Fourth Circuit Revives False Claims Act Case Involving Controversial Painkiller OxyContin

The drug OxyContin has been widely publicized for its tendency to lead patients toward unintended opiate addiction, often resulting in misuse and eventual dependence. The drug is also favored among younger children eager to experiment with illicit drugs without having to venture beyond the medicine cabinet.

For these reasons, OxyContin is a highly regulated controlled substance with monthly purchasing limits and several others checks in place to prohibit “doctor shopping,” in which patients getting treatment or advice from multiple doctors with coordination between them.  This is at best counter-productive and wasteful, and at worst very dangerous, as it can allow people to maximize their drug limit from multiple doctors.

In a recent case involving the makers of OxyContin – Purdue Pharma – the U.S. Court of Appeals for the Fourth Circuit overruled a dismissal by a lower court of a False Claims Act case alleging false marketing of the drug, which is expressly prohibited by several federal statutes and renders a drug ineligible for reimbursement by federal healthcare programs (e.g., Medicare or Medicaid). More specifically, the whistleblower asserted that Purdue Pharma marketed the drug as twice as potent as its generic counterparts, which was allegedly untrue and should have resulted in a denial by healthcare programs of any reimbursement for this drug on behalf of covered patients.

Procedural Matters Recently Resolved

The relator in this case, Mark Radcliff, is a former sales representative for Purdue Pharma who was laid off in 2005 as a result of an unexpected reduction in the sales force. In exchange for a greater severance package, the whistleblower agreed to release all possible claims against Purdue Pharma. Thereafter, he filed an FCA case against the drug maker alleging the above-described facts.  At the same time, other Purdue Pharma employees, including the whistleblower’s wife, filed similar FCA actions.

The District Court dismissed Mr. Radcliff’s claims outright, holding he did not set forth sufficient facts in his complaint to meet the threshold requirement to prove fraud. On appeal to the Fourth Circuit, the Court upheld the dismissal for a different reason: he signed away his right to file a claim by executing the release with Purdue in 2005.

In the concurrent actions by other Purdue employees, the District Court dismissed all claims against Purdue under the civil doctrine known as res judicata, which precludes plaintiffs from filing identical cases against the same defendant. The concept is similar in theory to the criminal law doctrine prohibiting double jeopardy, or exposure to punishment for the same crime twice.

Fourth Circuit Overrules Res Judicata Holding

In recent developments, the Fourth Circuit reversed the District Court’s holding against the Purdue Pharma employees. In its analysis, the Court highlighted the blaring fact that the settlement agreement between Mr. Radcliff and Purdue Pharma did not include signatures by the other Purdue Pharma employees and therefore did not invoke a res judicata analysis- that is, the prior settlement doesn’t preclude further action. The Court did, however, remand the case to the District Court to determine whether the employees’ action should be barred on other grounds, namely the public disclosure doctrine.

Your Whistleblower Lawsuit Could Help Save Lives

The case described above involves a highly-addictive, dangerous drug that is being marketed for its exceptional potency and pain-relieving properties. The defendant is allegedly profiting from these assertions and pushing its drug onto any patient willing to try it, regardless of whether it is the appropriate drug for the situation.

The whistleblowers in this case were willing to step forward and shed light on this careless practice, which will hopefully result in a victory for plaintiffs and a reduction in the widespread dissemination of this hazardous narcotic. If you are aware of unethical, fraudulent practices at your place of employment, we encourage you to contact an experienced whistleblower attorney today.