By Jeffrey H. Brochin, J.D.
Although relator’s evidence of remuneration to doctors was quite strong, Aventis’s responses created a factual dispute that needed to be resolved by a jury.
A federal district court in Pennsylvania has denied both the motion for summary judgment filed by the relator and that filed by Aventis, the relator’s former employer. His qui tam False Claims Act (FCA) lawsuit alleged that Aventis’ reimbursement-assistance program known as the Providing Access to Cancer Therapy Program (PACT) was essentially a remuneration scheme in violation of the Anti-Kickback Statute (AKS). However, despite the fact that the relator presented evidence in support of the requisite elements of an AKS complaint, Aventis’ responses raised sufficient disputes of fact to preclude granting summary judgment in either party’s favor at the current stage of the litigation (U.S. ex rel. Gohil v. Sanofi U.S. Services, Inc., July 21, 2020, Brody, A.).
How the PACT program worked. The relator described how Aventis assisted doctors with obtaining reimbursement for the cancer drug, Taxotere®, during the period 1996 to 2004, which included: assigning reimbursement specialists to handle doctors’ administrative tasks of filing a claim for reimbursement, handling appeals of denials in the event a claim was denied, and offering free replacement vials of the drug if the appeal was unsuccessful. Aventis acknowledged the PACT program but disputed that the reimbursement program satisfied the elements necessary for proving FCA or AKS violations. Both parties filed motions for summary judgment, which, for the reasons stated below, were both denied by the court.
Evidentiary burdens on the relator. To establish an AKS violation, the relator had to satisfy three elements: (1) that the PACT Program constituted "remuneration;" (2) that at least one purpose of PACT was to "induce" doctors to prescribe more Taxotere; and (3) that Aventis behaved "knowingly and willfully." The court found that the relator pointed to sufficient evidence to allow a jury to conclude that: (1) PACT’s replacement-drug feature worked as a functional reimbursement guarantee and was therefore "remuneration;" (2) at least one purpose of PACT was to induce more Taxotere prescriptions; and (3) Aventis knew that replacement-drug features like PACT’s may violate the AKS and thus behaved "knowingly and willfully." However, the court also found that Aventis produced just enough countervailing evidence to send each of those issues to a jury.
Disputing remuneration. The AKS defines remuneration to include "transfers of items or services for free or for other than fair market value." Courts generally interpret the term rather expansively to include anything of value in any form whatsoever. But the OIG’s administrative guidance has acknowledged that pharmaceutical companies often offer support services in connection with the sale of their products, including billing assistance tailored to the purchased products, reimbursement consultation, and other programs specifically tied to support of the purchased product, and therefore, the key question, in the eyes of the OIG, is whether such services have "substantial independent value"—i.e., a value separate from that provided through the pharmaceutical product itself. The court found that the answer is usually "no" when the services in question are limited to information-based administrative support tied a specific product. Accordingly, a genuine issue of material fact existed as to whether the PACT program offered remuneration that was in violation of the AKS.
Drug replacement guarantee. Likewise, the court determined that a jury could find that the promises of replacement-drug vials were the sort of reimbursement guarantees that the OIG views as remuneration under the AKS, but due to Aventis’ argument that the PACT program never provided physicians with a reimbursement guarantee, that aspect of the PACT program was also a dispute to be heard by a jury.
Knowingly and willfully. The court also found that a dispute existed as to the third element of an AKS violation. The FCA only applies to defendants who behave knowingly, and the statute defines knowingly to mean that a person had actual knowledge of the information in question or acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. In legal falsity cases, where the falsehood in question is a violation of an underlying law, regulation, or contractual requirement, the scienter element essentially requires deliberate ignorance or reckless disregard of illegality. Again, the court found disputes of material fact as to whether Aventis acted knowingly as to the legal falsity claim that they violated an underlying law, regulation, or contractual requirement.
Materiality dispute. The relator argued that the government would not have paid the reimbursements had they been aware of Aventis’ conduct under the PACT program. But Aventis countered that the existence of their PACT program was open and transparent as evidenced by the fact that PACT reimbursement specialists identified themselves as such when pursuing reimbursement claims on behalf of doctors, and that Medicare nevertheless paid the claims. The court considered both arguments and determined that although Aventis’ evidence may show that the government knew, at times, that PACT officials were involved in the claims process, it did not demonstrate an awareness of an actual AKS violation. Accordingly, this too was deemed to be an issue in dispute to be properly presented to a jury.
For the foregoing reasons, the court denied both parties’ motions for summary judgment.
The case is No.: 2:02-cv-02964-AB.
Attorneys: Carl D. Poplar (Carl D. Poplar, P.A.) for the United States. Michael L. Koon (Shook Hardy & Bacon L.L.P.) for Sanofi US Services Inc. and Aventisub LLC.
Companies: Sanofi US Services Inc.; Aventisub LLC
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