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U.S. Government Files Amicus Brief Urging First Circuit to Revive False Claims Act Lawsuit against Pfizer

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Last week, the U.S. government filed an amicus brief urging the U.S. Court of Appeals for the First Circuit to reopen a False Claims Act (FCA) lawsuit against Pfizer Inc. that alleged the drug manufacturer paid kickbacks to physicians who prescribed its drug Genotropin.

The case, U.S. ex rel. Peter Rost v. Pfizer Inc., began in 2003 when relator Peter Rost, a former Pfizer vice president, alleged that the company and its affiliate Pharmacia Corp. engaged in practices involving kickbacks that led to pharmacies submitting false Medicaid claims for Pfizer’s drug Genotropin and that Pfizer induced pharmacies to prescribe the drug for off-label uses. The suit was unsealed in 2005 after the U.S. government opted not to intervene in the case.

In 2010, Judge Patti Saris of the U.S. District Court for the District of Massachusetts ruled that the alleged kickbacks did not constitute a cause of action under the FCA. The ruling, which was based on a theory of implied certification, held that the Medicaid claims that innocent third-party pharmacies submitted were not considered fraudulent within the meaning of the FCA even if Pfizer had violated the Anti-Kickback Statute. The judge also found the companies had not engaged in any illegal off-label marketing of Genotropin.

The government noted that it filed the amicus brief because of its interest in ensuring that the FCA would be used in qui tam lawsuits involving kickback claims. According to the brief:

“an entity that knowingly causes the submission of kickback-tainted claims to Medicare or Medicaid cannot avoid liability under the FCA simply because such claims are submitted by ‘innocent’ third parties…who have no knowledge of the underlying kickbacks.”

In urging the First Circuit to revive the case, the amicus brief also indicates that the First Circuit recently reopened similar qui tam cases against Amgen Inc. and Blackstone Medical Inc. that alleged kickbacks.

Mr. Rost’s attorney recently told reporters that he thinks that the government believes that it is “important to try to prevent the pharmaceutical industry from using these kickbacks to try to taint the judgment of doctors.”

The Employment Law Group© law firm focuses in the areas of employment law and whistleblower protection law, has helped many clients file suit against employers that fraudulently billed the U.S. government, and has established favorable precedents under the retaliation provision of the False Claims Act.

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