Archive for March, 2011

First Day of “Recent Developments in False Claims Act Litigation” Program Explores Legislative Changes, Government Role

Friday, March 25th, 2011

Attendees of the first day of the Recent Developments in False Claims Act Litigation program witnessed in depth discussion by several leaders in the field. Chair and Moderator Thomas M. Greene started off the program with a presentation on basic tenets of the Act and developing trends in pending and recently resolved cases, building on the written program Introduction which acted as a primer on the False Claims Act for those with less background.

Panelist Kirsten V. Mayer of Ropes & Gray led off discussion of the Fraud Enforcement and Recovery Act’s changes to intent required in the submission of false claims before analyzing case law interpreting Federal Rule of Civil Procedure 9(b)’s requirement to plead fraud with particularity in the context of the False Claims Act. Panelists differed on the direction in which 9(b) pleading was headed in the First Circuit Court of Appeals, but generally agreed that because the elements of proof for some false claims cases had been reduced, the tenor of Rule 9(b) disputes would change, if not necessarily for the benefit of relators.

Greene LLP attorney Michael Tabb, who contributed an article on the effect of the Patient Protection and Affordable Care Act on False Claims Act litigation, then presented changes to the public disclosure bar. In addition to illustrating how the definition of “public disclosure” had changed and the effects of removing the jurisdictional element of the bar, Mr. Tabb detailed the amendments to the bar’s original source exception, highlighting a renewed importance that potential whistleblowers take care with their first steps in exposing fraud.

Gregg Shapiro of the U.S. Attorney’s Office explained federal intervention decisions to begin the second panel. Joseph Savage of Goodwin Procter introduced the topic of earlier unsealing by District Court judges, which led to contentious debate among the panelists on the merits of keeping cases under investigation and so-called “partial unsealing” by the government. Chris Walsh, Chief of the Medicaid Fraud Division at the Office of the Massachusetts Attorney General, then laid out some of the inner workings of the role Massachusetts takes in national False Claims Act cases, the National Association of Medicaid Fraud Control Unit’s procedure in evaluating and coordinating cases, and the relationship between state and federal investigations and interventions.

Thomas M. Greene to Chair “Recent Developments in False Claims Act Litigation” Program at Suffolk University Law School

Monday, March 21st, 2011

On March 24 and 31, Greene LLP attorney Thomas M. Greene will chair a CLE Program held by Suffolk University Law School’s Advanced Legal Studies. The program will feature panelists from all sides of False Claims Act litigation, including counsel for relators, members of the defense bar and attorneys from the United States Attorney’s Office and the Massachusetts Office of the Attorney General. The program is co-sponsored by the Macaronis Institute for Trial & Appellate Advocacy and the Federal Bar Association.

The Fraud Enforcement and Recovery Act of 2009 (FERA) and health care legislation in 2010 (primarily the Patient Protection and Affordable Care Act, PPACA) have amended the False Claims Act in significant ways. The District of Massachusetts is a national leader in False Claims litigation, primarily in the health care and pharmaceutical industries, and so Boston is an ideal place to convene a program to discuss the impact of recent legislative changes. A .pdf file of the program brochure is accessible here.

The Recent Developments program will feature four panels, two on each of the program dates. The first day of the program on March 24 will kick off with opening remarks by Mr. Greene, in which he will discuss some basic aspects of False Claims Act litigation and examine statistics recently released by the Department of Justice and the Office of the Inspector General of the Department of Health and Human Services. An advance copy of Mr. Greene’s Introduction chapter to the written materials may be accessed here, and may be of particular interest as a refresher on the False Claims Act.

The first panel on March 24 will present some preliminary aspects of recent legislative changes and emerging trends in the pleadings phase of False Claims Act litigation. The members of the panel will be Kirsten V. Mayer of Ropes & Gray, Gregg Shapiro of the United States Attorney’s Office, and Michael Tabb of Greene LLP. Later on March 24, the second panel will examine the government’s role in False Claims Act litigation, with particular attention to the interplay between the federal government and Massachusetts, Civil Investigative Demands (CIDs), and the federal government’s general approach to intervention decisions. Joseph F. Savage, Jr. of Goodwin Procter, Rory Delaney, and Chris Walsh, Chief of the Medicaid Fraud Division of the Massachusetts Attorney General’s Office will join Mr. Shapiro on the second panel.

The second day of the program on March 31 will center first on emerging frontiers of False Claims Act litigation and then on causation, damages and settlement issues. Discussing the SEC’s whistleblower provisions, Medicare and Medicaid overpayments, corporate recidivism and expanded criminal enforcement will be Paul G. Levenson, Chief of the Economic Crimes Unit of the U.S. Attorney’s Office for the District of Massachusetts, Suzanne E. Durrell, Marty Murphy of Foley Hoag, and Susan Winkler, Chief of the Health Care Fraud Unit at the U.S. Attorney’s Office in Massachusetts. The members of the fourth panel on causation, damages and settlement issues will be Zachary A. Cunha of the U.S. Attorney’s Office, Brien T. O’Connor of Ropes & Gray, Robert Patten, Managing Attorney of the Medicaid Fraud Division in the Mass. Attorney General’s Office, and Ilyas J. Rona of Greene LLP.

Click here to register for the program.

Judgment Entered for Kaiser on RICO, Unfair Competition Claims

Friday, March 11th, 2011

On March 11, 2011, District Court Judge Patti Saris entered judgment in favor of Kaiser Foundation Health Plan, whom Greene LLP successfully represented as trial counsel in March 2010.  The order officially tripled a jury’s award of damages against Pfizer on RICO claims to $142 million.  In addition, the order updated the court’s previous finding that Pfizer caused damages to Kaiser under California’s Unfair Competition Law, entering judgment on that claim at just under $103 million.  The judgment order, filed by the court on February 22 and entered today, is available here.

The RICO verdict is the first against a pharmaceutical manufacturer and was based on Kaiser’s claim that a pattern of fraud caused Kaiser to pay for prescriptions of the drug Neurontin for a variety of off-label indications.  Although Neurontin was only approved by the FDA as an adjunctive treatment for epilepsy and for postherpetic neuralgia, Pfizer and its predecessors marketed the drug for bipolar disorder, migraines, general neuropathic pain, and in doses above those that had been approved by the FDA.  This off-label marketing turned Neurontin into an unexpected blockbuster, with prescriptions for off-label indications outstripping those for approved indications nearly ten to one.  In Greene LLP attorney Thomas M. Greene’s closing argument at trial (reprised in the “Battle of the Lawyers” last November), Greene noted that profits from Neurontin, originally expected to total $500 million over the lifetime of its patent, instead grew to of $1 billion per year, fueled by off-label prescriptions.

Both judge and jury in the case were persuaded by the evidence offered by experts Dr. David Kessler, former head of the FDA, as well as Dr. Kay Dickersin, who testified on selective publication practices designed to boost off-label sales.  Dr. Dickersin concluded that Pfizer and its predecessors misrepresented Neurontin clinical studies by presenting secondary or newly introduced outcomes in some clinical studies as primary outcomes, and in publishing about some clinical studies in high circulation journals while publishing about other results in low circulation journals and even in non-peer reviewed formats.  Dr. Dickersin’s research about publication bias and Neurontin studies was published in the New England Journal of Medicine.

Before Pfizer acquired Neurontin from Warner-Lambert, one Pfizer employee referred to the drug as “the snake oil of the twentieth century,” the last and only time a Pfizer employee would ever candidly admit that Neurontin was ineffective for the myriad of off-label indications for which it was being marketed.  Judge Saris noted that remark in her 146 page findings of fact and conclusions of law issued last October, in which she found Neurontin ineffective for many of these off-label indications.

Before arguing the Kaiser trial in 2010, Greene LLP attorneys also successfully pursued the first off-label marketing claim under the False Claims Act, arguing that marketing drugs off-label constituted pharmaceutical fraud on the government.  In that case, Greene LLP attorneys argued that because off-label promotion practices are illegal, those practices become Medicare and Medicaid fraud when a pharmaceutical company causes non-reimbursable off-label prescriptions.