositions (back story). In a separate, but related incident, the biotech recently lost a battle to prevent the feds from interviewing former employees about allegations that HIPPA rules were violated HIPAA and docs were offered kickbacks to boost sales of various meds and steal market share from Johnson & Johnson (read this).