By Rebecca Mayo, J.D.
A district court in Florida granted GE Healthcare, Inc.’s motion to dismiss a qui tam action because showing a chain of events that would logically lead to a doctor or hospital submitting a false claim was not enough evidence to show a violation of the False Claims Act (FCA), there must be proof that a false claim was actually submitted (U.S. ex rel. Patel v. GE Healthcare, Inc., September 28, 2017, Hernandez Covington, V.).
GE operates 31 nuclear pharmacies in the United States, where it produces radiopharmaceuticals through a process of compounding drugs. In 2014, a board-certified nuclear pharmacist and former employee at GE’s nuclear pharmacy in Tampa filed a qui tam action against GE. The relator alleged that GE routinely ignores FDA instructions and injected up to double the amount of radioactivity, which activates the drugs, into drug kits for certain drugs in order to produce more doses from each kit. The complaint further alleged that GE labels radiopharmaceuticals with expiration dates well beyond the time specified in the package inserts in the drug kits. Additionally, GE allegedly used expired Iodine-131 stock solution to make diagnostic capsules for thyroid uptake tests.
The relator contends that these drugs are compounded in violation of GE’s state license and are "misbranded" and "adulterated" in violation of the Food, Drug and Cosmetic Act (FDC Act), and therefore not reimbursable by government programs. Since the drugs are not reimbursable, the relator alleges that GE caused physicians and hospitals to submit false claims for the drugs. The relator also contends that GE’s labels and invoices falsely indicated that the drugs were FDA-approved, which constitutes a false record or statement material to a false claim.
Public Disclosure. To determine if an FCA action can overcome the public-disclosure bar, the court must consider three things: (1) whether the allegations have been publicly disclosed; (2) if so, whether the allegations are based on, or substantially the same as, the publicly-disclosed allegations; and (3) if so, whether the relator is an "original source" of the information. Here, a federal action was previously filed in 2006 by a relator who alleged that GE encouraged health care providers to inject excess radioactivity into a drug when preparing doses on-site. However, the previous action challenged GE’s practices as a manufacturer, while this action alleges that GE itself injected excess radioactivity, in GE’s capacity as a nuclear pharmacy. The court also considered that the relator’s allegations span the change made to the public-disclosure bar by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), but determined that the public-disclosure bar did not apply under either version of the statute.
Presentment of a False Claim. The relator’s claim requires an allegation of the actual presentment of a claim with particular facts about the fraudulent submission to the government. The relator does not need to attach a representative claim or provide exact billing data, but must contain some indices of reliability that a false claim was actually submitted. While the relator was able to show that the "adulterated" drugs went to doctors who had Medicare and Medicaid beneficiaries as patients and that two of the drugs were specifically used for cardiac tests primarily used for patients within the Medicare age range, the allegations did not contain enough specificity to identify fraudulent submissions to the government. The court granted GE’s motion to dismiss without prejudice due to the relator’s failure to allege the presentment of any claim with particularity.
False Statement Material to a False Claim. The relator alleged that GE falsely claimed that the drugs were FDA-approved. However, this statute was codified in 2008 and the previous version 31 U.S.C. §3729(a)(2) requires different elements of proof. The relator’s claims date back to 2004 and therefore span both versions of the statute. The court dismissed this complaint sua sponte in order for the relator to re-plead his claim in separate counts.
The case is No. 8:14-cv-120-VMC-TGW.
Attorneys: Charles T. Harden, U.S. Attorney's Office, for the United States of America. David Barnett Weinstein (Greenberg Traurig, PA) for GE Healthcare, Inc.
Companies: United States of America; GE Healthcare, Inc.
MainStory: TopStory CaseDecisions CMSNews FDCActNews AdulterationNews DrugBiologicNews FCANews FraudNews HealthReformNews MisbrandingNews PrescriptionDrugNews ProgramIntegrityNews QuiTamNews FloridaNews
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