Health Law Daily Government’s interest in conserving resources sufficient to dismiss qui tam action
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Thursday, November 7, 2019

Government’s interest in conserving resources sufficient to dismiss qui tam action

By Rebecca Mayo, J.D.

A court found that the government had a valid interest in conserving its resources by dismissing a qui tam action that it found had no factual or legal support without intervention.

Where the government has engaged in an extensive investigation and met with relators numerous times to gather information, it is not arbitrary for the government to ultimately decide to dismiss a qui tam action without intervention. A district court found that the government is entitled to some deference in its decisions to dismiss qui tam actions in order to avoid violating the separation of powers doctrine. The court granted the government’s motion to dismiss a qui tam action against AstraZeneca after finding that the dismissal was within the government’s discretion and was not arbitrary (United States ex rel. Scef, LLC v. Astrazeneca, Inc., November 5, 2019, Lasnik, R.).

Claims. Relators filed a claim against AstraZeneca alleging violations of the Anti-Kickback Statute in their marketing of the drugs Brilinta, Bydureon and Symbicort. The relators claimed that AstraZeneca engaged in "white coat marketing" and unlawfully promoted their dugs Clinical Educators. According to the relators, AstraZeneca provided free nursing services to physicians and free reimbursement support services, like benefit verifications and follow-ups on referrals, as illegal remuneration in exchange for the providers prescribing their drugs. The government declined to intervene and later filed a motion to dismiss all claims.

Authority to dismiss. The government has the authority to dismiss a qui tam action without actually intervening in the case at all. This power has been likened to the government’s prosecutorial discretion in enforcing federal laws and the power is broad. To test the justification for dismissal the court looks for the identification of a valid government purpose and a rational relation between dismissal and accomplishment of the purpose. If the court determines those two elements have been satisfied, the burden switches to the relator to demonstrate that the dismissal is fraudulent, arbitrary and capricious, or illegal.

Decision. The government asserted that after an extensive investigation it determined that the allegations lacked sufficient factual and legal support and dismissing the action would conserve governmental resources and protect important policy prerogatives of the federal government’s healthcare programs. The court found that Congress intended to create only a limited c heck on prosecutorial discretion to ensure suits are not dropped without legitimate governmental purpose. Here, the government identified a legitimate purpose and plausible reasons supporting the agency decision. The relators argue that the interest of the government is at odds with its own prior policy guidance regarding white coat marketing, however the government explained that the advisory opinion cited by the relators concerned a different type of scenario. The court held that this did not rise to a finding that the dismissal was arbitrary. Further, the government agreed to defer filing the motion to dismiss four times in response to requests from the relators, accepted supplemental evidence and information three separate times, and participated in teleconference or meetings with relators on three separate occasions. Therefore, the court found that the government had a valid interest in conserving its resources and the dismissal was not arbitrary.

The case is No. 2:17-CV-1328-RSL.

Attorneys: Kayla Stahman, US Attorney's Office, for the United States. Laura R. Gerber (Keller Rohrback L.L.P.) for SCEF LLC. Brian R. Zeeck (Hinshaw & Culbertson LLP) for Virtual Marketing Strategies Inc d/b/a VMS BioMarketing a/k/a VMS.

Companies: SCEF LLC; Astrazeneca PLC a/k/a Astra PLC; Astrazeneca Pharmaceuticals LP a/k/a Astra; Virtual Marketing Strategies Inc d/b/a VMS BioMarketing a/k/a VMS

MainStory: TopStory CaseDecisions AntikickbackNews FCANews PrescriptionDrugNews QuiTamNews WashingtonNews

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