By Nicole D. Prysby, J.D.
Bayer argued that an appellate court should decide whether a fixed-fee payment system renders any alleged fraud regarding Bayer’s drug Trasylol® immaterial as a matter of law, as the Government pays the same price for a surgical procedure regardless of whether Trasylol is used.
Bayer may not pursue an interlocutory appeal on the question of whether it may be liable under the False Claims Act (FCA) for Medicare and Medicaid reimbursement claims for surgical procedures in which Trasylol® was administered, held a federal district court in New Jersey. In April 2019, the district court denied Bayer’s motion for partial summary judgment, rejecting Bayer’s argument that it cannot be liable under the FCA for the claims because the Government pays the same price for a given procedure regardless of whether Trasylol is used (the "bundled payment defense"). The court declined to certify the question for interlocutory appeal because Bayer failed to demonstrate that immediate appeal would materially advance the litigation’s ultimate termination. The Trasylol-related FCA claims are only one set of claims within a larger lawsuit and even a favorable appellate decision for Bayer would not completely dispose of the relator’s Trasylol-related FCA claims (U.S. ex rel. Simpson v. Bayer A.G., July 16, 2019, Vazquez, J.).
FCA and retaliation claims. The relator is a former employee of defendants Bayer Corporation, Bayer Healthcare Pharmaceuticals, Inc.; Bayer Healthcare, LLC (collectively, Bayer), who filed a qui tam action under the whistleblower provisions of the FCA in 2005. The relator alleged that Bayer engaged in unlawful marketing, including off-label marketing and payment of kickbacks, in order to increase the market shares of its prescription drugs Trasylol® and Avelox®.
In April 2019, the district court denied Bayer’s motion for partial summary judgment. Bayer argued that it cannot be liable under the FCA for claims for surgeries during which Trasylol was administered because the Government pays the same price for a given procedure regardless of whether Trasylol is used; therefore any alleged misrepresentation regarding Trasylol is not capable of influencing the Government’s decision to pay a claim. The court rejected Bayer’s arguments, holding that Bayer may be liable under the FCA for claims for Medicare and Medicaid reimbursement for surgical procedures in which Trasylol was administered regardless of whether: (1) the relevant requests were bundled rather than itemized; and (2) the administration of Trasylol affected the total amounts of the corresponding reimbursements for said procedures. Bayer motioned to certify that decision for interlocutory appeal (see Bayer may be liable for causing submission of false claims related to Trasylol®, April 26, 2019).
Interlocutory appeal certification denied. The court declined to certify the question for interlocutory appeal because Bayer failed to demonstrate that immediate appeal would materially advance the litigation’s ultimate termination. The Trasylol-related FCA claims form only one set of claims within a larger lawsuit and even if Bayer prevailed on the question in front of the Third Circuit, the Avelox-related FCA claims and FCA retaliation claim would remain. Also, a favorable appellate decision for Bayer would not completely dispose of the relator’s Trasylol-related FCA claims. For example, the relator would still be able to proceed on Trasylol-related FCA claims for physician and hospital claims billed under Medicare Part B and claims at critical access hospitals in rural areas. The court rejected Bayer’s argument that certification would drastically reduce the scope and complexity of any discovery and trial. At this point, discovery is largely incomplete and ongoing discovery may uncover more evidence to support the relator’s claims. Consequently, an interlocutory appeal very well may not meaningfully reduce the cost or burden of discovery.
The case is No. 2:05-cv-03895-JMV-JAD.
Attorneys: Charles Scott Graybow for the United States. David Andrew Bocian (Kessler Topaz Meltzer & Check LLP) for Laurie Simpson. Lawrence S. Lustberg (Gibbons, PC) for Bayer AG, Bayer Healthcare, LLC. d/b/a Bayer Healthcare Pharmaceuticals, Inc. and Bayer Corp.
Companies: Bayer AG; Bayer Healthcare, LLC d/b/a Bayer Healthcare Pharmaceuticals, Inc.; Bayer Corp.
MainStory: TopStory CaseDecisions CMSNews BillingNews DrugBiologicNews FCANews FraudNews PaymentNews PrescriptionDrugNews NewJerseyNews
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