On March 12, 2024, the Second Circuit affirmed the dismissal of federal False Claims Act claims against pharmaceutical distributor McKesson Corporation and its related subsidiaries (McKesson), which were premised on federal Anti-Kickback Statute (AKS) violations ' but the circuit court also reversed the dismissal of state FCA claims based on state anti-kickback violations. U.S. ex rel. Hart v. McKesson Corp., No. 23-726-CV, 2024 WL 1056936 (2d Cir. Mar. 12, 2024). In 2015, McKesson was sued by its former business development executive, Adam Hart, concerning two McKesson business-management tools that were allegedly offered to oncology practices to increase profit margins for prescription drugs. The United States declined to intervene and the district court ultimately dismissed the case for failure to plead "willful" conduct. Writing for the Second Circuit, Judge Gerald E. Lynch explained that the district court correctly dismissed the federal qui tam claims for failing to plead willfulness under the federal AKS, and applied the general criminal-law definition of "willfully" to require knowledge of illegality generally, even without knowledge of the specific law being violated. However, the Second Circuit also held that the district court erroneously dismissed the relator's analogous state law qui tam claims because the state anti-kickback provisions did not necessarily impose the federal AKS's high scienter bar.
The relator's operative complaint...
