The district court granted the defendant’s motion to dismiss claims alleging violations of the anti-kickback statute and False Claims Act, finding the plaintiff failed to sufficiently plead the alleged kickbacks underpinning his FCA allegations. The relator argued the defendant provided physician assistance services that benefited doctors who prescribed its medication, but the court found that federal guidance allows manufacturers to provide certain patient services that are directly connected to the use of their pharmaceuticals. The court found the relator failed to connect these services to any other good or service of value to the physicians; failed to show that the physicians were induced to prescribe the mediation by these services; or that the physicians benefited financially from these services by cutting staff or other action. The court also found the relator failed to connect the alleged payments to the submission of any claim to the government. Because his underlying arguments failed, the court also held the relator could not demonstrate scienter or conspiracy.
Relator Lazaro Suarez, a registered nurse, alleged that pharmaceutical company AbbVie Inc. and its predecessor, Abbott Laboratories, paid kickbacks to doctors in the form of product support services for AbbVie’s prescription drug Humira. The relator alleged he was employed through a subcontractor to provide these services through AbbVie’s “ambassador program,” and that any resulting claims for government reimbursement of Humira prescriptions constitute false claims under the FCA and 30 other state level false claims statutes. The United States and all local governments declined to intervene. The defendants moved to dismiss.
In his complaint, the relator alleged that his activities through AbbVie’s ambassador program amounted to illegal kickbacks to physicians who prescribed Humira, a treatment for autoimmune diseases. The primary task of ambassadors was to visit patients to discuss their conditions, current status, and treatment with Humira, and to work directly with patients to enable payment for the drug. Suarez alleged that at least one-third of an initial patient visit was spent ensuring the patient had access to reimbursement or free drugs. AbbVie also required ambassadors to contact Medicare directly to determine patients’ coverage and, if needed, to refer patients to AbbVie directly to obtain a free supply. AbbVie also engaged patients during Medicare open enrollment periods to direct them to plans that would maximize reimbursement for Humira. Ambassadors also visited doctors directly to discuss Humira’s benefits.
According to the relator, the goal of the program was not to help patients but to ensure patients began taking Humira and continued taking it. This effort included talking to patients who were not yet taking the drug and staying in contact with patients who had been using the drug for some time. The relator alleged AbbVie provided non-billable patient support by providing training on injecting Humira, discarding used equipment, obtaining insurance reimbursement, and answering administrative questions. The relator alleged these activities normally would be performed by the physician’s staff, and therefore they amounted to an illegal in-kind payment of support services to the physician for prescribing the medication. The relator noted that sales of Humira increased after the program was initiated. Prior to the program, physicians were disinclined to prescribe the drug because it was expensive and required a great deal of non-billable support.
The relator also alleged that the free drugs provided by AbbVie constituted kickbacks. Further, the materials provided to doctors’ offices—including travel kits, pens, preprinted insurance forms, and stations that print verification forms and other insurance-related documents—also constituted kickbacks, according to Suarez. The relator provides examples of specific physicians who benefited from the ambassador program and who dramatically increased their prescriptions after entering it.
Finally, the relator alleged that AbbVie attempted to conceal the true nature of the program, which demonstrated the company was aware of the misconduct. AbbVie warned ambassadors not to formally record all the time they spent with doctors; not to refer to themselves as healthcare providers or their patients as patients; not to refer to Humira when writing up the patient visit, even though the use of Humira was the only reason for the visit; and to call with questions rather than put them in writing. The company also describes the ambassadors as providing educational services, while downplaying their role in giving medical advice, doing clinical work, and building the brand.
AbbVie moved to dismiss all the claims, arguing the relator had not sufficiently pleaded kickbacks or the submission of any false claims, or scienter. The defendant also argued the claims were barred under the public disclosure bar.
First, AbbVie argued that it was expressly allowed to provide certain goods—including free drugs for patients, travel kits, pens, and pre-printed insurance forms—and therefore they could not be considered illegal kickbacks. The relator did not respond to this point and therefore the court considered it conceded.
The defendant also argued that the relator failed to argue with particularity how the patient services it provides amounted to illegal remuneration. Both parties cited to OIG guidance concerning these services, which the court reviewed. While the guidance is not legally binding, the court reasoned that the parties both considered the guidance authoritative. The guidance noted that certain services that have no substantial independent value to the purchaser might not implicate the anti-kickback statute, unless combined with other services of value. The guidance also states that anything of value provided to a physician who might prescribe a product could be considered as a tangible benefit provided with the intent to induce or reward referrals.
The court found no other decisions interpreting this guidance and therefore had only the OIG guidance itself to inform its opinion. The court examined whether the relator had pled that AbbVie offered services integrally related to Humira in tandem with another service or program that conferred a benefit on a referring physician, and whether the relator alleged with particularity that Humira-related goods or services eliminated an expense a physician was likely to incur.
Using this framework the court agreed the relator had alleged the provision of Humira-related services without tying them to other non-related services, such as free meals or travel. While the relator argued the services involved more than Humira, the court noted the pleadings did not specify this. The court also found the relator failed to sufficiently plead that the Humira-related goods or services eliminated an expense that the physicians would otherwise incur. The relator argued that physicians must provide a great deal of non-billable support for the drug, which AbbVie provides instead, but the court found the relator failed to plead factual content to support his contention that physicians would actually provide these services. Further, the OIG guidance cites by both parties states that services offered in connection with a manufacturer’s own products do not implicate the anti-kickback statute.
Even assuming that offering free product support or reimbursement support services could violate the AKS merely because it saves physicians money, the court found the relator failed to plead with the particularity required by Rule 9(b) that AbbVie did so. The relator named doctors that benefitted from the program generally, but did not allege that any reduced their expenses or downsized staff as a result. Because the relator failed to show AbbVie provided illegal remuneration, and his FCA claims are based on alleged AKS violations, the court granted the motion to dismiss these claims.
The court also agreed the plaintiff failed to link the alleged kickbacks to any false claims actually submitted to the government. The court found no dispute to the relator’s failure to identify a specific patient for whom a doctor prescribed Humira in exchange for a kickback, nor identify any request for reimbursement submitted to a government healthcare program.
The court also disagreed with the relator’s assertion that his pleadings created an inference that a false claim was submitted, either “necessarily” or with “reliable indicia.” For example, while the relator identified doctors who used the ambassador program, he failed to allege that any of the named doctors prescribed Humira to Medicare or Medicaid patients, and therefore cannot allege the submission of a false claim to the government. Further, the relator’s anecdotal evidence that AbbVie ambassadors provided patient assistance services did not show that doctors prescribed Humira in exchange for those services. The court found the relator’s allegations did not extend beyond the hypothetical, which was insufficient to satisfy the pleading requirements.
Because the relator’s pleadings failed, the court held he could also not demonstrate scienter. In fact, the court noted the relator failed to respond to the defendant’s argument on this matter, other than to state that his complaint did not allege that AbbVie though its program was permissible. The court found this insufficient, as it is the relator’s burden to show a defendant knew its actions were impermissible. Further, while the relator alleged AbbVie told ambassadors to cover up their activities and obfuscate their roles, the court found that AbbVie’s own website advertises these services openly.
The court declined to consider the defendant’s argument that the relator’s claims were barred by the public disclosure bar, as it had already concluded the complaint as filed was insufficient to proceed. Because the court planned to allow the relator leave to amend his complaint, it reasoned that any amendments would alter its analysis.
