Humana Inc. v. Biogen, Inc.

126 F.4th 94

• Court: Court of Appeals for the First Circuit
• Decided: January 17, 2025
• Docket: 24-1012
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 24-1012

HUMANA INC.,

Plaintiff, Appellant,

v.

BIOGEN, INC. and ADVANCED CARE SCRIPTS, INC.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. F. Dennis Saylor IV, U.S. District Judge]

Before

Barron, Chief Judge, Lynch and Thompson, Circuit Judges.

Robert E. Dunn, with whom Sarah H. Catalano, Scott C. Solberg, James W. Joseph, Benjamin E. Waldin, Gregory M. Schweizer, and Eimer Stahl LLP were on brief, for appellant. Mark C. Fleming, with whom Mark A. Ford, Felicia H. Ellsworth, and Wilmer Cutler Pickering Hale and Dorr LLP were on brief, for appellee Biogen Inc. Sarah M. Harris, with whom Farrah Bara, Erin M. Sielaff, and Williams & Connolly, LLP were on brief, for appellee Advanced Care Scripts, Inc.

January 17, 2025 LYNCH, Circuit Judge. Humana, a major health insurance

company and Medicare Part C and Part D sponsor, filed suit in the

District of Massachusetts on September 24, 2021 against the drug

manufacturer Biogen and a specialty pharmacy, Advanced Care

Scripts, Inc. ("ACS"), alleging that each defendant engaged in

fraudulent schemes involving three Biogen-manufactured multiple

sclerosis drugs and, inter alia, so violated the civil RICO

statute. See 18 U.S.C. § 1964(c).

Humana alleged that Biogen constructed and implemented

a scheme to "seed" the market of MS patients with these three

drugs, funnel patients for whom the drugs were prescribed and

administered into Medicare, and indirectly fund patient copays for

the drugs through third-party patient-assistance programs

("PAPs"). As to ACS, Humana alleged that the pharmacy company ACS

"aided and abetted" Biogen's scheme in that it "steered patients

and acted as an information intermediary" between Biogen and the

PAPs. Humana alleged that both defendants "caused the submission

of false certifications to Humana" in furtherance of their scheme.

The district court dismissed the case on the pleadings for reasons

discussed below. See Humana v. Biogen, Inc., 666 F. Supp. 3d 135,

141 (D. Mass. 2023). Humana has appealed.

On appeal, Humana focuses on what it calls an "implied

certification" theory: that the defendants caused the submission

of claims for payment to Humana that were not "clean" under Centers

- 2 - for Medicare and Medicaid Services ("CMS") regulations, 42 C.F.R.

§§ 423.505(h)(1), 423.505(i)(3), and 423.505(k). Humana alleges

that the CMS regulations generally require "downstream" entities

that subcontract with Medicare Part D sponsors, like Humana, to

comply with federal laws and regulations and to certify to Humana

that claims data is true, accurate, and complete.1 See 42 C.F.R.

§§ 423.505(h)(1), 423.505(i), 423.505(k).

Humana alleges that through its insurance, it reimbursed

the cost of the drugs prescribed to patients who use these MS

drugs. Humana has also narrowed on appeal its claims of injury,

abandoning its earlier argument that it paid more for these drugs

than it would have paid absent the alleged scheme. Humana now

only argues that its injury is that Humana covered prescriptions

that it would not have covered absent the allegedly false

certifications and that it covered more prescriptions for these

drugs than it otherwise would have.

The district court dismissed the complaint in its

entirety on two alternative grounds. First, the district court

held that Humana lacked standing to bring RICO claims against each

defendant because Congress intended that RICO incorporate the

indirect purchaser rule from Illinois Brick Co. v. Illinois, 431

Humana's cited language from 42 C.F.R. § 423.505(h)(1) 1

describes only the Part D sponsor's, not the downstream entity's, obligation to comply with the law.

- 3 - U.S. 720, 737 (1977), and both defendants were covered by that

rule. The court secondly ruled that Humana's complaint failed to

plead the RICO claims against each defendant with particularity,

as required by Federal Rule of Civil Procedure 9(b).

After dismissal (and about a year after the motion to

dismiss hearing), Humana moved for leave to amend its complaint.

The district court denied the motion. Humana appealed both the

dismissal and the denial of leave to amend.

We need not reach the first ground concerning whether

the indirect purchaser rule applies to RICO claims or whether

Humana is an indirect purchaser. We reach only the second ground

of whether the pleadings meet the particularity rule for fraud

under Rule 9(b). They do not, and we affirm on that ground. We

also affirm the district court's denial of leave to amend.

I.

A.

When reviewing the allowance of a motion to dismiss,

"'we recount the underlying facts as alleged in the complaint,'

but 'disregard any conclusory allegations.'" Analog Techs., Inc.

v. Analog Devices, Inc., 105 F.4th 13, 14 (1st Cir. 2024) (citation

omitted) (first quoting Shash v. Biogen, Inc., 84 F.4th 1, 6 (1st

Cir. 2023); then quoting Ponsa-Rabell v. Santander Sec. LLC, 35

F.4th 26, 30 n.2 (1st Cir. 2022)). We also note Humana's

- 4 - concessions made in its briefs and at oral argument, as

appropriate.

Biogen, Inc. manufactures Avonex, Tysabri, and

Tecfidera, three drugs used to treat multiple sclerosis. ACS, a

specialty pharmacy, filled prescriptions and provided patient drug

management advice for those drugs. Humana, Inc. provided insurance

coverage to patients for whom those drugs were prescribed, in part

through Medicare.

Humana administers plans under Medicare Part C and Part

D. Medicare Parts C and D both provide prescription drug benefits,

and the government -- through CMS -- reimburses Humana for a

portion of the prescription costs of Medicare-enrolled patients.

Under Medicare Part C, Humana receives a capitated rate for each

insured. While Humana does not submit claims directly to the

government under Part C, Humana is subject to certain reporting

requirements. Humana is also a Part D Sponsor, and under Medicare

Part D, premiums are split between insureds and Medicare funds.

Part D insureds are usually responsible to pay a portion of the

cost of their prescription drugs via a copay or deductible.2

2 Prior to 2023, Part D beneficiaries were responsible for 100% of an initial deductible. See Final CY 2025 Part D Redesign Program Instructions Fact Sheet, Ctrs. for Medicare & Medicaid Servs. (Apr. 1, 2024), https://www.cms.gov/newsroom/fact- sheets/final-cy-2025-part-d-redesign-program-instructions-fact- sheet [https://perma.cc/V78H-QCCU]. After satisfying that deductible, beneficiaries were responsible for 25% coinsurance payments until reaching the "catastrophic coverage" threshold, at

- 5 - In practice, it is the pharmacy which provides the

prescribed drug to the insured patient. The drug manufacturer

typically provides the drugs to wholesalers, who provide the drugs

to pharmacies. The insured patient usually pays a copay for the

drug (or the whole price of a drug not covered by insurance).

Citing 42 C.F.R. § 423.322, Humana alleges that the electronic

record of the claim that the pharmacy submits to the insurer is

called a Prescription Drug Event ("PDE"), and that generating and

submitting PDE data is a condition of payment for CMS's provision

of Medicare funds to Part D sponsors.

As described earlier, Humana alleged that CMS

regulations require "downstream" or "related" entities that

subcontract with Medicare Part D Plans -- including drug

manufacturers and pharmacies -- to comply with "[f]ederal laws and

regulations designed to prevent fraud, waste, and abuse,

including, but not limited to, applicable provisions of Federal

criminal law, the False Claims Act (31 U.S.C. § 3729, et seq.) [],

and the anti-kickback statute (§ 1127B(b) of the Act), [42 C.F.R.]

§ 423.505(h)(1)."

Humana alleged Biogen and ACS have engaged in a scheme

to inflate the number of covered prescriptions for Avonex, Tysabri,

which point they generally became responsible for 5% coinsurance payments. Id. The federal government also provides a subsidy to assist certain lower-income Medicare patients. Id.

- 6 - and Tecfidera such that Humana was defrauded and overpaid in

covering the drugs.3 The alleged scheme had two major components.

First, Biogen "seeded" the market by providing its MS drugs for

free to patients who lacked insurance or whose insurance did not

cover Biogen's MS drugs. Humana alleged Biogen then worked to

funnel patients from the free-drug program into Medicare. Biogen's

Patient Services Department or a third party contacted patients in

the free-drug program who were eligible for Medicare and then

obtained their consent to enroll them in Medicare. Once a patient

starts a particular drug therapy, he or she is more likely to

continue that therapy, including those free MS drugs, so Biogen

ultimately profited from the free-drug program through insurance

reimbursements.

Second, Humana alleged that Biogen coordinated with two

non-profit organizations (not named as defendants), The Assistance

3 In 2020, the Department of Justice intervened in a whistleblower suit against Biogen alleging that Biogen's conduct in connection with two of these drugs violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, and the False Claims Act, 31 U.S.C. §§ 3729-3733. See United States Notice of Intervention, United States ex rel. Paul Nee v. Biogen, Inc., No. 17-cv-10192 (D. Mass. Dec. 17, 2020), ECF No. 47. Biogen and the DOJ reached a $22 million settlement, without any admission of liability. See Biogen Agrees to Pay $22 Million to Resolve Alleged False Claims Act Liability for Paying Kickbacks, U.S. Dep't of Justice, Off. of Pub. Affs. (Dec. 17, 2020), https://www.justice.gov/opa/pr/biogen- agrees-pay-22-million-resolve-alleged-false-claims-act- liability-paying-kickbacks [https://perma.cc/SUA6-9Y6R]. ACS also "agreed to pay $1.4 million to resolve its role in the [same] conduct" without an admission of liability. Id.

- 7 - Fund, Inc. ("TAF") and the Chronic Disease Fund, ("CDF"), to enroll

patients using these MS drugs in TAF's and CDF's PAPs, which cover

drug copayments for patients. Biogen allegedly made donations to

CDF and TAF in exchange for the PAPs' commitments to cover specific

patients' copays. After receiving Biogen's donations, the PAPs

approved the patients' applications and covered their copay costs

for the Biogen MS drugs. Biogen allegedly tracked every

prescription and knew which ones were covered by a PAP. Humana

alleged that ACS transferred patients who used these three Biogen

MS drugs from the free-drug program to a PAP, and that it

coordinated Biogen's payments to the PAPs. Humana alleged that

ACS participated in the scheme because ACS derived revenue from

transitioning patients to the PAPs and filling prescriptions of

the MS drugs.

We describe later the precise allegations in the

complaint as to the alleged fraud. In general, Humana alleged

that through the scheme, both defendants "caused the submission of

false certifications to Humana." Humana alleged without detail as

to these certifications that the defendants represented to Humana

that "they were complying with state and federal law, including

laws related to kickbacks and false claims such as the AKS and the

FCA," "as well as rules promulgated by government entities such as

CMS."

- 8 - Humana alleged it paid over $1.9 billion for these Biogen

MS drugs between 2011 and 2019, with the drugs provided by ACS

accounting for nearly $350 million of that spending. Humana

alleged that it would have paid less absent Biogen and ACS's

conduct because Humana would have paid for fewer MS drug

prescriptions (including the costs of administering the drug).

Humana further alleged that it suffered injuries every time Humana

"reimbursed those prescriptions for the MS Drugs that otherwise

would not have been filled, submitted, or reimbursed." At oral

argument, Humana abandoned another theory of relief pled in the

complaint -- that Humana paid an inflated price for the drugs --

and instead argued that Humana had overpaid in the sense that it

would not have covered the prescriptions in which Biogen ultimately

paid the copay.

B.

Humana's suit under 18 U.S.C. § 1964(c) against Biogen

and ACS asserts ten counts based on the alleged Biogen-ACS scheme:

one for violation of the civil RICO statute;4 one for conspiracy

4 To state a civil RICO claim, A plaintiff must allege "a violation of section 1962[c]" and an injury "by reason of" that violation. [18 U.S.C. § 1964(c)]. The underlying section 1962 violation in turn requires demonstrating: "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." Sedima, S.P.R.I. v. Imrex Co., 473 U.S. 479, 496, 105 S. Ct. 3275, 87 L.Ed.2d 346 (1985)(footnote omitted). The statute separately defines "pattern

- 9 - to violate the civil RICO statute; and the remainder under various

state laws. Humana alleged mail and wire fraud under,

respectively, 18 U.S.C. § 1341 and 18 U.S.C. § 1343, as the

predicate offenses for its core RICO claim. Biogen and ACS both

moved to dismiss the complaint, arguing that the claims were time-

barred and that Humana failed to state a claim upon which relief

can be granted under Federal Rule of Civil Procedure 12(b)(6) for

various reasons.

The district court took briefing and held a hearing on

the motions to dismiss on April 7, 2022. Roughly a year later, on

March 31, 2023, the district court dismissed the action. We turn

to the second ground for dismissal and need not reach the first.5

of racketeering activity" to require "at least two acts of racketeering activity." 18 U.S.C. § 1961(5). Lerner v. Colman, 26 F.4th 71, 77 (1st Cir. 2022). A plaintiff may also allege an attendant conspiracy claim under 18 U.S.C. § 1962(d), which provides that "[i]t shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section." "[I]f the pleadings do not state a substantive RICO claim upon which relief may be granted, then the conspiracy claim also fails." Efron v. Embassy Suites (Puerto Rico), Inc., 223 F.3d 12, 21 (1st Cir. 2000). 5 The court determined that Humana was an indirect purchaser, and reasoned that, under Supreme Court caselaw, "[a] plaintiff asserting a claim under the Clayton Act cannot demonstrate an actionable injury if it only made indirect purchases" (citing Illinois Brick Co. v. Illinois, 431 U.S. 720, 737 (1977)). The court further reasoned that after the Supreme Court's decision in Holmes v. Securities Investor Protection Corporation, 503 U.S. 258 (1992), "two circuits, following its reasoning, have concluded that the indirect purchaser rule applies in all civil RICO actions" as well as in the antitrust context. See Trollinger v. Tyson

- 10 - The district court held that Humana failed to meet the pleading

requirements under Rule 9(b) for its RICO claim. The court

initially held that "[c]ivil RICO claims based on predicates of

mail or wire fraud must meet the heightened pleading standard of

Rule 9(b)." The plaintiff must "go beyond a showing of fraud and

state the time, place and content of the alleged mail and wire

communications perpetrating that fraud" (quoting Cordero-Hernandez

v. Hernandez-Ballesteros, 449 F.3d 240, 244 (1st Cir. 2006)). The

court held that the complaint failed to meet the 9(b) requirements

and, more specifically, that the complaint was inadequate in

meeting the particularity requirements on two grounds: failure to

plead specific mail or wire communications and failure to plead

fraudulent misrepresentations.

Humana relied on Exhibit A to the complaint, and the

court rejected Humana's argument that Exhibit A provided the

required specificity as to mail and wire communications. The court

found "the absence of further detail in Exhibit A [] particularly

puzzling, in that the communications in question were apparently

Foods, Inc., 370 F.3d 602, 616 (6th Cir. 2004); McCarthy v. Recordex Serv., Inc., 80 F.3d 842, 855 (3d. Cir. 1996). Having determined that "[t]he First Circuit has yet to decide the issue," the court, "follow[ed] the lead of every circuit to have considered the issue," applied the indirect purchaser rule to Humana, and determined that it lacked standing to pursue a civil RICO claim. We express no view of the district court's analysis as to this issue.

- 11 - made by a Humana subsidiary"6 -- Humana's own specialty pharmacy,

which filled the prescriptions -- "to Humana itself." Exhibit A,

prepared by Humana, is a spreadsheet captioned "Examples of 100

Biogen Subsidized Copayments" with columns for "Rx Fill Date,"

"Copay Foundation," "Drug Cost," and "Copay Subsidy." Exhibit A

did not purport to provide any information as to ACS. For example,

one row representing one prescription has "1/7/2011" listed under

"Rx Fill Date," "The Assistance Fund" listed under "Copay

Foundation," "$6,982.21" listed under "Drug Cost," and "$997.30"

listed under "Copay Subsidy." Humana alleged that Exhibit A

constitutes a sample of claims for MS prescriptions filled through

Humana's specialty pharmacy. As to the mail or wire fraud and

interstate or foreign commerce elements of civil RICO, the district

court concluded that neither the complaint nor Exhibit A itself

"specifically identif[ied] which (if any) of the communications

were made by mail, and which were made by wire." Further, Exhibit

A "contain[ed] no detail as to who sent the communications" and

"d[id] not even allege the technical requirement of the wire-fraud

statute, that the communication be transmitted 'in interstate or

foreign commerce'" (quoting 18 U.S.C. § 1343). Looking beyond

6The complaint alleges that Humana Pharmacy Inc. and Humana Pharmacy Solutions, Inc. are operating subsidiaries that "operate Humana's in-house pharmacy and manage Humana's pharmacy benefits, respectively." Humana alleged that the operating subsidiaries "have assigned the claims asserted here to Plaintiff Humana Inc. through written assignment agreements."

- 12 - Exhibit A to all of the allegations, the court held that "the

complaint does not allege a single specific instance of a mail or

interstate wire communication -- at best, it only alleges that

certain specific communications were sent by 'the wires or by

mail'" (quoting Compl. ¶ 95).

The court also held that, independently, the complaint

had failed to meet the Rule 9(b) requirements as to the "alleged

falsehoods at issue." Those alleged falsehoods, the court noted,

were "not that the prescriptions themselves were phony, or that

the treatment was medically unnecessary; rather, it is the

representation, in one or more 'certifications,' that defendants

were in compliance with the law." The court ruled that "the

complaint does not state when [the certifications] were made and

how they were made, and does not provide the actual language of

the misrepresentations at issue." The court observed that sections

of the complaint "allege that Biogen and Humana entered into a

contract with an effective date of January 1, 2006, that contained

a provision in which Biogen agreed that it 'shall comply' with

applicable federal laws."7 Nonetheless, "[t]he complaint does not

7The complaint alleged that Biogen and Humana entered into a contract for Humana's private insurance business with an effective date of January 1, 2006 in which Biogen agreed that it "shall comply" with applicable federal laws. Defendants dispute that a 2006 contract has any relevance to a suit brought in 2021 and point out that there is no allegation in the complaint that ACS entered into any contract with Humana. We need not reach that issue.

- 13 - include any allegations as to how Humana's contractual

relationship with Biogen for its private commercial insurance

business has any relevance to the alleged scheme at issue here."

Accordingly, the court dismissed due to Humana's failure to plead

its RICO claim with the specificity required by Rule 9(b). The

court declined to exercise supplemental jurisdiction over the

remaining state claims, and it noted that "there is no basis to

permit Humana leave to amend, as may be the case when the critical

information is not in the plaintiff's possession."

On April 28, 2023, Humana moved for reconsideration and

for leave to file an amended complaint. The district court denied

the motion after full briefing, concluding that "[t]here is no

suggestion here that 'amendment would be anything other than

futile'" and that seeking leave to amend after the case has been

dismissed "is inefficient, unfair to defendants, and burdensome to

the court" (first quoting Fire & Police Pension Ass'n of Colo. v.

Abiomed, Inc., 778 F.3d 228, 247 (1st Cir. 2015)).

II.

We review the district court's dismissal order de novo,

Douglas v. Hirshon, 63 F.4th 49, 54-55 (1st Cir. 2023), and we

assume -- without deciding -- that the properly pleaded facts are

true, Lerner v. Colman, 26 F.4th 71, 74 (1st Cir. 2022). "We do

not credit legal labels or conclusory statements, but rather focus

- 14 - on the complaint's non-conclusory, non-speculative factual

allegations and ask whether they plausibly narrate a claim for

relief." Cheng v. Neumann, 51 F.4th 438, 443 (1st Cir. 2022).

To state a civil RICO claim, a plaintiff must allege

"(1) conduct, (2) of an enterprise, (3) through a pattern, (4) of

racketeering activity." Kenda Corp. v. Pot O'Gold Money Leagues,

Inc., 329 F.3d 216, 233 (1st Cir. 2003) (quoting Sedima, S.P.R.I.

v. Imrex Co., 473 U.S. 479, 495 (1985)); see also Lerner, 26 F.4th

at 77. "By statute, the 'pattern' element requires a plaintiff to

show at least two predicate acts of 'racketeering activity,' which

is defined to include violations of specified federal

laws . . . ." Kenda, 329 F.3d at 233 (quoting Efron v. Embassy

Suites (P.R.) Inc., 223 F.3d 12, 15 (1st Cir. 2000)). The

predicate acts for Humana's RICO claim are mail and wire fraud.8

"'RICO claims premised on mail or wire fraud must be particularly

scrutinized' because of the ubiquity of the use of wires and mails"

and the "ease" of pleading a pattern of fraud. Lerner, 26 F.4th

at 85 (quoting Efron, 223 F.3d at 20). To state a claim for mail

or wire fraud, Humana must plead: (1) "a scheme to defraud using

false pretenses," (2) "the defendant's knowing and willing

8 Humana does not challenge the district court's holding that the RICO conspiracy claim fails if the substantive RICO claim fails or the court's refusal to exercise supplemental jurisdiction over the remaining claims. Accordingly, we focus our analysis on the underlying RICO claim.

- 15 - participation in the scheme with the intent to defraud," and (3)

"the use of the mails [or wires] in furtherance of that scheme."

United States v. Simon, 12 F.4th 1, 33 (1st Cir. 2021). Humana

appeals the district court's determination that it failed to plead

the first and third elements with particularity.

The district court correctly determined that Rule 9(b)'s

pleading standard applies. Where, as here,

a RICO complaint pleads mail and wire fraud as predicate acts, it adopts the heightened pleading requirement of Federal Rule of Civil Procedure 9(b), New England Data Servs., Inc. v. Becher, 829 F.2d 286, 290 (1st Cir. 1987), such that the plaintiff must "state with particularity the circumstances constituting fraud." Fed. R. Civ. P. 9(b).

Lerner, 26 F.4th at 84; see also Ahmed v. Rosenblatt, 118 F.3d

886, 889 (1st Cir. 1997) ("RICO pleadings of mail and wire fraud

must satisfy the particularity requirements of Rule 9(b)," under

which "a pleader must state the time, place and content of the

alleged mail and wire communications perpetrating that fraud.").

We reject Humana's argument that an alternate, more plaintiff-

friendly standard applies. Humana argues that the complaint need

only "'contain[] enough factual detail to make it apparent that

the plaintiff's claims' are not 'groundless' and to enable the

defendant 'to file a responsive pleading.'" That is not the

- 16 - standard.9 Humana cites Dumont v. Reily Foods Co., 934 F.3d 35,

39 (1st Cir. 2019) and Foisie v. Worcester Polytechnic Inst., 967

F.3d 27, 51 (1st Cir. 2020) for the proposition that this court

should apply a standard akin to a notice standard. But both Dumont

and Foisie required particularity as to the "who," "what," "where,"

and "when" giving rise to the fraud. See Dumont, 934 F.3d at 39;

Foisie, 967 F.3d at 50. Therefore, neither case supports Humana's

contention that a lower standard applies.10

a. Fraudulent misrepresentations

Our RICO cases have made clear that it is insufficient

to simply make conclusory allegations of fraud and to fail to

describe the time, place, and content of the communications. See

Feinstein v. Resol. Tr. Corp., 942 F.2d 34, 42 (1st Cir. 1991)

("It is not enough for a plaintiff to file a RICO claim, chant the

statutory mantra, and leave the identification of predicate acts

to the time of trial."). We hold that Humana failed to plead with

the particularity required under Rule 9(b) what were the contents

9 We also reject the argument that standard has been met here "[s]ince . . . Biogen and ACS reached multimillion dollar settlements with DOJ based on the same underlying conduct, [so] Biogen and ACS cannot plausibly be confused or underinformed about the wrongdoing underlying Humana's claims" without accepting the premise that would be adequate notice. 10 Moreover, fraudulent conveyances -- which is what Foisie involved -- are an area where Rule 9(b)'s application is "a matter of some uncertainty." Foisie, 967 F.3d at 49-50.

- 17 - of those "certifications," who made them to whom, where and when

they were made, and even why they were fraudulent.

The RICO count relevantly alleges only that "[f]alse

representations of compliance with federal and state laws were

made to Humana for payment over the wires or by mail." The

remaining paragraphs of the complaint allege that:

1. Defendants "caused the submission of false certifications to Humana."

2. "Defendants misrepresented to Humana that they were complying with state and federal law, including laws related to kickbacks and false claims such as the AKS and the FCA."

3. "Biogen and its agent ACS made such certifications and therefore directly misrepresented to Humana that they were not inducing Medicare patients to take Biogen's drugs by subsidizing copayments, and that Biogen and ACS were otherwise complying with federal law."

4. "Humana's agreements with its providers include a provision that requires the provider to certify its compliance with state and federal law, as well as rules promulgated by government entities such as CMS."

5. "This underlying misconduct results in a further form of misconduct specifically directed to Humana: namely, specific misrepresentations that those participating in the deceptive scheme were complying with the very laws that they were in fact flouting."

6. "Biogen . . . certif[ied] to Humana that it was following federal law and CMS rules that prohibited such copayment subsidies for Medicare patients."

- 18 - 7. "False representations of compliance with federal and state laws were made to Humana for payment over the wires or by mail. These false representations were made directly to Humana and were a condition of reimbursement for all the MS Drugs claims submitted to Humana."

Humana also attached to its complaint Exhibit A, which

purports to set out a list of 100 examples of claims submitted to

Humana by Humana's own specialty pharmacy for MS drug prescriptions

that it alleges were illegally subsidized by Biogen. The exhibit

does not, however, provide any additional information about any

certifications allegedly made in connection with those claims.

As the district court correctly concluded, none of these

allegations plead with specificity "when the [alleged false

certifications] occurred, where they took place, or what they

contained." Feinstein, 942 F.2d at 42. Humana contends that

additional detail is unnecessary because it identified in Exhibit

A multiple specific claims submitted to it and because "the

Complaint makes plain that Biogen submitted false certifications

in connection with every claim." But even setting aside whether

this fairly characterizes Humana's complaint, it is not enough to

make conclusory assertions that fraudulent certifications were

made, without identifying the fraudulent statement itself. And

Humana's complaint does not identify what exactly was said -- or

"certifi[ed]" -- to it in connection with each claim that was, in

fact, false.

- 19 - To the extent that Humana means to rely for the content

of the alleged certifications on either its "agreements with its

providers," or on federal regulations "requir[ing] 'downstream'

entities . . . to certify that [claims] data is true, accurate,

and complete," the complaint neither sets forth the content of any

such agreements, nor alleges any specific instance in which either

defendant expressly certified to it the certification set forth by

regulation. Indeed, on appeal, Humana appears to disclaim any

argument that the submitted claims were accompanied by an express

certification by either defendant.

Likewise, Humana's contention that key information was

in the defendants' hands, and therefore could not be pled with

particularity, misses the mark. Even if Humana would not have

been reasonably able to identify "exactly which claims were

fraudulent," apart from claims submitted through its own specialty

pharmacy, this does not explain Humana's failure to identify the

content of the certification that it alleges was, in many

instances, false.

We turn to Humana's "implied certification" theory,

noting that it is not clear that such an argument was developed in

front of the district court. We bypass this potential waiver by

Humana because its argument fails in any event. To address this

question, we turn to the Supreme Court's rulings in Universal

Health Services, Inc. v. United States ex rel. Escobar, 579 U.S.

- 20 - 176 (2016). In Escobar, the plaintiffs' daughter received

treatment at a mental health center and was prescribed medication

by someone that the center had represented was a doctor. Id. at

183. The daughter died following an adverse reaction to the

medication, and the plaintiffs discovered that of the five

practitioners who had treated their daughter, only one was properly

licensed. Id. One practitioner had been identified as a

psychologist with a Ph.D., but that was false: her degree came

from an unaccredited internet college, and the state had rejected

her application to become licensed as a psychologist. Id. The

practitioner who had prescribed medication, represented to be a

psychiatrist, was a nurse who lacked authority to prescribe

medication absent supervision. Id. The healthcare center

submitted reimbursement claims to CMS using payment codes

corresponding to services such as "Individual Therapy." Id. at

184. In its CMS claims, the center had used National Provider

Identification numbers corresponding to and representing the

provider had specific job titles in connection with those

reimbursement claims, even though the providers lacked the

credentials and licensing required for those titles. Id.

The Escobar plaintiffs filed a qui tam suit in federal

court, alleging the center had violated the False Claims Act under

an implied false certification theory of liability in that it

"submitted reimbursement claims that made representations about

- 21 - the specific services provided by specific types of professionals,

but that failed to disclose serious violations of regulations

pertaining to staff qualifications and licensing requirements for

these services." Id. at 184-85. Reviewing the action at the

motion to dismiss stage, the Supreme Court concluded that the

plaintiffs had adequately pled actionable misrepresentations under

the False Claims Act, holding that "the implied certification

theory can be a basis for liability, at least where two conditions

are satisfied: first, the claim does not merely request payment,

but also makes specific representations about the goods or services

provided; and second, the defendant's failure to disclose

noncompliance with material statutory, regulatory, or contractual

requirements makes those representations misleading half-truths."

Id. at 190.

Escobar does not support Humana's implied certification

theory, as pled. Humana alleged the following:

1. "Any 'downstream' or 'related' entities that subcontract with Medicare Part D Plans (including pharmacies dispensing medication and manufacturers selling medication) are required to comply with '[f]ederal laws and regulations designed to prevent fraud, waste, and abuse, including, but not limited to, applicable provisions of Federal criminal law, the False Claims Act (31 U.S.C. § 3729, et seq.) [the 'FCA'], and the anti-kickback statute (§ 1127B(b) of the Act),' id. § 423.505(h)(1), and all other federal laws, regulations, and CMS instructions, as well as any additional contractual obligations

- 22 - assumed by the Part D Plan. Id. § 423.505(i)(3)."

2. "CMS regulations require 'downstream' entities that generate and submit PDE claims data to certify that such data is true, accurate, and complete and that the PDE data is the basis for obtaining federal reimbursement for the healthcare products or services reflected therein. [42 C.F.R.] § 423.505(k). Congress has determined that any Medicare claim 'that includes items or services resulting from a violation of [the Anti-Kickback Statute] constitutes a false or fraudulent claim for purposes of [the False Claims Act].' 42 U.S.C. § 1320a-7b(g)."

3. "Humana's agreements with its providers include a provision that requires the provider to certify its compliance with state and federal law, as well as rules promulgated by government entities such as CMS."

The pleadings do not suffice. First, unlike in Escobar, Humana

has not pled any specific claim for payment made to the plaintiff

by either defendant. As to ACS, at most, Humana pled that ACS

submitted some undefined set of claims to Humana, but that lacks

any of the particulars required.

Humana argues that it could not have pled specific claims

for payment from ACS because it does not know how copays were paid

for non-Humana pharmacies and therefore could not know which claims

were fraudulent. But Escobar did not address whether a mere

request for payment could give rise to an implied certification.

579 U.S. at 188 ("We need not resolve whether all claims for

payment implicitly represent that the billing party is legally

- 23 - entitled to payment . . . [because] [t]he claims in this case do

more than merely demand payment."). It merely approved an implied

certification claim where the request for payment was accompanied

by an affirmative, specific representation that amounted to a

"misleading half-truth[]" about the good or services being

provided. See id. at 190. And Humana has not developed any

argument as to why the claims submitted to it in this case

necessarily constitute misleading half-truths.

b. Use of the mail or wires

We agree with the district court that Humana failed to

plead with particularity the separate elements of mail or wire

fraud. The complaint alleged only the following with respect to

defendants' use of the mail or wires:

1. Throughout the relevant period, Biogen, ACS, CDF, and TAF used thousands of mail and interstate wire communications to create and manage their scheme, which involved nationwide distribution of the MS Drugs through ACS at the direction of Biogen. Biogen communicated with ACS, US Bioservices, and the foundations through the mail and wires, causing thousands of reimbursement requests to be submitted to Humana over the wires or by mail, and used the wires and mail to effectuate their receipt of payments and contributions. For example, from 2011 through 2019, ACS submitted requests to Humana for reimbursement of more than 76,000 prescriptions worth nearly $350 million for the MS Drugs using the wires or the mail.

2. False representations of compliance with federal and state laws were made to Humana for payment over the wires or by mail. These false representations were made directly to Humana

- 24 - and were a condition of reimbursement for all the MS Drugs claims submitted to Humana. The illegally obtained payments were sought through, and sent over, the wires or by mail. The claims for reimbursement submitted for payment to Humana over the wires or by mail identified in Exhibit A attached to this Complaint are examples of the MS Drugs Enterprise's fraud on Humana.

3. Defendants and their co-conspirators have sought to and have engaged in the commission of overt acts, including the following unlawful racketeering predicate acts:

a. Multiple instances of mail fraud in violation of 18 U.S.C. §§ 1341 and 1346; and

b. Multiple instances of wire fraud in violation of 18 U.S.C. §§ 1343 and 1346.

We have repeatedly held that "conclusory allegations of mail and

wire fraud . . . with no description of any time, place or content

of the communication[s]" do not suffice. Becher, 829 F.2d at 292;

accord Fleet Credit Corp. v. Sion, 893 F.2d 441, 445 (1st Cir.

1990); Feinstein, 942 F.2d at 42.

Exhibit A likewise fails to provide the necessary

particularity. It does not provide the time, place and content of

the alleged mail and wire communications perpetrating the fraud or

the channel of transmission for the communications as required

under 9(b), stating only that the communications detailed in

Exhibit A were "submitted for payment to Humana over the wires or

by mail." See Ahmed, 118 F.3d at 889. This disjunctive

generalized allegation does not plead specific instances of mail

- 25 - or wire fraud -- which are discrete offenses -- and therefore does

not satisfy Rule 9(b)'s particularity requirement.

Humana attempts to excuse the failure, arguing that "the

information the court believed was missing from the Complaint was

exclusively in Defendants' possession" and the district court

should have "given [Humana] the opportunity to investigate and

supplement is allegations." Not so. This is not a situation where

"the specific information as to use [of the mail or wires] is

likely in the exclusive control of the defendant." Becher, 829

F.2d at 290. While Humana may not have "know[n] which members had

their copays reimbursed by [the relevant PAPs]" for claims

submitted by external pharmacies, it should have known the details

of the communications with its own pharmacy. 11

This leaves Humana's appeal from the denial of leave to

amend the complaint. We review this denial for abuse of discretion

and find none. See Palmer v. Champion Mortg., 465 F.3d 24, 30

(1st Cir. 2006). Under this deferential standard, a district

11Humana also relies on a Central District of California case in which the court held that Humana adequately pled its claims. See Humana Inc. v. Mallinckrodt ARD LLC, No. 19-CV-06926, 2020 WL 3041309, at *10 (C.D. Cal. Mar. 9, 2020). This case, arising in a district court in another circuit, is neither authoritative nor relevant to our issue. The Mallinckrodt defendants merely "assert[ed] in conclusory fashion" that the allegations lacked sufficient particularity under Rule 9(b), and accordingly, the court offered no analysis supporting its conclusion.

- 26 - court's decision will be affirmed "so long as the record evinces

an adequate reason for the denial," such as "undue delay, bad

faith, futility, [or] the absence of due diligence on the movant's

part." Id. at 30 (quoting Aponte-Torres v. Univ. of P.R., 445

F.3d 50, 58 (1st Cir. 2006)). Undue delay justifies denying leave

to amend "even standing alone." Kader v. Sarepta Therapeutics,

Inc., 887 F.3d 48, 61 (1st Cir. 2018) (quoting Zullo v. Lombardo

(In re Lombardo), 755 F.3d 1, 3 (1st Cir. 2014)). This court has

stated that the "practice of seeking leave to amend after the case

has been dismissed" is "discourage[d]." Abiomed, 778 F.3d at 247;

see also Kader, 887 F.3d at 61 ("[W]e have explicitly condemned a

'wait and see' approach to pleading, whereby plaintiffs 'having

the needed information, deliberately wait in the wings . . . with

another amendment to a complaint should the court hold the first

amended complaint was insufficient.'" (quoting ACA Fin. Guar.

Corp. v. Advest, Inc., 512 F.3d 46, 57 (1st Cir. 2008))).

Here, Humana waited nearly two years after filing the

action before seeking leave to amend, despite the defendants'

motions to dismiss in the interim. Humana also waited until after

the court's dismissal before moving to amend. Humana attempts to

justify its delay primarily by arguing that it could not have moved

to amend earlier because its proposed amendments relied on

"critical discovery [it obtained] in [separate RICO proceedings

against ACS and Teva Pharmaceuticals] about the mechanics and

- 27 - nature of Defendants' fraudulent scheme." This is not so for at

least two reasons. As defendants point out, many of the proposed

amended pleadings were not reliant on this discovery but were

available much earlier, and as to the pleadings said to be reliant

on this new discovery, defendants had them at least five months

before they moved to amend. This plainly was not timely. Further,

as we have pointed out, Humana had within its possession much of

the information from its own files.12 The district court did not

abuse its discretion in denying Humana leave to amend and correctly

stated that Humana's timing was "inefficient, unfair to

defendants, and burdensome to the court."13

III.

For the foregoing reasons, we affirm the district

court's dismissal of the complaint and denial of leave to amend.

12Humana further argues that the district court should have granted leave to replead even if the complaint failed to plead interstate commerce, citing a decision of the United States District Court for the District of Massachusetts. See In re Lupron Mktg. & Sales Pracs. Litig., 295 F. Supp. 2d 148, 171 (D. Mass. 2003). Without endorsing that analysis, we note that the complaint there, unlike the complaint here, was "reasonably specific as to the nature of the materials that are alleged to have been distributed in furtherance of the scheme." Id. at 170. Here, Humana's deficiencies run deeper than just not "identify[ing] specific instances of mailings," and the district court was within its discretion in not granting leave to amend. Id. 13 We have no need to further address the district court's futility point. See Kader, 887 F.3d at 61.

- 28 -