On October 7, 2013, in evaluating a pending cert petition, the
U.S. Supreme Court invited the Office of Solicitor General to
provide its views regarding the level of specificity required when
alleging activities in violation of the civil False Claims Act
(FCA) (United States ex rel. Nathan v. Takeda Pharmaceuticals North
America, No. 12-1349, order 10/7/13).
On May 10, a pharmaceutical sales manager petitioned the Supreme
Court to reinstate his whistleblower lawsuit alleging that Takeda
defrauded the government by presenting false claims in connection
with its marketing of the drug Kapidex, a proton pump inhibitor.
The United States and multiple states' attorneys general have
declined to intervene in the action which generally alleges that
Takeda engaged in a marketing/sales program to promote off-label
use of Kapidex resulting in the improper presentation of claims for
reimbursement to government health care programs. While having been
granted three opportunities to allege specific examples of
submission of such false claims, the Fourth Circuit in January
unanimously affirmed the district court's dismissal of the
Third Amended Complaint for failure to plead fraud with
particularity as required by Federal Rule of Civil Procedure
9(b).
Highlighting a split in the circuit courts regarding the level of
specificity required for FCA complaints under Rule 9(b), Nathan
asserts that the more lenient standards of the First, Fifth,
Seventh, and Ninth Circuits should apply as he sufficiently alleged
a "scheme" to submit false claims. Takeda argues that
Nathan's failure to identify any actual false claims or to
reliably demonstrate that such a false claim was presented (rather
than may have been presented) to the government fails under any
reasonable interpretation of the Rule 9(b) requirements.
This year, the First, Fifth, and Ninth Circuits have reaffirmed
their respective positions regarding 9(b)'s specificity
requirements in FCA cases, and we will continue to monitor this
case and further developments on this important threshold
issue.
This article is presented for informational purposes only and is not intended to constitute legal advice.