United States ex rel. Solis v. Millennium Pharm., Inc.

445 F.Supp.3d 786

UNITED STATES of America, EX REL. Frank SOLIS, Plaintiff,

v.MILLENNIUM PHARMACEUTICALS, INC., Schering-Plough Corp., and Merck & Co., Defendants.

No. 2:09-cv-03010-MCE-EFB

United States District Court, E.D. California.

Signed March 31, 2020

Filed April 1, 2020

C. Brooks Cutter, John R. Parker, Jr., Cutter Law, P.C., Catherine J. Swann, Govt, United States Attorney's Office, Sacramento, CA, Jay D. Majors, U.S. Department of Justice, Washington, DC, for Plaintiff.

Sean Ashley Commons, Sidley Austin, LLP, Los Angeles, CA, James Marvin Perez, California Institute of Technology, Pasadena, CA, McGregor Scott, Orrick, Herrington & Sutcliffe LLP, Sacramento, CA, Paul Kalb, PHV, Pro Hac Vice, Sidley Austin LLP, Jonathan R. Ference-Burke, Ropes & Gray LLP, Washington, DC, John P. Bueker, PHV, Ropes & Gray LLP, Boston, MA, for Defendants.

MEMORANDUM AND ORDER

MORRISON C. ENGLAND, JR., UNITED STATES DISTRICT JUDGE

This lawsuit was originally filed under seal on November 4, 2009, pursuant to the qui tam provisions of the Federal False Claims Act, 31 U.S.C. §§ 3729, et seq. ("FCA") The Defendants, who are pharmaceutical companies, include Millennium Pharmaceuticals, Inc., Schering-Plough Corp., and Merck & Co. ("Defendants" unless otherwise indicated). The so-called "Relator" plaintiff, Frank Solis, ("Relator" or "Plaintiff") a former sales employee who at various points worked for all three Defendants, claims that the companies fraudulently marketed and/or promoted the use of two drugs, Integrilin and Avelox. Relator alleges that Defendants promoted so-called "off label" uses for Integrilin not approved by the Food and Drug Administration ("FDA"). In so doing, according to Relator, Defendants "caused" physicians to improperly prescribe the drugs and to submit false claims to Medicare, Medicaid and TRICARE (United States Military Healthcare) for federal reimbursement which the government allegedly paid without knowing the claims were ineligible for reimbursement. In addition, Relator alleges that Defendants paid illegal kickbacks to entice physicians to prescribe the drugs. Following a three-year investigation, the United States and all twenty-four states named in the initial complaint chose not to intervene, and Relator's Complaint was subsequently unsealed on December 20, 2012.

Presently before the Court are Motions brought by Defendants Schering-Plough Corp. and Merck & Co., Inc, (collectively "Schering") and Defendant Millennium Pharmaceuticals, Inc. ("Millennium"). ECF Nos. 195, 199. Both Motions are brought pursuant to Federal Rule of Civil Procedure 12(b)(1)¹ and allege this Court lacks subject-matter jurisdiction over Relator's allegations, as set forth in his operative Third Amended Complaint ("TAC"). Defendants contend that Relator's Integrilin-related allegations as to both off-label promotion and kickbacks are barred by the FCA's public disclosure bar (which divests federal courts of jurisdiction where the alleged fraud has already been publicly disclosed) since Relator cannot qualify as an "original source" as to those allegations. 31 U.S.C. § 3730(e)(4). In addition, by way of a separate Motion to Dismiss, Defendant Schering argues that Relator's allegations as to the improper promotion of Avelox also fail to state a viable claim under Rule 12(b)(6) or to allege fraud with the requisite particularity under Rule 9(b).

As set forth below, Defendants' Motions under Rule 12 (b(1) are GRANTED because Relator has not shown he is an original source as to the allegations at issue. Because the Court consequently concludes that it has no jurisdiction over Relator's claims, Defendants' concurrently filed additional motions challenging the TAC are DENIED² as moot except for Defendant Schering's Motion to Dismiss under Rule 9(b), which is GRANTED since Relator's allegations with respect to the fraudulent promotion of Avelox remain insufficient.³

FACTUAL BACKGROUND

Integrilin helps reduce blood clots and thereby helps to prevent heart attacks and death in patients suffering from acute coronary syndrome ("ACS"). ACS is an umbrella term that covers a variety of diseases related to clotting in the coronary arteries that supply blood to the heart muscle, including unstable angina, mild heart attacks known as non-ST-segment elevation myocardial infarctions, and more severe heart attacks called ST-segment elevation myocardial infarctions ("STEMI"). Avelox, on the other hand, is an antibiotic approved by the FDA for treating adult patients with infections caused by a few susceptible strains of microorganisms.

With respect to Integrilin, FDA approval was first obtained in May 1998 by a company named COR Therapeutics, Inc. ("COR"), which thereafter promoted the drug along with Defendant Schering-Plough. In February of 2002, Defendant Millennium acquired COR and thereby obtained the right to co-promote Integrilin.

In September of 2005, Defendant Millennium transferred its right to market Integrilin within the United States to Defendant Schering-Plough, thereby relinquishing any responsibility for the drug after a period of less than four years. Schering-Plough later merged with Merck in November of 2009 to form a new company, also known as Merck.

Relator Solis was a pharmaceutical sales representative for Millennium covering the Los Angeles area between July 2003 and September of 2005. At that time he transitioned to employment for Schering-Plough. Then, in November of 2009, after the Schering/Merck merger, he became a Merck sales representative. Relator was terminated by Merck on March 9, 2010.

Relator's operative TAC alleges that Defendants promoted improper uses of Integrilin, including its early use for STEMI patients, despite the fact that such early use is "extremely dangerous, off-label and fraudulent." TAC, ¶¶ 5, 11. Relator further claims that Defendants violated the so-called Anti-Kickback Statute ("AKS"), which prohibits a drug company from knowingly and willfully offering or paying remuneration to purchase goods or services for which payment may be made by a federal healthcare program. See 42 U.S.C. § 1320a-7(b)(2)(B). Relator alleges that Defendants violated the AKS by "funnel[ing] millions of dollars" in grants, honoraria, and meals to physicians in order to induce Integrilin prescriptions and to drive "off label" sales, all in violation of the AKS. See TAC, ¶¶ 7-8.⁴

While most of the TAC focuses on allegations pertaining to the use and promotion of Integrilin, Relator also includes more limited averments concerning Avelox, which Schering marketed and Relator claims he also promoted. Id. at ¶ 32. Those allegations are based solely on alleged kickbacks; no off-label claims pertaining to Avelox are asserted.

PROCEDURAL HISTORY

As indicated above, Relator's initial lawsuit was filed on November 4, 2009. After a three-year investigation, the United States and the twenty-four states named in the initial complaint chose not to intervene, and Relator's complaint was unsealed on December 20, 2012.

In response to earlier Motions to Dismiss filed on behalf of each of the Defendants, Relator filed a First Amended Complaint ("FAC") on June 27, 2013. The viability of Plaintiff's FAC was attacked through three separate motions. Defendant Schering filed a Motion to Dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) on grounds that Relator's complaint was barred by the FCA's so-called "public disclosure" limitation. Defendant Millennium subsequently joined in that motion. Additionally, two other motions, one filed jointly by Schering and Merck and the other by Millennium, argued that the various causes of action pled in the FAC were substantively deficient in contravention of Rule 12(b)(6). By Memorandum and Order filed March 26, 2014 (ECF No. 105), this Court granted Defendants' Rule 12(b)(1) motion agreeing that the public disclosure bar applied to Relator's "combination use" allegations. Because Relator's FAC contained other allegations beyond combination use, however, including assertions pertaining to a completely different drug, Avelox, as well as allegations of fraud, improper billing, and impermissible kickbacks, the Court permitted Relator to file a Second Amended Complaint ("SAC") omitting the combination use allegations.⁵

Relator's SAC was also met by motions to dismiss. The Court again granted Millennium's motion to dismiss for lack of subject matter jurisdiction and denied as moot Millenium's concurrently filed dismissal request under Rules 12(b)(6) and 9(b). See March 26, 2015 Mem. and Order, (ECF No. 157) at 15. It held that both the kickback and off-label claims brought under federal law were substantially similar to allegations first raised in civil actions filed in 2007. Id. at 11-15. The Court further found that Relator was not an "original source" so as to escape the FCA's public disclosure bar as to those allegations because he "presented no evidence that he ‘had a hand’ in the prior 2007 litigation." Id. at 15. Finally, the Court dismissed Relator's state law claims through application of the same analysis and because the Court declined to exercise supplemental jurisdiction over the state law claims in any event." Id. at 16. Although the Court denied Schering's initial motion under Rules 12(b)(6) and 9(b) challenging the SAC (Mar. 30, 2015 Mem. and Order, ECF No. 158), it ultimately dismissed Relator's claim against Schering following a subsequently filed Rule 12(b)(6) motion, ruling that the prior public disclosures were "equally applicable" to both Schering and Millennium, and that consequently Schering's dismissal was proper for the same reasons set forth in the Court's earlier March 26, 2015 Memorandum. Sept. 1, 2015 Mem. and Order, ECF No. 164.

Relators appealed from the Rule 12(b)(1) dismissal of his claims, and Defendants cross-appealed the Court's denial of their substantive motions to dismiss. On March 15, 2018, the Ninth Circuit affirmed in part and...