On May 4, 2011, Suffolk University published an interview with Greene LLP Managing Partner Thomas M. Greene.  In the podcast, which is available on Legal Talk Network, Mr. Greene was interviewed by Suffolk University Law School Professor Linda Sandstrom Simard about recent changes to False Claims Act practice in qui tam cases.  Mr. Greene explained how the District of Massachusetts has become the epicenter for False Claims Act litigation, particularly since Greene’s 2004 settlement of Franklin v. Parke-Davis for $152 million. The Franklin case, which centered on Parke-Davis and Pfizer’s marketing practices of the drug Neurontin, set off a series of off-label promotion cases against pharmaceutical companies – contributing to the reputation of Massachusetts as a leader in health care fraud cases.

False Claims Act litigation has been a core practice area for Greene LLP since the firm’s inception.  Click here to learn more about the False Claims Act, recent changes, and how Mr. Greene started a career in False Claims Act litigation.

Last month, Greene LLP attorneys resolved a bad faith insurance case against Unum Life Insurance Company and subsidiary The Paul Revere Life Insurance Company.  The case alleged that Unum wrongfully denied claims made by a Greene LLP client under two income insurance policies purchased in the 1980s.  The settlement amount of $700,000 resolves all claims by Greene LLP’s client under M.G.L. c.93A and c.176D(3) and for breach of contract related to the income insurance policies.

Greene LLP’s client, a licensed social worker in private practice, was diagnosed with a mental illness several years after purchasing the income insurance policies.  As a result, he was unable to maintain his practice, triggering benefits under the two policies.  Due to the same mental illness, the Greene LLP client was unable to keep up with UnumProvident and Paul Revere’s onerous requirements to justify benefits.

In 2004, insurance regulators in Massachusetts, Maine and Tennessee, on behalf of themselves and other states and jurisdictions, conducted an investigation into the claim denial practices of Unum, Paul Revere, and Provident Life and Accident Insurance Company.  The regulators levied a $15 million fine after they found systematic and widespread “unfair claim settlement practices” by the companies, including failures to evaluate “the totality of the claimant’s medical condition.”  The regulators also found “a significant number of instances” in which an inappropriate burden had been placed on claimants to justify eligibility for benefits.

Greene LLP argued that both of these unfair practices played a role in a bad faith denial of its client’s claims for benefits.  By improperly shifting a burden to prove eligibility to the insured, Greene LLP attorneys argued, Unum and Paul Revere took advantage of someone who was especially ill-equipped to fight their practices – because of his mental illness, the very reason he suffered a loss of income in the first place.  “Unum’s claim denial practices were unreasonable,” said lead attorney Thomas M. Greene.  “Individuals like my client should not have to prove their eligibility for benefits by responding to mountains of paperwork, especially if mental illness makes it particularly difficult to do so.  That’s bad faith.”

The successful Kaiser case which resulted in a $147 million jury verdict led the American Association for Justice to invite Greene LLP attorney Thomas M. Greene to present at the AAJ’s Winter Conference during its “Sunrise at Litigation” panel, a staple at AAJ semiannual conventions.  Leading members of the plaintiff’s bar are invited twice a year to present developing new legal theories that have been successfully applied by plaintiff’s attorneys.  Mr. Greene’s presentation, entitled “How to Win a RICO Case Against Pharmaceutical Giants for Fraudulent Off-Label Promotion,” was featured on February 9.  His written paper of the same name was included in the written materials for the convention, and was also republished by the AAJ’s Section on Toxic, Environmental and Pharmaceutical Torts in its Spring newsletter.

In the presentation, Mr. Greene described the myriad difficulties involved in satisfying RICO’s robust legal requirements.  Arguing it had suffered millions of dollars in damages by paying for worthless off-label prescriptions, Kaiser Foundation Health Plan established a pattern of racketeering activity by Pfizer and its associates: mail fraud that misrepresented the proven efficacy of Neurontin for a variety of off-label indications.  Before the trial phase of litigation, an “enterprise” was established between Pfizer and its medical marketing firm, in addition to a second enterprise formed through Pfizer’s association with its advertizing agency. Kaiser proceeded to trial against Pfizer as the “bellwether case” selected by Judge Saris, who presides over the Neurontin Multi-District Litigation.

In March 2011, Judge Saris entered judgment in the Kaiser case, officially trebling the jury’s verdict of $47 million to $142 million and updating Kaiser’s Unfair Competition Law damages.  Said Greene, “only through treble damages provisions like that of RICO or of the False Claims Act can we prevent pharmaceutical companies from engaging in off-label promotion and treating the verdicts or settlements that result as a cost of doing business.”

Much like how the Neurontin False Claims Act case has spurred over $7 billion in subsequent litigation, the Kaiser case may prove to be a template for other cases against pharmaceutical companies for fraudulent off-label marketing of drugs.  “Fraudulent off-label promotion endangers public safety,” said Greene.  “We have only begun to turn the tide.”

On March 31, the Recent Developments in False Claims Act Litigation program concluded at Suffolk University with two panels discussing new frontiers in liability and emerging trends in causation, claims analysis and settlements in False Claims Act cases. Each panel featured leaders in the field, including several government attorneys. While all sides of False Claims Act cases were presented, Greene LLP attorney Ilyas J. Rona wound up the program with a close look at the experience of whistleblowers, substantiating the importance of their involvement in cases that involve industries particularly prone to fraud on the government, particularly health care. Mr. Rona submitted a paper for the program backed by litigation statistics and feedback from False Claims Act whistleblowers entitled “The Whistleblower Perspective: Why They Do It, and Why We Need Them.”

After program chair and moderator Thomas M. Greene introduced the members of the first panel, Assistant United States Attorney Paul Levenson led off the evening with a description of the SEC’s new whistleblower regulations, which have been proposed and are due to become final in less than three weeks. Mr. Levenson, who serves as Chief of the Economic Crimes Unit of the U.S. Attorney’s Office in Massachusetts, commented on the “tug of war that has erupted” over the SEC’s proposed regulations, and noted that unlike False Claims Act cases and the IRS whistleblower program, the conduct potentially at issue which could result in rewards for SEC tipsters does not necessarily involve fraud on the government. Attorney Suzanne Durrell then presented on the changes made by the Patient Protection and Affordable Care Act on health care providers’ obligation to return Medicare and Medicaid overpayments. Marty Murphy of Foley Hoag and Assistant United States Attorney Susan Winkler, Chief of the Criminal Division’s Health Care Fraud Unit in Massachusetts, concluded the first panel with a discussion of increasing efforts to hold executives in the health care industry accountable through criminal prosecutions. In particular, the discussion honed in on an apparent revival of the Park doctrine, through which executives may be prosecuted for misdemeanors due to the conduct of their companies.

Robert Patten, Managing Attorney in the Medicaid Fraud Division of the Massachusetts Attorney General’s Office, started the night’s second panel with a discussion of parallel civil and criminal investigations in False Claims Act cases. Mr. Patten cited the “strong link” between both types of investigation, noting that like most state Medicaid Fraud Units, his office has both civil and criminal authority. In fraud cases in which there may be criminal conduct with national implications, the federal government generally takes the lead; Assistant United States Attorney Zachary Cunha, Deputy Chief of Affirmative Civil Litigation in the Massachusetts United States Attorney’s Office, explained that when the United States Attorney’s Office picks a track for investigations, they must then be careful that information is not improperly disseminated between civil and criminal divisions. Panelist Brien O’Connor, a partner at Ropes & Gray in Boston, credited the skill of both state and federal attorneys, noting that investigations are often “very much a joint federal and state effort.” Mr. O’Connor highlighted the additional role played by the Office of the Inspector General of the Department of Health and Human Services, which has authority to exclude individuals and companies from participation in government health care programs.

Mr. O’Connor also introduced many of the intricacies in False Claims Act settlement negotiations, leading to a lively discussion among the panelists. Mr. Cunha noted that whether the federal government has intervened becomes a main determinant in how settlement discussions progress, that claims data is often a big factor and that defendants typically want a global resolution in settlement negotiations. Mr. Patten added that coordinating the claims of all participating states is a difficult process because only sovereign states can sue under their own false claims laws, and because “some states don’t have the same arrows in their quiver” that Massachusetts has. The panel concluded with Mr. Rona’s presentation on whistleblowers and their perspective, which drew questions from program attendees.

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.

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.

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.

On February 9, 2011, Greene LLP attorney Thomas M. Greene led a seminar hosted by the Center for Clinical Trials at the Bloomberg School of Public Health.  The seminar drew from Mr. Greene’s experience with Neurontin litigation.  Open to all students at Johns Hopkins University, the seminar was entitled “How Industry Distorted the Scientific Evidence and Turned ‘Snake Oil’ Into a $10 Billion Blockbuster: Lessons for Public Health.”

Mr. Greene was invited by Dr. Dickersin to illustrate to public health students how a pharmaceutical company can enjoy enormous success through marketing messages that are not based in scientific evidence.  “It’s important to show future public health professionals just how easy it is for a pharma company to perpetrate a fraud this expansive,” said Greene.  “That fraud took years of dedicated effort to expose.  The Neurontin litigation was a true example of collaboration between medical doctors and experienced litigators, to ensure that the medical literature, the evidence base physicians most rely on, remains untainted by fraudulent marketing messages.”

In 2010, Mr. Greene tried a RICO case against Pfizer that centered on fraudulent off-label promotion of the drug Neurontin, leading to a $47 million dollar verdict that was automatically trebled and a $102 million judgment under the California Unfair Competition Law.  Dr. Kay Dickersin’s research and testimony were essential to the RICO case.  She reviewed Pfizer’s clinical trial research reports and compared them to the medical journal articles that were supposed to describe the results of the research, revealing a systematic scheme to show efficacy for off-label uses by suppressing negative results and misrepresenting others as positive.  Dr. Dickersin published her research on Neurontin research and publication practices in the New England Journal of Medicine, as senior author of the article entitled Outcome Reporting in Industry-Sponsored Trials of Gabapentin for Off-Label Use.

Experts like Dr. Dickersin and Dr. David Kessler, former Commissioner of the FDA, were crucial to the RICO case’s success – but the jury verdict also would not have been possible without the investigative lawyering spearheaded by Greene LLP attorneys over a fourteen year period.  For attendees of the Johns Hopkins seminar, Mr. Greene carefully described the off-label strategy of Pfizer and its predecessors and the methods by which the company converted its illegal strategy into billions in off-label sales.  Mr. Greene pointed out several poignant documents uncovered by his firm during discovery, including the email in which a Pfizer employee stated: “Gabapentin is the ‘snake oil’ of the twentieth century.  It has been reported to be successful in just about everything that they have studied.”

Mr. Greene was grateful for the opportunity to speak to Johns Hopkins students about Neurontin, but cautioned everyone who attended that if they were to experience off-label marketing practices in the future first-hand, those practices might not look exactly like the fraud he had illustrated.  “I wanted to be sure those students knew that they will have to be on guard,” said Greene.  “The Franklin False Claims Act case that I settled in 2004 was the first time that a pharmaceutical company was held accountable for off-label promotion.  Since then, it doesn’t seem to me like companies have stopped promoting their drugs off label; they’ve just gotten more clever about it.  Staying one step ahead is the challenge that faces attorneys and public health professionals in the future.”

In its January 24, 2011 edition, Massachusetts Lawyers Weekly recognized a $142 million verdict against Pfizer on behalf of Kaiser Foundation Health Plan as the second highest in the state for 2010.  The March verdict in the United States District Court for the District of Massachusetts dwarfed the largest verdict of 2009, which was $15.7 million.  As described here, the verdict followed a five week trial in which Greene LLP attorney Tom Greene and several others detailed evidence that Neurontin, an anti-epileptic drug, was illegally promoted for off-label conditions such as bipolar disorder and migraines.

In 1996, Greene LLP attorneys filed a False Claims Act case on behalf of David Franklin against Parke-Davis, a pharmaceutical company later acquired by Pfizer.  That case, which recovered $430 million in civil damages and fines for the United States and state governments, represented the first time that the False Claims Act was used against a pharmaceutical company for illegal off-label promotion.  In that case, Greene LLP attorneys developed evidence that Parke-Davis and Pfizer’s illegal promotion caused doctors to prescribe Neurontin for unapproved uses, which were ineligible for Medicare and Medicaid reimbursement.  Since the 2004 settlement, pharmaceutical companies have paid approximately $6 billion to settle claims of off-label promotion.

Just as the Neurontin False Claims Act case was the first of its kind, the March verdict recognized by Lawyers Weekly represents the first time that the Racketeer Influenced and Corrupt Organizations Act was successfully used against a pharmaceutical company for off-label promotion.  The intricate publication and promotion campaign of Pfizer and its predecessors involved over a dozen clinical studies, with negative results buried and other results overstated.  From the Lawyers Weekly article (subscription required):

For Greene, the greatest hurdle may have been illustrating to the jury the nature of the testing in question, particularly when some doctors were still prescribing Neurontin for pain and bipolar disorder.  “It was a battle between marketing-based medicine and evidence-based medicine,” said Greene, who won Lawyers Weekly’s 2010 Battle of the Lawyers competition for his re-enactment of the trial’s closing argument.

The Kaiser verdict may prove to be a blueprint followed in other off-label promotion cases brought by health care providers misled into paying for prescriptions of ineffective drugs.  From the Lawyers Weekly article:

“This was a really significant finding for pharma companies,” Greene said.  “It puts them on notice that the suppression and misrepresentation of critical data is not only scientific fraud, but also legal fraud.  Prior to this, that connection wasn’t entirely clear.”

Both judge and jury found that the conduct of Pfizer and its successors defrauded Kaiser of tens of millions of dollars.  In November, the District Court awarded $95,286,518 in damages to Kaiser under California’s Unfair Competition Law.

Greene LLP attorney Thomas M. Greene won the 2010 Battle of the Lawyers which was held on November 4, 2010 at the C. Walsh Theater at Suffolk University in Boston.  Massachusetts Lawyers Weekly sponsors the annual event in which four prominent trial attorneys reprise a condensed version of their closing arguments from actual trials conducted within Massachusetts.  A “jury,” comprised of retired judges, law school faculty members, members of the news media, and other Massachusetts trial attorneys, returned a “verdict” that Mr. Greene had delivered the most compelling argument.  The 2010 “Battle of the Lawyers” was featured by Sacha Pfeiffer on National Public Radio.  The Radio Boston segment, which includes audio of Mr. Greene’s argument, is available here.

Mr. Greene delivered a shorter version of the closing argument he presented to a federal jury in March 2010, when he represented Kaiser Foundation Health Plan against Pfizer, Inc. in a RICO trial concerning fraudulent marketing of the prescription drug Neurontin.  Shortly after he delivered his closing, the federal jury awarded Mr. Greene’s client over $47 million in damages, which was trebled under federal law to over $142 million.

At the 2010 Battle of the Lawyers, Mr. Greene summarized Pfizer’s campaign of suppressing negative clinical trial results and misrepresenting the true results of the trial in the articles that were published.  Mr. Greene also highlighted the hundreds of millions of dollars Pfizer received through its illegal and fraudulent marketing campaign.  Mr. Greene charged “the jury” with a responsibility to tell Pfizer “that we don’t want our doctors to practice marketing-based medicine – we want them to practice evidence-based medicine.”

Mr. Greene was surprised to have won the competition.  “It was a honor just to have been selected to present.  The others were each excellent attorneys who gave very good closings.”

For more information about Neurontin litigation and the Kaiser trial that resulted in the RICO jury verdict, click here to see “Justice After a 14-Year Battle” published by Trial.  For more information about the selective publication of clinical trial reports related to Neurontin, see this article published in the New England Journal of Medicine by Dr. Kay Dickerson, who was an expert for the Plaintiffs at the Kaiser trial.  Click here for information about Judge Patti Saris’s findings that Pfizer engaged in a fraudulent and unlawful marketing campaign and that Neurontin is not effective for several off label uses in her decision on a related claim under the California Unfair Competition Law.