U.S. Supreme Court to Consider Specificity Requirements Under False Claims Act

Earlier this week, the U.S. Supreme Court engaged the U.S. Solicitor General to provide additional information and background about the pleading requirements contained within the False Claims Act. The Court is particularly interested in the level of factual background necessary in a whistleblower’s initial Complaint in order for the case to continue. As you may know, the rules of civil procedure impart varying levels of specificity requirements depending upon the nature of the cause of action. For instance, pleadings alleging fraud or mistake must include additional background facts (known as heightened pleading) whereas general negligence claims do not.

The issue with which the Court is grappling centers around how the heightened pleadings requirements contained within Rule 9(b) of the Rules of Federal Civil Procedure with regard to fraud apply to pleadings filed under the False Claims Act. Presently, the federal circuit courts are split on the issue, with the First, Fifth, Seventh, and Ninth Circuits holding there is no duty to submit heightened pleadings, while others circuits and litigants believe Rule 9(b) should apply to any allegation of fraud, including those under the False Claims Act.

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Court to Consider FCA Case United States ex rel. Nathan v. Takeda Pharmaceuticals North America

The case giving rise to the Court’s review of pleadings requirements in FCA claims involves the improper submission of invoices for reimbursement to Medicare and Medicaid. The whistleblower in this case is a pharmaceutical sales manager for the drug company Takeda. and the relator alleges his employer unlawfully marketed its drug Kapidex in violation of its approval provisions from the FDA. Kapidex is approved for use as a proton pump inhibitor used to suppress the secretion of gastric acid and effects of conditions like acid reflux and esophageal erosion.

The drug is approved in 30mg and 60mg doses. The crux of Petitioner’s argument centers around his assertion that Takeda has unlawfully failed to market the 30mg dose to physicians and specialists and insists upon marketing the 60mg dose only – thereby violating the FDA’s approval provisions. Any subsequent submissions for reimbursement for a drug used in violation of FDA rules, known as “off-label marketing,” is expressly prohibited by the FCA.

The case carries a lengthy and procedural history, including the submission of several amended complaints and various other technical issues. To make a long case much shorter, the litigation has arrived at the U.S. Supreme Court for review, primarily on the issue of the pleading requirements, which are ripe to be settled. Presently, the Fourth, Sixth, Eighth, and Eleventh Circuits require FCA litigants to “allege with particularity that specific false claims actually were presented to the government for payment” while the Circuits mentioned above require the “particular details of the scheme to submit false claims.” This dichotomy presents a strong likelihood that a whistleblower in one circuit could face dismissal while the same whistleblower could file in another circuit with no problem.

Reporting fraud helps protect others from injury

While the case against Takeda focuses primarily on technical procedural issues, at its core it is designed to protect patients from unlawful marketing strategies by pharmaceutical companies – a policy from which we could all benefit. If you are aware of certain misconduct with regard to prescription medications, marketing or off-label use, a whistleblower attorney like those of Berger Montague may be able to help. For more information, call our office today.