On October 7, 2013, in evaluating a pending cert petition, the U.S. Supreme Court invited the Office of Solicitor General to provide its views regarding the level of specificity required when alleging activities in violation of the civil False Claims Act (FCA) (United States ex rel. Nathan v. Takeda Pharmaceuticals North America, No. 12-1349, order 10/7/13).
On May 10, a pharmaceutical sales manager petitioned the Supreme Court to reinstate his whistleblower lawsuit alleging that Takeda defrauded the government by presenting false claims in connection with its marketing of the drug Kapidex, a proton pump inhibitor. The United States and multiple states’ attorneys general have declined to intervene in the action which generally alleges that Takeda engaged in a marketing/sales program to promote off-label use of Kapidex resulting in the improper presentation of claims for reimbursement to government health care programs. While having been granted three opportunities to allege specific examples of submission of such false claims, the Fourth Circuit in January unanimously affirmed the district court’s dismissal of the Third Amended Complaint for failure to plead fraud with particularity as required by Federal Rule of Civil Procedure 9(b).
Highlighting a split in the circuit courts regarding the level of specificity required for FCA complaints under Rule 9(b), Nathan asserts that the more lenient standards of the First, Fifth, Seventh, and Ninth Circuits should apply as he sufficiently alleged a “scheme” to submit false claims. Takeda argues that Nathan’s failure to identify any actual false claims or to reliably demonstrate that such a false claim was presented (rather than may have been presented) to the government fails under any reasonable interpretation of the Rule 9(b) requirements.
This year, the First, Fifth, and Ninth Circuits have reaffirmed their respective positions regarding 9(b)’s specificity requirements in FCA cases, and we will continue to monitor this case and further developments on this important threshold issue.