It’s been a banner year for the False Claims Act. GlaxoSmithKline and Abbott Laboratories have forked over billions to settle whistleblower lawsuits accusing them of misbranding prescription drugs and offering kickbacks to doctors, and Johnson & Johnson is reportedly close to a settlement of its own, after losing a $1.2 billion verdict in an FCA case in Arkansas.
But not every case can be a winner. In a 17-page decision issued Thursday, a federal judge in Minneapolis dismissed with prejudice a qui tam suit accusing Bayer of unlawfully promoting its cholesterol drug Baycol, which the company removed from the market in 2001. U.S. District Judge Michael Davis ruled that the whistleblower, former Bayer senior marketing analyst Laurie Simpson, failed to plead with particularity that Bayer’s allegedly illegal marketing practices caused it to submit false reimbursement claims to Medicare, Medicaid, and other state-sponsored health insurance programs.
Lawyers at Boies, Schiller & Flexner filed the suit for Simpson in 2006. They claimed that Bayer hid the dangers of the Baycol, which was linked to the skeletal muscle disease rhabdomyolysis and resulted in a $1.08 billion class action settlement in 2004. Simpson’s case was unsealed in 2008, after the Department of Justice declined to intervene. Judge Davis, who oversees the once-massive Baycol MDL, dismissed the case without prejudice in 2010, finding that the complaint failed to offer enough details about the alleged fraudulent claims. He also noted that “realtor has failed to distinguish the allegations in this action from the myriad allegations previously disclosed in prior litigation or in news articles.”
Boies Schiller, joined by co-counsel at Diamond McCarthy, beefed up Simpson’s complaint and refiled. But they didn’t fare any better on round two. “A claim under the FCA focuses on the claims, not the underlying fraudulent activity,” Davis wrote. “Because there are no allegations in the SAC that a claim submitted to the government for payment for Baycol, was–in and of itself– fraudulent or false, Relator has failed to sufficiently plead a claim under the FCA.”
“We’re pleased with the decision,” said Bartlit Beck partner Adam Hoeflich. “Judge Davis got it exactly right.”
Boies Schiller partner Edward Normand represented Simpson, along with Robert Sadowski and Raphael Katz of Diamond McCarthy. A Boies Schiller spokesperson didn’t immediately respond to a request for comment.