Court Allows False Claims Act Case Involving Janssen’s HIV/AIDS Drugs to Proceed

On May 31, 2017, the United States District Court for the District of New Jersey allowed relators’ False Claims Act (“FCA”) lawsuit against Janssen to proceed to litigation.  United States et al. v. Johnson & Johnson, et al., Civ. A. No. 12-7758, 2017 WL 2367050 (D.N.J. May 31, 2017).  Although claims against Janssen’s parent company, Johnson & Johnson, were dismissed, the Court denied Janssen’s motion to dismiss the lawsuit in all significant respects.  Id. *8.  The government had previously declined to intervene in the action, and the case will be litigated by relators’ counsel, Berger Montague, and Cohn Lifland Pearlman Herrmann & Knopf LLP.

Lawsuit Summary

The lawsuit alleges that defendant Janssen purposely misrepresented, misbranded, and illegally marketed two potentially dangerous, expensive AIDS drugs – Intelence and Prezista – and paid kickbacks to certain physicians to influence them and others to prescribe these drugs. Defendant’s misleading marketing of Prezista concealed a dangerous side effect of the drug – elevated lipids – and falsely minimized the very serious risk of cardiovascular disease for HIV and AIDS patients. Defendant also aggressively and knowingly marketed Intelence off-label, for “treatment-naïve” patients, contrary to the label, as well as for once-daily use, which was directly contrary to its limited FDA approval for twice a day use.

The Decision

In his opinion, Judge Michael A. Shipp held that relators’ complaint adequately pled “falsity” and “materiality,” required elements under the FCA.  2017 WL 2367050, *4-6. Further, the complaint satisfied the heightened pleading requirements for fraud under Rule 9(b) of the Federal Rules of Civil Procedure.  Id. *6-7.

Relying on the Third Circuit’s Petratos decision, the district court upheld allegations that use of a drug within its overall label class could still constitute false claims if the drug was not reasonable and necessary for specific patients:  “FDA approval does not per se render a drug ‘reasonable and necessary,’ but rather a drug ‘must also be ‘reasonable and necessary for the individual patient.’”  Id. *5.

The court found that materiality was satisfied by the allegations that there had been false certifications rendering the claims “ineligible for reimbursement.”  Id. *5-6.

Finally, the court followed established Third Circuit law in holding that a plaintiff need not plead specific false claims if their particularized allegations lead to a strong inference that claims were actually submitted.  Id. *6-7 (citing Foglia v. Renal Ventures Mgmt., LLC, 754 F.3d 153 (3d Cir. 2014)).