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United States of America v. Pfizer, Inc.

United States District Court, D. Massachusetts

May 23, 2016

PFIZER, INC., Defendant.



         I. BACKGROUND

         Relators Alex Booker and Edmund Hebron brought this qui tam action against Pfizer, Inc., on behalf of the federal government, 25 states, and the District of Columbia, alleging violations of the federal False Claims Act (“FCA”) and state analogues, chiefly related to the promotion of the prescription drug Geodon. The relators filed this action on July 13, 2010, and thereafter amended their complaint a number of times. The Fifth Amended Complaint is now the operative pleading. The United States has declined to intervene in this action.

         Relators’ allegations are discussed in detail in my March 26, 2014 Memorandum and Order, U.S. ex rel. Booker v. Pfizer, Inc., 9 F.Supp. 3d 34 (D. Mass. 2014). In this Memorandum, I assume familiarity with those allegations and with the issues raised in this litigation.

         Briefly stated, Booker and Hebron were sales representatives in Pfizer’s Neuroscience Division and promoted a variety of pharmaceutical drugs, including Geodon (zipraisidone). They allege that Pfizer improperly promoted Geodon in a variety of ways. Improper Geodon promotion had been the subject of previous false claims litigation against Pfizer, which had settled and resulted in a 2009 Corporate Integrity Agreement between Pfizer and the federal government. Relators asserted that Pfizer continued to promote Geodon unlawfully even after that Agreement. This action concerns only Pfizer’s conduct after August 31, 2009, when the settlement was reached.

         Among other things, relators allege that Pfizer promoted Geodon for uses not approved by the Food and Drug Administration (“off-label” uses), misrepresented the clinical effects of Geodon to physicians, and paid kickbacks to prescribing physicians through a sham speaker series in order to induce additional Geodon prescriptions. These allegations are said to implicate the False Claims Act because claims for reimbursement arising from them were submitted to federal health care programs. Additionally, relator Booker alleges that he was unlawfully fired in retaliation for his whistle blowing activities.

         In the March 26, 2014 Memorandum and Order, I dismissed many aspects of the action. Specifically, I dismissed allegations of “reverse” false claims involving Pfizer’s failure to comply with its Corporate Integrity Agreement; claims based on Pfizer’s allegedly fraudulent conduct in promoting its drugs, including the misrepresentation of clinical information; claims based on Pfizer’s alleged misbranding of drugs; off-label promotion claims brought under state law; all claims relating to a second drug, Pristiq; and certain off-label promotion claims relating to Geodon. In the March 26, 2014 Memorandum and Order, I also concluded that the Relators had adequately pled their claims concerning the off-label promotion of the drug Geodon for children and adolescents, as a bipolar maintenance monotherapy drug, and at excessive dosages. In addition, I permitted relators’ claims alleging false claims caused by kickbacks to proceed under both the federal False Claims Act and state equivalents. Finally, I denied Pfizer’s motion to dismiss relators’ retaliation claims.

         The parties have conducted discovery and have moved for summary judgment: Pfizer seeks summary judgment on the entirety of the case and relators seek it only on Pfizer’s knowing off-label promotion of Geodon. Relators have failed to comply with the requirements of Local Rule 56.1, which requires a “concise statement” - of the material facts as to which there is no genuine issue to be tried - to be filed along with its motion for summary judgment and a statement of the issues where a genuine issue does exist to be filed along with its opposition to summary judgment. First, they assert that their statement of facts is incorporated into their briefing in support of summary judgment; second, they provide nothing resembling a response to Pfizer’s statement of uncontested facts as contemplated by Local Rule 56.1. Such disregard of the Local Rules could provide grounds sufficient for denial of relators’ motion for summary judgment and is certainly grounds to deem admitted the statements set forth in Pfizer’s statement of uncontested facts. See Zimmerman v. Puccio, 613 F.3d 60, 63 (1st Cir. 2010) (discussing importance of L.R. 56.1 and applying its sanctions).

         For purposes of this Memorandum, where relators’ briefing provides adequate references to the evidentiary record, I have treated that briefing as responsive to the requirements of Local Rule 56.1 in order to assure myself that the shortcomings in Rule 56 practice by relators’ counsel do not obscure the merits of the case; nevertheless, I also proceed by accepting the relevant Pfizer statements of fact as uncontested. See Swallow v. Fetzer Vineyards, 46 Fed.Appx. 636, 638-39 (1st Cir. 2002) (district courts have discretion over sanctions under Rule 56.1 but should still “parse the record” where factual analysis required). Given this posture, I will discuss the evidence topically in this memorandum.


         On a motion for summary judgment, the moving party bears the burden of showing that “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). An issue is genuine if it “may reasonably be resolved in favor of either party.” Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir. 2008). A fact is material if it could sway the outcome of the litigation. Id. In determining whether genuine disputes of material fact exist, all reasonable inferences must be drawn in the non-movant’s favor. Id.

         Once the moving party has carried its burden, the burden shifts to the non-moving party, which must provide specific and supported evidence of disputed material facts. LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir. 1993). The non-moving party “may not rest upon mere allegation or denials” and must “establish a trial-worthy issue.” Id.

         Cross-motions for summary judgment “do not alter the basic Rule 56 standard.” Adria Int'l Grp., Inc. v. Ferre Dev., Inc., 241 F.3d 103, 107 (1st Cir. 2001). Rather, the court must assess each motion for summary judgment independently and “determine whether either of the parties deserves judgment as a matter of law on facts that are not disputed.” Id.


         Off-label promotion can give rise to False Claims Act liability because if government health programs do not cover particular off-label uses, seeking reimbursement for those off-label uses would be a false claim; causing such claims to be submitted is within the proscriptions of the FCA as well. Booker, 9 F.Supp.3d at 51-52. Medicaid, the program at issue here, [1] covers both on-label uses and off-label uses recognized in specific drug compendia identified by statute. Id. Accordingly, relators purport to show that Pfizer promoted Geodon for three non-reimbursable indications - use in children and adolescents, use as a bipolar monotherapy maintenance drug, and use at excessive dosages not approved by the FDA - leading to false claims against Medicaid.

         The “sine qua non” of a False Claims Act violation is, as the name of the statute would suggest, an “actual false claim.” U.S. ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 225 (1st Cir. 2004). Without proof of a false claim, there is no liability under the False Claims Act. There is some flexibility in the specificity with which a false claim must be pled, particularly where a defendant does not itself submit claims directly to the government. U.S. ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 732-33 (1st Cir. 2007). However, a necessary condition for establishing liability is proving the existence of a false claim.

         In this case, relators cannot meet this basic threshold requirement with respect to their off-label promotion claims. First, relators appear to rely primarily on aggregate data to show that false claims must have been submitted to the government as a result of off-label promotion. Such mathematical deductions, even if statistically sound, do not suffice to prevent summary judgment. See U.S. ex rel. Quinn v. Omnicare Inc., 382 F.3d 432, 440 (3d Cir. 2004) (“Without proof of an actual claim, there is no issue of material fact to be decided by a jury. [Relator]'s theory that the claims ‘must have been’ submitted cannot survive a motion for summary judgment.”); United States v. Kitsap Physicians Serv., 314 F.3d 995, 1003 (9th Cir. 2002) (damages may be extrapolated from aggregate information, but “submission of a single false claim” necessary); U.S. ex rel. Crews v. NCS Healthcare of Illinois, Inc., 460 F.3d 853, 856 (7th Cir. 2006) (adopting reasoning of Third and Ninth Circuits).

         Notably, the First Circuit has deemed it a “close call” whether an FCA complaint could survive a motion to dismiss where it did not identify specific claims but had “identified, as to each of the medical providers (the who), the illegal kickbacks (the what), the rough time periods and locations (the where and when), and the filing of the false claims themselves.” U.S. ex rel. Duxbury v. Ortho Biotech Products, L.P., 579 F.3d 13, 30 (1st Cir. 2009). Here - on summary judgment rather than a motion to dismiss - relators have not offered even this level of specificity as to any particular false claim.

         Relators point to case law allowing circumstantial evidence that false claims were submitted, see United States v. Acadiana Cardiology, LLC, 2014 WL 1323388, *3 (W.D. La., March 31, 2014) and U.S. ex rel. El-Amin v. George Washington University, 522 F.Supp.2d 135, 143 (D.D.C. 2007). But those cases are fully consistent with the requirement that an actual false claim be established. They dealt with whether a particular Medicare claim form must be submitted or whether a “mountain of billing records” could instead be used to demonstrate specific false claims. El-Amin, 522 F.Supp.2d at 142. Here, relators have pointed to no such specific false claim, on a claim form, in billing documents, or otherwise. Given this record, no reasonable jury could find that a false claim exists and gives rise to False Claims Act liability.

         Second, relators cite to affidavits from Booker himself and from another Pfizer sales representative, Dave Furmanek, which aver that they know false claims for off-label uses to have been submitted. Booker, for example, declares that “I know that Dr. [Jordan] Balter wrote at least one Geodon prescription for a dosage exceeding the package insert maximum which was paid for by the Missouri Medicaid program in the period between September 1, 2009 and January 5, 2010.” Nearly identical statements, with the doctor and off-label use changed, are repeated through the declaration. Furmanek, for his part, states that “I know that Dr. [Slawomir] Puszkarski wrote at least one Geodon prescription for a child or adolescent patient which was paid for by the Illinois Medicaid program after he became a Geodon speaker at the end of March 2010.”

         This evidence, however, is plainly inadmissible. Under Federal Rule of Civil Procedure 56(c)(4), “[a]n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.” The First Circuit has been clear that declarants must do more than simply claim a fact to be true. The purpose of summary judgment “is not to replace conclusory allegations of the complaint or answer with conclusory allegations of an affidavit.” Santiago v. Canon U.S.A., Inc., 138 F.3d 1, 6 (1st Cir. 1998). Thus, the First Circuit has deemed inadmissible descriptions of an affiant’s meetings with certain company “representatives” where the representatives were not named, the time of the meetings was unstated, and the specific contents of the conversation were undefined. Perez v. Volvo Car Corp., 247 F.3d 303, 316 (1st Cir. 2001). Here, even less information is provided; indeed, Booker and Furmanek do not claim to have developed their information from direct participation in conversations with doctors. They provide no foundation for their claims or information at all about the source of their statements. The affidavits will, as Pfizer moves [Dkt. No. 179], be struck from the record insofar as they purport to show the existence of a false claim. Id. at 315 (affidavit lacking any detail should be struck selectively where inadmissible). Bare assertions that false claims were submitted are no substitute for admissible evidence of false claims, which remain entirely lacking. This alone is enough to require summary judgment on relators’ off-label promotion claims.

         But even if relators could point to any such claims, they face a more fundamental challenge. It has not been demonstrated that any of the states in which Pfizer allegedly promoted Geodon for off-label uses and in which Geodon was so prescribed (precisely what states those are is, again, unstated) bar reimbursement for off-label uses. Many states cover certain off-label, non-compendia uses. Cf. U.S. ex rel. Polansky v. Pfizer, Inc., No. 04-CV-0704 (ERK), 2009 WL 1456582, at *9 (E.D.N.Y. May 22, 2009) (“the Medicaid scheme does not contain a flat prohibition against reimbursement for off-label prescriptions. Instead, it leaves the issue to the discretion of the states”). For example, Pfizer states, and relators do not contest, that the Illinois Medicaid program covered Geodon for children over eight and allows it to be covered with prior authorization for children under eight, while Florida’s Medicaid program covered Geodon for children aged six and over. In such states, a doctor who prescribes Geodon for a pediatric patient is not seeking the improper reimbursement of a non-covered drug but rather reimbursement for a drug that the state has chosen to cover. This is not a fraud on the federal government; it is the ordinary and anticipated operation of a health program, and there is no room for False Claims Act liability. See U.S. ex rel. Banigan v. Organon USA Inc., 883 F.Supp.2d 277, 294 (D. Mass. 2012) (“if a state Medicaid program chooses to reimburse a claim for a drug prescribed for off-label use, then that claim is not ‘false or fraudulent, ’ and liability cannot therefore attach for reimbursement”); U.S. ex rel. Worsfold v. Pfizer Inc., No. CIV.A. 09-11522-NMG, 2013 WL 6195790, at *3-4 (D. Mass. Nov. 22, 2013) (“Whether a claim for payment is ‘false’ for purposes of liability under the FCA, in the off-label promotion context, turns on whether the claim is reimburseable under the relevant federal program, i.e. Medicaid or Medicare.”).

         This basic analysis might be viewed as complicated by a closer examination of the relevant statutory language, but in the end the outcome is the same. Relators argue that the federal Medicaid statute does not grant states the discretion to cover additional off-label, non-compendium uses. This interpretive question is of some relevance because a claim for reimbursement might be false even where states purport to cover a drug if the Medicaid statute does not permit them to do so. See, e.g., U.S. ex rel. Brown v. Celgene Corp., No. CV 10-3165-GHK SSX, 2014 WL 3605896, at *4 (C.D. Cal. July 10, 2014) (“courts are ...

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