United States ex rel. Booker v. Pfizer, Inc.

9 F.Supp.3d 34

UNITED STATES of America; et al. ex rel. Alex BOOKER and Edmund Hebron, Plaintiffs

v.PFIZER, INC., Defendant.

Civil Action No. 10–11166–DPW.

United States District Court, D. Massachusetts.

Signed March 26, 2014.

Sonya A. Rao, United States Attorney's Office, Boston, MA, Kevin J. Darken, Cohen, Foster & Romine P.A., Tampa, FL, Thomas N. Burnham, Burnham International Law Office, PC, Ann Arbor, MI, for Plaintiffs.

Brien T. O'Connor, Kirsten V. Mayer, Emily J. Derr, Ropes & Gray, Boston, MA, for Defendant.

MEMORANDUM AND ORDER

DOUGLAS P. WOODLOCK, District Judge.

I. BACKGROUND

Relators Alex Booker and Edmund Hebron bring this qui tam action against Pfizer, Inc., on behalf of the United States, 25 individual states, and the District of Columbia. They allege violations of the federal False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., as well as violations of the False Claims Acts of the District of Columbia and all of the captioned states except Georgia. Pfizer has moved to dismiss.

A. Overview of the Allegations

Booker worked as a sales representative for Pfizer from June 1991 until he was terminated in January 2010. Fifth Am. Compl. ¶¶ 9–10. At the times relevant to this action, he was part of Pfizer's Neuroscience Division, based in St. Louis, Missouri, in Pfizer's South Region. Id. ¶ 10. Booker promoted a variety of pharmaceutical drugs, including Geodon (zipraisidone) and Pristiq (devsvenlafaxine), to hospitals and physchiatrists. Id. ¶ 10.

Hebron worked as a sales representative for Pfizer from January 1997 until he was terminated in June 2006. Id. ¶¶ 13, 19. At the times relevant to this action, Hebron also worked in the Neuroscience Division in St. Louis and promoted Geodon to hospitals and psychiatrists. Id. ¶ 18.

The bulk of the Relators' allegations involve Pfizer's allegedly fraudulent promotion of Geodon and Pristiq for uses not approved by the Food and Drug Administration (“off-label” uses) and not included in certain federally-recognized drug compendia (“non-compendium” uses). Relators allege that as part of the fraudulent scheme, Pfizer made misrepresentations about the side effects of its drugs to physicians, e.g., Fifth Am. Compl. ¶ 71, deliberately mischaracterized clinical studies to physicians, e.g., id. ¶¶ 132–36, concealed negative information about its drugs from both its sales force and physicians, e.g., id. ¶ 68, and paid kickbacks to induce physicians to prescribe Geodon and Pristiq, id. ¶ 114.

Relators allege that Pfizer promoted Geodon for the following unapproved uses: improvement of cognition, Fifth Am. Compl. ¶ 57; reduction of agitation and aggression, id. ¶ 58; improvement of functionality, id. ¶ 59; long-term treatment for bipolar disorder, id. ¶ 60; treatment of bipolar depression, id. ¶ 61 facilitating weight loss for mentally ill patients, id. lowering cholesterol and lipids in the mentally ill, id. ¶ 63; aid in sleeping, id. ¶ 64; treatment of children and adolescents, id. ¶ 66; and use at an excessive dose, id. ¶ 70. Relators allege that Pfizer promoted Pristiq for the following unapproved uses: pain management, Fifth Am. Compl. ¶ 73; prescribing a 100mg dose, id. ¶ 85; and treatment of vasomotor symptoms associated with menopause, id. ¶ 108.

These uses, Relators argue, are not reimbursable under various federal health care programs, including Medicaid, CHAMPUS/TRICARE, CHAMPVA, the Federal Employees Health Benefit Program, and Part D of the Medicare program. Fifth Am. Compl. ¶¶ 23–34. Claims for reimbursement of prescriptions for those uses, they assert, are thereby false.

Relators also allege that Pfizer made false claims by avoiding its obligations under a 2009 Corporate Integrity Agreement with the government, which was the product of an August 2009 settlement resolving false claims liability stemming from a scheme of off-label Geodon promotion similar to that alleged here. Fifth Am. Compl. ¶¶ 116–127.

Count I thus seeks to hold Pfizer liable under the federal FCA based on its fraudulent conduct which caused or was material to false claims made to federal health care programs, and based on its avoidance of obligations to pay the government under the terms of its Corporate Integrity Agreement.

Counts II through XXVI, respectively seek to hold Pfizer liable under the FCAs of the 25 named states and the District of Columbia (collectively, the “state FCAs”) based on its fraudulent conduct which caused or was material to false claims made to each respective state Medicaid program.

Finally, in Count XXVII, Relator Booker alleges that his termination in January 2010 constituted illegal retaliation for his efforts to investigate and stop Pfizer's FCA violations. See Fifth Am. Compl. ¶¶ 128–44, 274–76.

B. Procedural History

Relators filed this action on July 13, 2010. The complaint was kept under seal while the United States considered whether to intervene, see 31 U.S.C. § 3730(b)(2). In the meantime, Relators filed several amendments to their complaint. When the government declined to intervene on June 21, 2012, the case was unsealed, and Relators' Fourth Amended Complaint was made public on August 15, 2012. Relators filed the operative Fifth Amended Complaint now before me on October 4, 2012. Pfizer filed a motion to dismiss, arguing that the Fifth Amended Complaint fails to state a claim and, where applicable, fails to plead fraud with the particularity required by Fed.R.Civ.P. 9(b). Relators opposed the motion, but also preemptively moved for leave to amend their complaint as necessary to correct any pleading deficiencies identified by my resolution of the motion to dismiss.¹

II. STANDARD OF REVIEW

In order to survive a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citation and internal quotation marks omitted). Dismissal for failure to state a claim is appropriate when the pleadings fail to set forth “factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.” Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir.1997) (quoting Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir.1988) ) (internal quotation marks omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’ ” Maldonado v. Fontanes, 568 F.3d 263, 269 (1st Cir.2009) (quoting Iqbal, 129 S.Ct. at 1949 ).

I “must accept all well-pleaded facts alleged in the Complaint as true and draw all reasonable inferences in favor of the plaintiff.” Watterson v. Page, 987 F.2d 1, 3 (1st Cir.1993). While I am “generally limited to considering facts and documents that are part of or incorporated into the complaint,” I “may also consider documents incorporated by reference in the [complaint], matters of public record, and other matters susceptible to judicial notice.” Giragosian v. Ryan, 547 F.3d 59, 65 (1st Cir.2008) (citation and internal quotation marks omitted) (alteration in original).

III. THRESHOLD ISSUES

As a threshold matter, Pfizer argues that Relators' Geodon-related claims are precluded by the “first-to-file” and “public disclosure” provisions of the FCA. I address each argument in turn.

A. First–to–File Bar re Geodon Claims

The False Claims Act provides that “[w]hen a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.”² 31 U.S.C. § 3730(b)(5). This so-called “first-to-file” rule bars “a later allegation if it states all the essential facts of a previously-filed claim or the same elements of a fraud described in an earlier suit.” U.S. ex rel. Duxbury v. Ortho Biotech Products, L.P., 579 F.3d 13, 32 (1st Cir.2009) (emphasis in original; internal quotation and modification omitted). Pfizer argues that two complaints in prior actions covered largely the same ground as does Relators' Fifth Amended Complaint regarding allegations of off-label promotion of Geodon. See United States ex rel. Kruszewski v. Pfizer, Inc., No. 07–4106–JCJ, First Amended Complaint (E.D. Pa. filed Aug. 21, 2009); United States ex rel. Westlock v. Pfizer, Inc., No. 08–11318–DPW, First Amended Complaint (D.Mass. filed Aug. 21, 2008).

Relators avoid wading into a comparison of the allegations, which are indeed quite similar, and instead contend that § 3730(b)(5) by its terms bars related actions only when the prior action remains “pending.” The instant action was filed in July 2010, well after bothKruszewski and Westlock were dismissed on December 22, 2009, Kruszewski, No. 07–4106–JCJ, Order (E.D.Pa. Dec. 22, 2009); Westlock, No. 08–11318–DPW, Order (D.Mass. Dec. 22, 2009), pursuant to an August 2009 settlement agreement between Pfizer and the government. Accordingly, relators argue, Kruszewski and Westlock were not “pending actions” that could preclude the filing of this related action.

Court almost uniformly agree that “once a case is no longer pending the first-to-file bar does not stop a relator from filing a related case.” U.S. ex rel. Carter v. Halliburton Co., 710 F.3d 171, 183 (4th Cir.2013) ; accord U.S. ex rel. Chovanec v. Apria Healthcare Grp. Inc., 606 F.3d 361, 365 (7th Cir.2010) ; In re Natural Gas Royalties Qui Tam Litig. (CO2 Appeals), 566 F.3d 956, 964 (10th Cir.2009) ; cf. also U.S. ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1188 (9th Cir.2001) (first-to-file bar requires “pending action” at the time a related action is filed; irrelevant whether then-pending action is subsequently dismissed). Pfizer cites to one case from the Northern District of Georgia in which the court interpreted “pending” as merely a proxy for “first-filed,” largely due to concerns that “relato...