Major Drug Company Not Immune From FCA Liability For False Claims Submitted by Pharmacists

On Tuesday, in United States ex rel. Nevyas v. Allergan, Inc., an Eastern District of Pennsylvania district court denied pharmaceutical giant Allergan’s motion to dismiss False Claims Act (“FCA”) allegations brought against it by Relator eye doctors in the Philadelphia area. In so doing, the Court rejected Allergan’s novel argument that, since the allegedly false claims were submitted by unknowing third-party pharmacists, Allergan could not be liable under the FCA.

Relators allege that Allergan engaged in an elaborate kickback scheme to increase prescriptions for its eye care products. Allergan would allegedly target large eye care practices and provide eye care providers with a suite of professional and financial advisory services, access to a valuable Internet site, and admittance to its Speakers Bureau – all with the explicit quid pro quo that the providers would reciprocate by writing prescriptions for Allergan’s drugs.

Among its arguments in its Motion to Dismiss, Allergan claimed that under the framework for evaluating FCA claims adopted by the Third Circuit in United States ex rel. Wilkins v. United Health Care Group, Inc., 659 F.3d 295 (3d Cir. 2011), it could not be liable for the false claims its alleged kickbacks generated because those claims were not submitted by the company but rather by pharmacists unaware of the underlying scheme. While the plain language of the FCA encompasses those who knowingly “cause” the submission of false claims, Allergan argued that the statute’s scienter requirement applied to both the individual causing the submission as well as the submitter. In rejecting this argument, the Court pointed to recent cases in several circuits holding that non-submitting entities that cause the submission of false claims can be liable under the FCA.