In Lawton v. Takeda Pharmaceutical Co. et al., 842 F.3d 125 (1st Cir. 2016), the First Circuit affirmed the lower court’s dismissal of a False Claims Act (“FCA”) suit alleging a drug maker fraudulently marketed a product for off-label uses. The decision focused on the application of Federal Rule of Civil Procedure 9(b) in FCA cases, explaining that a relator is required to plead with particularity both the alleged false or fraudulent statements and their connection to the allegedly induced false claims. Here the relator alleged the defendants violated the FCA by fraudulently marketing a drug for various off-label uses. The Court held that even if the relator met his burden with respect to the specifics of the fraudulent activities, he had failed to plead the resulting false claims with the particularity required under Rule 9(b).
BackgroundThe relator alleged that defendants Takeda Pharmaceutical Co. (a Japanese pharmaceutical company “Takeda”) and Eli Lilly and Co. (a U.S. pharmaceutical company, “Eli Lilly”) violated the FCA by conspiring to engage in fraudulent marketing of the drug Actos. Actos is approved by the FDA to treat Type 2 diabetes in certain types of cases. The relator, Peter Lawson, was a patent litigator at Takeda competitor GlaxoSmithKline plc and claimed he had learned certain inside information through his work in the industry, including job interviews at Takeda.
The relator offered certain details around the alleged campaign to promote Actos for off-label uses. He alleged that since the late 1990s the defendants had developed and promoted “quasi-scientific” support for using Actos off-label, including for treatment of prediabetes. Prediabetes is a condition of abnormally high blood sugar, but not high enough to qualify as type 2 diabetes. According to the relator, the defendants funded research studies advocating the use of Actos as a treatment for prediabetes. The realtor alleged that the defendants provided various inducements to study authors and others for promoting Actos, and funded continuing medical education presentations touting Actos for treating prediabetes. In conjunction with these efforts, the relator further alleged, the defendants also developed a sales force to encourage physicians to prescribe Actos for prediabetes, and directly marketed the drug to the public for the same off-label use. As a result of these efforts, the relator claimed, Takeda and Eli Lilly caused the submission of false claims.
The...
