Litigation > False Claims Act/Qui Tam Defense > State FCA Resource Center > New York Federal Court Asks DOJ to Plead FCA Claims with Greater Specificity
25 Jul '13

United States ex rel. Bilotta v. Novartis Pharmaceuticals Corp., No. 11 Civ. 0071 (PGG) (S.D.N.Y.): On July 18, 2013, a federal court in the Southern District of New York asked the Department of Justice to amend its intervenor complaint in a False Claims Act case alleging that Novartis Pharmaceuticals Corporation paid kickbacks to physicians to promote certain drugs at speaking events. The court expressed concern that the intervenor complaint “may not satisfy Rule 9 (b)” because it did not contain enough detail about who took the alleged kickbacks and what claims were false.

A former employee of Novartis Pharmaceuticals brought the case in January 2011, alleging violations of the federal and thirty-one state and local FCAs, including California, New York, Texas and Virginia. The DOJ intervened in April 2013, asserting claims under the federal FCA and the Anti-Kickback Statute (42 U.S.C. § 1320a-7b[b]).  Specifically, the DOJ alleges that:

. . . Novartis systematically paid doctors to speak about certain of its drugs, including its cardiovascular drugs Lotrel and Valturna and its diabetes drug Starlix, at events that were little or nothing more than social occasions for the doctors. The payments to the doctors, and the dinners, were kickbacks to the speakers and the attendees to induce them to write prescriptions for Novartis drugs.     

(Federal Intervenor Complaint ¶ 1.) The DOJ further alleges that “[b]y providing kickbacks to physicians to induce them to prescribe certain of Novartis’s pharmaceutical products, Novartis has caused false claims to be submitted to federal health care programs.”  (Federal Intervenor Complaint ¶ 18.) 

On June 27, 2013, Novartis submitted a pre-motion conference letter (a prerequisite for moving to dismiss) attacking the DOJ’s allegations on several grounds, including that the DOJ failed to meet pleading standards and that the statute of limitations barred the government’s claims. The DOJ responded to Novartis’ arguments in a letter dated July 1, 2013.  After reviewing the parties’ submissions, the court scheduled a pre-motion conference for July 18, 2013.    

At the pre-motion conference, United States District Judge Paul G. Gardephe stated that the DOJ’s allegations may be too vague to satisfy Rule 9 (b) of the Federal Rules of Civil Procedure. The court observed that the intervenor complaint does not identify the doctors who took alleged kickbacks, a single false claim for reimbursement or when any such claim might have been presented for reimbursement. In an order dated July 19, 2013, the court gave the government one month to file an amended complaint.

The court dealt a similar blow to Novartis’ claim that the statute of limitations barred the government’s claims relating to pre-2007 alleged false claims, stating that “[i]t’s not clear to me that there’s merit to defendant’s motion to dismiss on statute of limitation grounds.” The court asked Novartis’ counsel to submit a letter by September 2, 2013, addressing any concerns they might still have about any amended intervenor complaint filed. 

On the same day the court asked the DOJ to file an amended complaint, the state of New York announced its intention to intervene. To date, the District of Columbia and twenty-six states, including California, Texas, and Virginia, have declined to intervene. The remaining state and local governments have not yet announced their plans.

We will be monitoring this case for any amended filing by the DOJ and action by the State of New York, and will report on developments in future postings. We invite you to contact our editors or contributors for further information or consultation.