Takeda achieves full affirmance of district court judgment dismissing broad False Claims Act suit
Clients Takeda Pharmaceuticals U.S.A., Inc.
Takeda Pharmaceutical Company Limited and Takeda Pharmaceuticals USA, Inc., represented by Jones Day, secured a significant False Claims Act ("FCA") victory involving claims for government reimbursement of pharmaceutical drugs. The U.S. Court of Appeals for the First Circuit affirmed the district court's judgment, which had granted Takeda's motion to dismiss all of Ge's claims under the FCA.
Ge, a former contract medical reviewer for Takeda, alleged that Takeda had violated the FCA by failing to comply with certain U.S. Food and Drug Administration labeling and adverse event reporting requirements for several of its prescription drugs, including Actos® and Uloric®. Based on these alleged violations, Ge claimed the drugs were not as safe as Takeda purported them to be and any claims for government reimbursement for these drugs under government health care programs such as Medicare and Medicaid were "false" under the FCA. She purported to bring claims to on behalf of not only the federal government, but numerous state health care programs as well.
In the district court, Takeda successfully moved to dismiss all of Ge's claims for failure to state a claim and failure to plead fraud with particularity. On appeal, the First Circuit largely adopted the arguments laid out in Takeda's response brief, concluding that the district court correctly held that Ge had failed to plead fraud with particularity based on her failure to allege sufficient facts that Takeda's alleged misconduct resulted in the submission of false claims. Specifically, the court rejected Ge's argument "that if sufficient allegations of misconduct are made, it necessarily follows that false claims and/or material false information were filed." Because Ge only provided "at most, aggregate expenditure data for one of the four subject drugs, with no effort to identify specific entities who submitted claims or government program payers, much less times, amount, and circumstances," her complaints lacked the requisite specificity to survive dismissal. The court also agreed with Takeda that all three liability theories Ge advanced on appeal were waived, having never been properly raised in the district court.
By reiterating the stringent pleading standards for FCA claims and rejecting the relator's attempts to continuously reinvent her liability theories before the district court and on appeal, the First Circuit's decision strengthens an FCA defendant's ability to successfully dismiss FCA claims in the early stages of the litigation.
On October 6, 2014, the United States Supreme Court denied Ge's Petition for Certiorari.
United States ex. rel. Ge v. Takeda Pharmaceutical Co., Ltd., et al., Case Nos. 10-11043, 11-10343 (D. Mass.); Case Nos. 13-1088, -1089 (1st Cir. Dec. 2013); Case No. 13-1236 (U.S.)