United States v. Novo Nordisk, Inc.

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UNITED STATES OF AMERICA, et al., ex rel. Plaintiffs, JAMIE SIEGEL M.D., Plaintiff-Relator, v. NOVO NORDISK, INC., Defendant.

No. CIV-15-00114-PRW

United States District Court, W.D. Oklahoma

November 4, 2022

ORDER

PATRICK R. WYRICK, UNITED STATES DISTRICT JUDGE.

Before the Court is Defendant's Motion to Dismiss the Second Consolidated Complaint (Dkt. 124) and Motion to Dismiss the Second Consolidated Complaint in Part Pursuant to Anti-SLAPP Statutes (Dkt. 127). For the reasons explained below, the Motion to Dismiss the Second Consolidated Complaint (Dkt 124) is GRANTED IN PART and DENIED IN PART, and the Motion to Dismiss the Second Consolidated Complaint in Part Pursuant to Anti-SLAPP Statutes (Dkt. 127) is DENIED AS MOOT.

Background^[1]

This case arises from alleged violations of the False Claims Act (“FCA”) by Defendant Novo Nordisk, Inc., a global healthcare company that specializes in diabetes care, hemophilia care, growth hormone therapy, and hormone replacement therapy. The Plaintiff-Relator, Dr. Jamie Siegel worked at Novo Nordisk from 2008 to 2009 as a Director of Hematology in Clinical Development, Medical, and Regulatory Affairs. The questions presented by the motions are whether the Second Consolidated Complaint satisfies Federal Rule of Civil Procedure 9(b)'s heightened pleading standard for fraudbased claims and whether the claims fail as a matter of law.

During her time at Novo Nordisk, part of Dr. Siegel's duties included assisting Novo Nordisk in marketing its drug NovoSeven. NovoSeven is used to treat persons with hemophilia, a rare, life-threatening, genetic bleeding disorder in which blood does not clot normally. Persons with hemophilia bleed longer than others after an injury because they lack proteins in the blood called clotting “factors” required for normal blood clotting. Although in the 1980s pharmaceutical companies developed methods to manufacture factors, approximately 15-20% of persons with hemophilia develop an antibody to their deficient or missing factors. This antibody prevents blood from clotting, so persons with the antibody often need a special product called a “bypassing agent” to stop bleeds. NovoSeven is a bypassing agent approved by the Food and Drug Administration (“FDA”) to treat acute bleeding and prevent excessive bleeding during surgeries. NovoSeven's package insert also directs injections of the drug at a dosage of 90gg/kg every two hours until bleeding stops. Importantly for Plaintiffs' claims, the FDA has not approved NovoSeven for doses higher than 90gg/kg, nor has it approved NovoSeven for routine, prophylactic use for preventing spontaneous bleeds from occurring in the first place. Because they are not approved by the FDA, such uses would be considered “off-label.”

Dr. Siegel brings the Second Consolidated Complaint against Novo Nordisk qui tam on behalf of the United States, twenty-nine states, the District of Columbia, and the City of Chicago, with the State of Washington intervening with respect to Dr. Siegel's claims brought on behalf of Washington. Plaintiffs allege that Novo Nordisk illegally marketed NovoSeven for off-label uses-phrophylaxis and dosing regimens above the FDA-approved amount-and provided illegal kickbacks to physicians and patients. Ultimately, Plaintiffs argue, the alleged off-label marketing and kickbacks resulted in false claims being filed with the government in violation of the FCA and various state laws.

Legal Standard

When reviewing a Rule 12(b)(6) motion to dismiss, all well-pleaded allegations in the complaint must be accepted as true and viewed “in the light most favorable to the plaintiff.”^[2]Parties bear the “obligation to provide the grounds of [their] entitle[ment] to relief,” which requires “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”^[3]The pleaded facts must be sufficient to establish that the claim is plausible.^[4] In considering whether a claim is plausible, the Court “liberally construe[s] the pleadings and make[s] all reasonable inferences in favor of the non-moving party.”^[5]Generally, a complaint will survive a Rule 12(b)(6) motion to dismiss if it “state[s] a claim to relief that is plausible on its face,” meaning that it pleads sufficient facts to support a “reasonable inference that the defendant is liable for the misconduct alleged.”^[6]But fraud-based claims, like those under the False Claims Act, must satisfy Rule 9(b)'s heightened pleading standard.^[7]

Rule 9(b) requires that “a party must state with particularity the circumstances constituting fraud. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.”^[8]The purpose of Rule 9(b) is “to afford defendant[s] fair notice of plaintiff[s'] claims and the factual ground upon which [they] are based.”^[9]FCA claims satisfy Rule 9(b)'s requirements when they “provid[e] factual allegations regarding the who, what, when, where and how of the alleged claims.”^[10]For most FCA claims it is necessary to allege “actual submissions of a specific request for payment to the government,” but it is unnecessary to allege such specific requests for payment when the complaint demonstrates the “specifics of a fraudulent scheme and provide[s] an adequate basis for a reasonable inference that false claims were submitted as part of that scheme.”^[11]

Discussion

In its motion to dismiss, Novo Nordisk argues that Counts One through Thirty-Five in the Second Consolidated Complaint fail to satisfy Rule 9(b)'s pleading requirements and fail to state a claim as a matter of law under Rule 12(b)(6). Specifically, Novo Nordisk maintains (1) that Plaintiffs failed to link the allegations of the underlying schemes-off-label marketing and illegal kickbacks-with any claims presented to United States or state governments and (2) that off-label marketing and kickbacks do not render a claim “false or fraudulent” under the FCA or state law. Novo Nordisk also argues that, even if any of Plaintiffs' claims meet the requirements of Rules 9(b) and 12(b)(6), these claims should be dismissed to the extent they are time-barred or narrowed based on state-law requirements. In the alternative, Novo Nordisk maintains that Plaintiffs' claims violate the First Amendment and numerous states' “Anti-SLAPP” laws. For the reasons explained below, the Court agrees that Counts Three through Thirty and Counts Thirty-Three through Thirty-Five do not satisfy Rule 9(b)'s pleading requirements but disagrees with respect to Counts One, Two, Thirty-One, and Thirty-Two. The Court also finds that Plaintiffs' claims under Counts One, Two, Thirty-One, and Thirty-Two do not fail as a matter of law.

A. Rule 9(b)

Novo Nordisk argues that Counts One through Thirty-Five in the Second Consolidated must be dismissed for failure to satisfy Rule 9(b)'s pleading requirements. For the reasons that follow, the Court concludes that Plaintiffs have satisfied Rule 9(b)'s pleading requirements for Counts One, Two, Thirty-One, and Thirty-Two based on alleged violations of the FCA and Washington law. Plaintiffs have not, however, pleaded with sufficient particularity Counts Three through Thirty and Counts Thirty-Three through Thirty-Five.

1. False Claims Act (Counts One and Two)

“The False Claims Act covers all fraudulent attempts to cause the government to pay out sums of money.”^[12]It does so by permitting recovery of civil penalties and treble damages from, among others,^[13]anyone who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” or “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.”^[14]

The Act has two enforcement mechanisms, one public and one private. “‘First, the Government itself may' sue ‘the alleged false claimant' to remedy the fraud.”^[15]“Second, ‘a private person (the relator) may bring a qui tam' suit on behalf of the government and also for herself alleging that a third party made fraudulent claims for payment to the government.”^[16] “‘As a bounty for identifying and prosecuting fraud,' relators get to keep a portion ‘of any recovery they obtain.'”^[17]The FCA is not, however, “an all-purpose antifraud statute, or a vehicle for punishing garden-variety breaches of contract or regulatory violations.”^[18]“FCA liability does not attach to violations of federal law or regulations, such as marketing of drugs in violation of the [Federal Drug and Cosmetic Act], that are independent of any false claim.”^[19]

There are two varieties of FCA claims: factually false claims and legally false claims.^[20]“Factually false claims generally require a showing that the payee has submitted an incorrect description of goods or services provided or a request for reimbursement for goods or services never provided.”^[21]Legally false claims, on the other hand “generally require knowingly false certification of compliance with a regulation or contractual provision as a condition of payment.”^[22] Furthermore, legally false claims can rest upon one of two theories: express false certification or implied false certification.^[23]A claim is based upon an express-false-certification theory when the complaint alleges that “a government payee falsely certifie[d] compliance with a particular statute, regulation or contractual term, where compliance [was] a prerequisite to payment.”^[24] Conversely, an implied-false-certification claim does not require a false representation; instead, “liability can attach when the defendant submits a claim for payment that makes specific representations about the goods or services provided, but knowingly fails to disclose the defendant's noncompliance with a statutory, regulatory,...