Government Says Supreme Court Should Not Take Up False Claims Act Case Alleging Off-Label Promotion

By JP Ellison –

On February 25th, the Solicitor General’s Office weighed in on whether the Supreme Court should take up a case involving False Claims Act allegations arising out of alleged off-label promotion of a drug. 

The case is Nathan v. Takeda, and the United States Court of Appeals for the Fourth Circuit ruled that the qui tam relator, Nathan a sales representative, had not pled fraud with particularity.  Nathan filed a cert. petition alleging a split among the circuits.  Specifically, Nathan claimed that the 4th, 6th, 8th, and 11th Circuits (see our post on an 11th Circuit decision here) all require allegations “that specific false claims actually were presented to the government for payment” while the 1st, 5th, 7th, and 9th Circuits  apply a more flexible standard. 

As readers of this blog know, allegations of off-label promotion by company sales representatives have resulted in eye-popping settlements, (see for example, posts here  and here.

Company sales representatives are typically quite familiar with company marketing practices, but usually have little or no knowledge regarding the submission of any actual claims for reimbursement submitted by healthcare providers so the stakes in this debate are significant.

Despite recognizing “inconsistent conclusions” from lower courts regarding “the precise manner” that a qui tam relator must follow to plead fraud with particularity, the SG’s office recommended that the court deny cert. in this case.  The government, which has racked up huge recoveries in health care fraud cases, argues that a “per se” rule—requiring details of particular false claims—is wrong, but nevertheless says that the Court should not take up this case. 

We previously posted about another case in which the SG’s office opined that the lower court decision was wrong, but that the Court should not review the case.  That case is now set for oral argument on Monday April 21st.  We’ll be watching this case closely to see whether the SG’s recommendation in Nathan v. Takeda receives similar treatment.