U.S. Attorney Urges Broad View of Anti-Kickback Law in Allergan Case

U.S. Attorney Urges Broad View of Anti-Kickback Law in Allergan Case Tomasz Papuga

The Anti-Kickback Statute should be broadly interpreted as a bar to any kind of payment in exchange for health care services paid for by the government, the U.S. Attorney’s Office in Philadelphia argued in a qui tam suit brought against a pharmaceutical company called Allergan.

Among its arguments that the suit—brought under the Anti-Kickback Statute and the False Claims Act—should be dismissed, Allergan said the programs and services it had offered to physicians were speech that would be protected by the First Amendment.

Referring to the second amended complaint, filed in 2010, Allergan said in support of its motion to dismiss, “On its face, the SAC alleges that by providing physicians various forms of advice, consultation, and guidance relating to their eye care practices, Allergan violated the AKS and, as a result, the FCA. But ‘the creation and dissemination of information’—like the advice and educational information regarding health care, business, and financial matters at issue here—comprise speech protected by the First Amendment.”

Since 2002, when Allergan introduced its drug to treat dry eye, Restasis, the company began giving free business advisory services to ophthalmologists and optometrists through a division called the “eye care business group,” according to the complaint. That division employed 12 to 15 “eye care business advisers” who were assigned to various geographic areas across the country.

“Allergan’s eye care business adviser group … offered and provided to relators valuable business advisory and consulting services free of charge. In exchange for these free business advisory and consulting services, Allergan explicitly requested that relators prescribe Allergan products,” according to the complaint, which went on to describe what Allergan employees pitched to the relators as, essentially, a business strategy to create a chronic dry eye practice.

The relators—Dr. Herbert Nevyas and Dr. Anita Nevyas-Wallace—are each Pennsylvania ophthalmologists.

“Allergan’s encouragement and support for physicians to build a successful ‘dry eye’ practice also directly and substantially benefits Allergan because … Allergan’s product Restasis is the first and currently the only prescription therapy approved in the United States for the treatment of chronic dry eye,” the complaint alleges.

Among the services offered by Allergan to the doctors was: marketing strategy and implementation, financial and productivity analysis, practice valuation and governance, human resources, practice efficiency, Web development and strategic planning, according to the complaint.

“Allergan contends that the business services it provided are commercial speech and that relators’ AKS theory violates its First Amendment rights because the determination of whether those services have value and constitute remuneration may only be assessed by analyzing the content of its speech,” the U.S. Attorney’s Office argued in a response to the motion to dismiss.

The U.S. government has declined to intervene in the case, but it has a “keen interest” in the interpretation of the AKS and the FCA and objected to Allergan’s attempt to get the court to read the AKS narrowly.

“Allergan invites the court to construe the AKS to exclude activities comprising speech from its reach,” government lawyers argued. “No other court has so narrowly construed the AKS in the nearly 40 years since the enactment of the statute, and this court should refuse to do so now,” it said.

U.S. District Judge Thomas N. O’Neill Jr. of the Eastern District of Pennsylvania is presiding in the case.

The company had cast the speech issue this way: “If not for Allergan’s status as a pharmaceutical company and if not for the information’s value to eye care professionals, it could permissibly provide the advice and educational information regarding eye care practice management at issue here.

“If the advice provided by Allergan was bad—and thus had no value—it would not be remuneration under the AKS. If it happened to be good advice, and helped an eye care practice run more effectively, according to relators’ theory, it would violate the AKS and the FCA.”

Lawyers from the U.S. Attorney’s Office responded that that argument “obfuscates” the issue.

“The fact that a person may provide remuneration comprised, in whole or in part, of speech does not immunize that person from liability under the AKS,” they said.

“Nothing in the AKS prevents Allergan from offering services, good or bad, as long as it does not offer those services at least in part to induce referrals,” it said.

Marc S. Raspanti of Pietragallo Gordon Alfano Bosick & Raspanti, who represented the relators, couldn’t be reached.

Bonnie Jacobs, a spokeswoman for Allergan, said the company declined comment.

Saranac Hale Spencer can be contacted at 215-557-2449 or sspencer@alm.com. Follow her on Twitter @SSpencerTLI.

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