Kaitlyn Downs is an Associate in Holland & Knight's Orlando office
In United States of Am. ex rel. Derrick v. Roche Diagnostics Corp., No. 1:14-cv-04601, 2018 WL 2735090 (N.D. Ill. June 7, 2018), the district court denied motions to dismiss filed by Roche Diagnostics (Roche) and Humana in a qui tam action. Roche contracted with Humana to make certain of Roche's products available on Humana's formularies; however, Humana later notified Roche that this contract would be terminated. Shortly thereafter, the relator, a Roche national accounts manager, discovered that Roche had overpaid rebates to Humana, which Roche's finance department valued at $45 million. After extensive negotiations, Roche and Humana agreed that Humana would pay Roche an amount not to exceed $11 million and Roche products would once again be available on Humana's formularies. Furthermore, the parties agreed that competing brand products would be excluded from Humana's formularies.
The relator, who was terminated by Roche, alleged that Roche and Humana engaged in a scheme that violated the Anti-Kickback Statute (AKS), that Roche and Humana violated the False Claims Act (FCA) and that Roche fired her in retaliation for her questioning the lawfulness of Roche and Humana's dealings. The court found unconvincing Humana and Roche's arguments that the relator's complaint failed to meet particularity and plausibility standards because the relator's allegations (1) supported an inference that Humana submitted claims resulting from an AKS violation, (2) provided evidence that Humana and Roche knew the arrangement was unlawful and (3) plausibly supported an inference that Roche's acceptance of an amount less than was owed by Humana was "remuneration" under the AKS. The court further ruled that Roche's motion to dismiss the relator's retaliation claim was not persuasive because the relator had a reasonable belief that Roche's actions could violate the AKS and, in turn, violate the FCA, and because the relator was not tasked with pleading specific violations when reporting the suspected fraud to Roche internally.
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