Nursing Home “Worthless Services” Theory Can’t Support FCA Liability

Last month the Seventh Circuit rejected an attempt to predicate False Claims Act liability against a nursing home on a theory of “worthless services.”  In throwing out a $3 million jury verdict awarded to two former nurses-turned-whistleblowers, the court concluded that even if “worthless services” was a viable theory under the FCA, a relator would have to prove that the nursing home’s services were completely worthless and not just substandard. [Read more…]

Government Slams Ranbaxy Again Over Plant In India

Last week the FDA announced that Ranbaxy’s Toansa plant in India failed inspection — the sixth Ranbaxy plant to cease making drugs for the U.S. market following revelations from a whistleblower that the generic drugmaker had flagrantly disregarded cGMP regulations in its manufacturing facilities.  Is this latest enforcement action nothing more than proof that Ranbaxy remains in the agency’s crosshairs, or is it yet another signal that the Government intends to ramp up cGMP-based FCA actions against pharmaceutical manufacturers? [Read more…]

Will GSK’s Incentive Compensation And Speaker Program Initiatives Set The Tone For 2014?

When British drug giant GlaxoSmithKline PLC (“GSK”) announced last month that it was implementing a new global marketing strategy to transform the way it sells and markets drugs to both doctors and patients, many commentators were quick to announce that a fundamental shift in the pharmaceutical business was underway.   While GSK’s announcement was significant in terms of precedence and scope, it is unclear at best whether other pharmaceutical companies will follow suit. [Read more…]

J&J to Pay $2.2 Billion To End Long-Standing Investigations By Feds

Charges of off-label marketing and kickback payments to physicians and long-term care pharmacy provider Omnicare are behind a $2.2 billion settlement agreement between Johnson & Johnson (“J&J”) and the U.S. Department of Justice (DOJ), in which the global health care giant finally resolves criminal and civil liability involving Risperdal and two other prescription drugs.  The eye-popping figure makes this the third largest health care fraud settlement in U.S. history. [Read more…]

Medtronic InFUSE Cases Signal That Off-Label Promotion Probably Not Illegal

A majority of plaintiffs seeking damages based on off-label promotion of Medtronic’s InFUSE Bone Graft system have been stopped in their tracks following several recent federal court decisions holding that such challenges were barred on preemption grounds.  Indeed, with the exception of two district court cases out of the Ninth Circuit, these preemption rulings not only underscore the limits of off-label promotion arguments in medical device cases, but also show that courts remain skeptical about whether off-label promotion is illegal under federal law. [Read more…]

Big Pharma On Its Heels as China Rounds Up “More Of The Usual Suspects” And Prepares To Slam GSK

Allegations of misconduct continue to plague Big Pharma companies in China.  Charges of bribery, corruption, off-label promotion, and inflated pricing now extend beyond GlaxoSmithKline (GSK) to Novartis, Eli Lilly, and Sanofi.  While these companies react to coming under Chinese scrutiny — with Johnson & Johnson (J&J) reportedly taking “proactive” steps to strengthen its China unit —  the Company that started it all (GSK) braces for major fines.  [Read more…]

Plaintiff’s Lawyers File RICO Class Action Suit Against Abbott Over Depakote Off-Label Promotion

A well-known plaintiff’s law firm with a stable of union pension fund clients has used the Racketeering Influenced and Corrupt Organizations Act (“RICO”), which was originally enacted in 1970 to combat organized crime, to file a class action lawsuit against Abbott Laboratories for the off-label promotions of Depakote.  Unless Abbott and similarly situated big pharma companies intend to fork over hundreds of millions (if not billions) of more dollars to plaintiff’s lawyers, they need to fight such suits tooth and nail. [Read more…]

Boston Scientific Battles Former Employees-Turned Whistleblowers Over “Trade Secrets”

In what will likely be another adverse legal decision for Boston Scientific Corporation’s Neuromodulation subsidiary (“BSNC”) in its ongoing battle with two former billing services employees-turned whistleblowers, the medical device manufacturer’s latest attempt to derail a qui tam suit involves charges that the whistleblowers stole BSNC trade secrets, thus violating the terms of their employment agreements.  Although there might one day be a case that truly tests the limits on how far an employee can go in taking her employer’s proprietary data to win the qui tam lottery, the current suit involving BSNC is probably not that case. [Read more…]

Pfizer $149 Million Rapamune Settlement Is More Proof That It’s Business As Usual With The Feds

Two False Claims Act whistleblower lawsuits are being resolved as part of a $491 million settlement between Wyeth Pharmaceuticals, now a division of Pfizer, Inc., and the U.S. DOJ.  This time around, Wyeth’s misconduct was based on off-label sales tactics for Rapamune®, an immunosuppressive drug that FDA approved for use in renal (kidney) transplant patients.  Unfortunately for the pharmaceutical industry, Pfizer’s latest compliance woes are a stark reminder that off-label cases are anything but passé.   [Read more…]

False Claims Act Cases Based on GMP Violations . . . Watch Out For Whistleblowers

It they haven’t already started, pharmaceutical manufacturers should be re-assessing their compliance with all aspects of FDA “current Good Manufacturing Practices” (“GMPs”), given the agency’s focus on manufacturing and the spurt of recent warning letters and product recalls.  Companies that fail to appear vigilant in ensuring that their products are GMP-compliant are inviting current and former employees to join the ranks of whistleblowers who have become wealthy relators through qui tam lawsuits. [Read more…]