Author Archives: Matthew S. Trokenheim

Seventh Circuit Bars RICO Claims by Third-Party Payors Against Drug Companies Based on Off-Label Promotion

On October 12, 2017, in Sidney Hillman Health Center of Rochester v. Abbott Laboratories, —F.3d —-, 2017 WL 4544834 (7th Cir. 2017), the Seventh Circuit affirmed the dismissal of a civil RICO class action by third-party payors against drug manufacturer Abbott Laboratories. The decision appears to completely foreclose payors’ suits against drug companies for off-label promotion under the Racketeer Influenced and Corrupt Organizations Act (RICO) and potentially signals a bar against tort claims of any kind by payors against drug companies for off-label…

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The FTC has its Eyes on Biotech for Antitrust Enforcement

On July 27, 2017, representatives of the Food and Drug Administration (FDA) and Federal Trade Commission (FTC) gave coordinated testimony to Congress that ought to raise alarm bells for pharmaceutical companies. Scott Gottlieb, Commissioner of the FDA, and Markus Meier, Acting Director of the Bureau of Competition at the FTC, both testified before the House Judiciary Committee’s Subcommittee on Regulatory Reform Commercial and Antitrust Law. Their statements announced a renewed coordination between the respective agencies with a goal to increase competition in the pharmaceuticals market…

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Federal Court Denies Qui Tam Action Against Medical Device Manufacturer Rejecting Novel Theory that Free Product Support Services Create Liability Under Anti-Kickback Statute

Medical device manufacturers operate in a competitive market. To differentiate themselves from their competitors, manufacturers may offer above-and-beyond customer service. A recent federal qui tam action alleged that too much customer service constitutes an illegal kickback under the federal Anti-Kickback Statute. The court rejected the claim, and its reasoning supplies some comfort and some questions for medical device companies going forward. The federal Anti-Kickback Statute, 42 USC sec. 1320a-7b (AKS), makes it unlawful to knowingly and willfully solicit any remuneration (e.g. bribe, kickback, rebate, etc.)…

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Third Circuit Adopts Heightened Materiality Standard under False Claims Act

On May 1, 2017, the Third Circuit issued a decision in United States ex rel. Petratos v. Genentech Inc., 855 F.3d 481 (3d Cir. 2017) narrowing the ability of qui tam relators to show materiality under the False Claims Act (FCA). In essence, the court held that to be material, a misrepresentation or omission by a drug company must relate to the United States’ decision to pay a claim, not a doctor’s decision to prescribe a drug that would lead to a reimbursement claim…

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