On December 27, 2024, the United States Court of Appeals for the Second Circuit decided United States ex rel. Camburn v. Novartis Pharmaceuticals Corporation and joined a growing list of federal circuit courts that have adopted what the Second Circuit called the “at least one purpose rule”. This rule provides that defendants have violated the Anti-Kickback Statute (“AKS”), 42 U.S.C. §1320a-7b so long as at least one purpose of the alleged remuneration at issue (as opposed to the sole or main purpose) was to induce patient referrals, even if there were other, legitimate reasons for the payment.
By way of background, the AKS prohibits the knowing and willful offer or payment of any remuneration to induce or reward patient referrals or the generation of business involving an item or service reimbursable by Federal health care programs. This includes prescriptions for drugs. Remuneration includes anything of value, such that it may constitute hotel stays, meals, or excessive compensation. The False Claims Act (“FCA”) prohibits an individual from knowingly submitting a claim for payment to Federal health care programs that is false or fraudulent. A claim tainted by an AKS violation is a fraudulent claim under the FCA and AKS violations are frequently prosecuted under the FCA.
Relator-Appellant, Steven Camburn (“Camburn”), alleged that Appellee, Novartis Pharmaceuticals Corporation (“Novartis”), violated the FCA by providing improper remuneration to physicians to incentivize their prescribing of Gilenya, a drug to treat multiple sclerosis, in violation of the AKS. Gilenya requires a burdensome six-hour observation for the first dose to the patient as Gilenya can result in a slowed heart rate, dizziness, tiredness, and an irregular heartbeat. To “widen Gilenya’s appeal to the market”, Novartis funded a peer-to-peer speaker program, which Camburn alleged were shams that provided little educational value, such that they were part of...
