Here is a ruling that is nothing but anticlimactic. After a few months of anticipation, a federal appeals court decided not to rule on an issue raised last summer by the US Department of Justice in a whistleblower case against a drugmaker – whether the failure to report adverse events can form the basis for filing a lawsuit citing the False Claims Act.
Here is the background, all of which is from our earlier story: A year ago, a federal court judge tossed a pair of whistleblower lawsuits that were filed by a former safety consultant, Helen Ge, who alleged Takeda misrepresented or altered descriptions of adverse events for the Uloric gout pill. She also maintained Takeda failed to report instances of bladder cancer and congestive heart failure concerning the Actos diabetes pill to the FDA.
In her lawsuits, Ge contended the drugs, including the Prevacid heartburn treatment, would not have been as widely prescribed had adverse events been reported properly to the FDA in the belief that the agency might have ordered updated labeling or issued safety alerts. Consequently, she charged federal healthcare programs paid for more prescriptions than might otherwise have been dispensed.
But US District Court Judge F. Dennis Saylor had ruled that Ge failed to provide specific details of any false claims – another way of referring to bills for drugs – that might have prompted overpayment by federal or state healthcare programs, including Medicare and Medicaid. Specific evidence, such as transaction details, is required under rule 9b of the federal law to prove a violation occurred (back story).
However, Saylor also reasoned that Ge did not have a cause of action, because the adverse events that Takeda failed to report to the FDA were not necessarily material to the decisions by the federal healthcare programs to pay for the medicines. He also wrote that Ge should have instead petitioned the FDA to take action against violators, rather than charging Takeda had violated the False Claims Act.
This is the point that upset the federal government. Beyond the details of the Ge lawsuits, the US Department of Justice was concerned that such reasoning could be used as the basis for precluding other qui tam, or whistleblower, lawsuits that charge violations of the False Claims Act. And so the feds filed a friend-of-the-court brief with the First Circuit, where Ge appealed her cases.
“In concluding that (Ge) failed to state a claim, the district court indicated that the existence of a regulatory mechanism that allows citizens to petition the FDA could preclude liability under the False Claims Act,” the feds wrote. “The district court further suggested that False Claims Act liability could never be premised on a failure to comply with FDA’s adverse event reporting requirements.
“Its reasoning on these points is mistaken, and were this court to adopt such reasoning,” the feds caution, “the government’s enforcement of the False Claims Act could be significantly impaired"
In effect, Saylor agreed with Takeda, which argued the adverse events reports were not material to a decision by a federal or state government agency to pay the bills for specific drugs, while the federal government took the opposite tack and argued the deception could have influenced a decision to pay claims, Brent Wisner, an attorney at the BaumHedlund law firm who represents Ge, told us at the time.
But last week, the US Court of Appeals for the First Circuit upheld the lower court decision to dismiss her case after deciding that Ge did not meet the requirements under rule 9b, which requires specific evidence of false claims, and that she did not raise other issues, such as misbranding, on a timely basis. And so, the argument about whether a failure to report adverse events is sufficient to pursue a False Claims Act violation will have to wait for another day.
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