United States et al. ex rel. Ronald J. Streck v. Allergan, Inc. et al.

In a ruling on July 3, 2012, Judge Robreno denied Defendants’ Motion to Dismiss in part, allowing Plaintiff’s case to proceed against four pharmaceutical manufacturer Defendants (AstraZeneca, Biogen Idec, Cephalon and Genzyme). United States ex rel. Streck v. Allergan, Inc. et al., 2012 U.S. Dist. LEXIS 92936 *58-60 (E.D. Pa. July 3, 2012). These constitute the “Discount Defendants” which Plaintiff alleges knowingly underpaid rebates owed under the Medicaid Drug Rebate Program by underreporting AMPs for their drugs. The Court held that the Discount Defendants were at least reckless in concluding that service fees paid to wholesalers were not to be treated as discounts and subtracted from AMP (thereby lowering the rebates they owed the government), but rather were bona fide service fees. Id. at *25-37.

Although Plaintiff’s Complaint did not detail the exact false claims submitted by Defendants (the false AMPs), the Court nonetheless found that the Complaint satisfied the specificity required by Rule 9(b). Id. at *45-51. The Court noted that “[o]nce discovery in this case proceeds, and the veil of confidentiality covering the information Defendants submitted to the Government is lifted . . . Plaintiff may fill in the missing false figures upon which Plaintiff claims Defendants based their AMP calculations.” Id. at FN 13.

The case settled on July 7, 2015 for a total of $55.5 million, plus statutory fees.