Lower Court’s False Claims Act Ruling Assailed by US and Actos Victims in Amicus Briefs

The U.S. government wants an appeals court to overturn a federal judge’s ruling in a whistleblower case that accused the Takeda Pharmaceutical Company of failing to disclose adverse events associated with their drugs to the U.S. Food and Drug Administration (FDA). Pharmaceutical companies have taken notice of the ruling because it could be used to preclude whistleblower claims under the False Claims Act should the ruling stand. In other words, the ruling could strip away the government’s ability to enforce key regulations that stop drug companies from cheating the government and threatening public safety.

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Last November, U.S. District Court Judge F. Dennis Saylor dismissed two whistleblower lawsuits filed by Dr. Helen Ge, a former safety consultant for Takeda. According to Dr. Ge, the company misrepresented or altered adverse events associated with Uloric, Takeda’s gout drug. Furthermore, Dr. Ge claims that Takeda did not report instances of bladder cancer or congestive heart failure associated with Actos, a type 2 diabetes medication.

Dr. Ge claims that if Takeda had placed proper warnings on labels or issued safety alerts, the drugs would not have been as widely prescribed, and government health care agencies would not have paid for as many prescriptions. Also, if governmental entities had been properly apprised of the risks, such as bladder cancer, Actos’ approved uses may have been curtailed and its appearance on approved formularies possibly eliminated.

In his ruling against Ge, Judge Saylor stated that Dr. Ge did not provide any specific details of false claims, such as transaction details. Judge Saylor also maintained that the adverse events that Takeda failed to report were not necessarily tied to how much federal health care agencies paid for the medications. Finally, and probably most disconcerting for the government, Judge Saylor ruled that Dr. Ge should have petitioned the FDA to go after Takeda rather than bringing charges against Takeda in court.

The last part of the ruling is likely the biggest reason the government stepped in and filed an amicus brief less than two weeks ago, urging the First Circuit Court of Appeals (where Ge is appealing her cases) to overturn Judge Saylor’s decision. If the ruling were to stand, pharmaceutical companies could lie to the FDA about adverse events reports with no fear of being exposed to false claims liability.  The False Claims Act – the government’s most effective mechanism for combating fraud – would be compromised.

“In concluding that (Ge) failed to state a claim, the district court indicated that the existence of a regulatory mechanism that allows citizens to petition the FDA could preclude liability under the False Claims Act,” the U.S. brief reads. “The district court further suggested that the False Claims Act liability could never be premised on a failure to comply with the FDA’s adverse reporting requirements. Its reasoning on these points is mistaken, and were this Court to adopt such reasoning, the government’s enforcement of the False Claims Act could be significantly impaired.”

Michael L. Baum, one of Dr. Ge’s attorneys and senior managing partner at Baum, Hedlund, Aristei & Goldman, expressed gratitude about the government taking action in filing the amicus brief. “We are pleased that the United States submitted such a thoughtful, carefully reasoned amicus brief. We appreciate the supportive positions taken with respect to the legal theories asserted by Dr. Ge. The United States’ brief corroborates our briefing in the appeal and our motion for reconsideration. In particular, the government’s amicus brief contends that misleading consumers with unreported adverse events or a deceptive label can create False Claims Act (‘FCA’) liability. Administrative or any other remedies are not substitutes for FCA claims, a mistake in the lower court’s ruling highlighted by both the United States’ and Dr. Ge’s briefing.”

The Miller Firm, which represented Jack Cooper in the first Actos case to go to trial, also filed an amicus brief in an effort to overturn Judge Saylor’s ruling. The Miller Firm’s amicus brief points out that Dr. Ge’s claims are supported by an overwhelming amount of now publicly available documentary evidence showing Takeda’s awareness of a link between Actos and bladder cancer and its marketing attempts to suppress that link. The brief states that “patients and prescribers were well under-informed regarding adverse events that, even according to Takeda’s marketing research, would have been extremely important clinical information for FDA and physicians alike; and that but for this fraud, would have made a substantial and material difference in the prescribing habits and use of Actos.”

The case is United States of America ex rel. Helen Ge v. Takeda Pharmaceutical Co., Case No. 13-1088 and Case No. 13-1089, U.S. Court of Appeals for the First Circuit.

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