New Case Against Pharmaceutical Company Unsealed in Colorado-Presents Key Legal Question on Rule 9(b)

avatar
  • LinkedIn

On January 12, 2015, the Colorado district court unsealed the operative pleadings in United States ex rel. Prough v. Sunovion Pharmaceuticals, Inc., Case No. 13-cv-02336-PAB. The complaint alleges that the defendant, a pharmaceutical manufacturer, promoted its drug Latuda, “for off-label, non-approved uses.” The complaint alleges that Sunovian’s representatives both marketed the drug for uses not approved by the Food and Drug Administration and at doses that were not approved.

According to the recently unsealed complaint, Latuda’s only FDA approved use is the treatment of schizophrenia in adults. The complaint alleges that sales representatives were specifically instructed to target practitioners with patient populations outside of the approved demographic–specifically children–and that the sales representatives were given bonuses for successfully marketing the drug to these types of practitioners. The relator alleges that her “target list” included practitioners whose primary practice involved treatment of disorders for which Latuda was not an approved treatment. The complaint alleges that the defendant’s target list for physicians generally included a large number that rarely, if ever, treated patients for schizophrenia. According to the complaint, the company coached sales representatives to avoid mentioning schizophrenia when attempting to market the drug and instead told them to use a broader, more-inclusive label that implied greater approval.

According to the complaint, the relator witnessed one manager tell a doctor during a sales call that he knew that other doctors would diagnose their patients with schizophrenia, rather than other psychotic ailments, just so they could use Latuda and get it reimbursed by Medicaid.

The complaint alleges that the relator complained about the off-label promotion to numerous superiors, none of whom took any corrective action. Eventually, the defendant terminated the relator, which she believes was in retaliation for raising concerns about the off-label marketing of the drug.

While the complaint contains numerous specific examples of discussions the relator had with various key witnesses, identified by specific date, the complaint does not contain any specific allegations about reimbursement requests submitted to a government program. It will be interesting to see how the district court handles the expected Rule 9(b) motion–it will pose the repeated issue of a complaint that is rife with details about the actual fraud, but lacks any specific example of a false claim because that information is under the control of third parties.

The law is unsettled in the Tenth Circuit on this precise point. As one law review article recently explained, on this issue, “the Tenth Circuit is somewhere in the middle because it has embraced the more permissive standard of not requiring an allegation about a specific false claim, without explicitly disavowing its more stringent precedents.” (citing United States ex rel. Lemmon v. Envirocare of Utah, Inc., 614 F.3d 1163, 1172–73 (10th Cir. 2010)). This case may require the Tenth Circuit to pick a side: either follow the “Fifth, Seventh, and Ninth Circuits[, which] have not required a relator to provide details of an ‘actually submitted false claim’ at the outset of FCA litigation,” or follow the “Fourth, Sixth, Eighth, and Eleventh Circuits[, which] have required factually specific claims.”