United States Ex Rel. Ge v. Takeda Pharmaceutical Co.

737 F.3d 116, 2013 WL 6399780
CourtCourt of Appeals for the First Circuit
DecidedDecember 6, 2013
Docket13-1088, 13-1089
StatusPublished
Cited by90 cases

This text of 737 F.3d 116 (United States Ex Rel. Ge v. Takeda Pharmaceutical Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Ex Rel. Ge v. Takeda Pharmaceutical Co., 737 F.3d 116, 2013 WL 6399780 (1st Cir. 2013).

Opinion

LYNCH, Chief Judge.

In June 2010 Dr. Helen Ge originally filed these two qui tam actions against her former employer, Takeda *119 Pharmaceutical Company Ltd. and its subsidiary Takeda Pharmaceutical North America, Inc. (collectively, “Takeda”), under the federal False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., and various analogous state statutes. The two actions concern different drugs. She has since amended each of her complaints twice. The United States has declined to enter the case as a party. In a successful qui tam action, the relator collects a portion of the award to the government regardless of whether the government intervenes. See United States ex rel. Duxbury v. Ortho Biotech Prods., L.P. (“Duxbury I”), 579 F.3d 13, 16 (1st Cir.2009).

Dr. Ge has alleged in her second amended complaints that Takeda had failed to disclose adequately the risks associated with four of its drugs and generally that this failure resulted in the submission of false claims by various third-party patients and physicians for government payment through, for example, Medicare or Medicaid reimbursement.

On Takeda’s motions to dismiss, the district court dismissed both of Dr. Ge’s actions under Federal Rule of Civil Procedure 9(b) for failure to plead fraud with particularity and, in addition,, under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. United States ex rel. Ge v. Takeda Pharm. Co. Ltd., Nos. 10-11043-FDS, 11-10343-FDS, 2012 WL 5398564 (D.Mass. Nov. 1, 2012). Dr. Ge proposed to amend the second amended complaint yet again, asserting still more theories of FCA liability. The district court declined to allow further amendment.

Dr. Ge now appeals, making three levels of arguments: (1) as to the Rule 9(b) dismissal, that her complaints contain sufficient allegations concerning “the who, what, where, and when” of Takeda’s misconduct to satisfy Rule 9(b)’s particularity requirement, see Duxbury I, 579 F.3d at 30 (quoting Rodi v. S. New Eng. Sch. of Law, 389 F.3d 5, 15 (1st Cir.2004)) (internal quotation mark omitted), (2) the district court abused its discretion in rejecting without opinion two requests, one prejudgment and one post-judgment, by Dr. Ge to amend her complaints again, and (3) as to Rule 12(b)(6), that the district court’s analysis relies on an overly restrictive conception of FCA liability.

This opinion concerns the first two arguments. We affirm the district court on its Rule 9(b) and denial of amendment rulings, and do not reach the 12(b)(6) issue.

I.

In September 2008, Dr. Ge took a position with Takeda as a contract physician, contracting to perform medical reviews of adverse event reports. Dr. Ge was responsible for reports of adverse events, including those concerning four specific drugs for specific diseases: Actos (type 2 diabetes), Uloric (gout), Kapidex/Dexilant (gastroesophageal reflux disease), and Pre-vacid (same). Takeda sells all four drugs and each required Food and Drug Administration (“FDA”) approval for these uses. Dr. Ge’s tasks included ascertaining the seriousness of a reported event, determining whether the associated drug was causally responsible for that event, and determining whether that event constituted a “safety signal,” that is whether the reported event signaled the need for additional safety warnings. Dr. Ge worked for Take-da until January 20Í0. She asserts that when she complained about improper reporting at Takeda, her contract was summarily terminated.

On June 18, 2010, Dr. Ge filed an FCA complaint under seal against Takeda pertaining to Actos. United States ex rel. Helen Ge v. Takeda Pharmaceutical Co.,

*120 et al, 10-11043-FDS. On March 1, 2011, Dr. Ge filed a second complaint under seal pertaining to Uloric, Kapidex/Dexilant, and Prevacid. United States ex rel. Helen Ge v. Takeda Pharmaceutical Co., et al, 11-10343-FDS. In Dr. Ge’s complaints, she alleged on behalf of the. United States 1 that three FCA sections were violated: (a) 31 U.S.C. § 3729(a)(1)(A), which imposes liability on any , person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval,” (b) § 3729(a)(1)(B), which imposes liability on any person who “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim,” and (c) § 3729(a)(1)(C), which imposes liability on any person who conspires to commit a violation of, among other things, § 3729(a)(1)(A) or § 3729(a)(1)(B).

In late 2011 and early 2012, Dr. Ge filed amended complaints in both cases while both complaints were still under seal. Between late March and early April 2012, Dr. Ge filed a second set of amended complaints after the complaints were unsealed. Dr. Ge’s second amended complaints are the ones directly at issue on appeal.

Dr. Ge alleged Takeda had failed to report promptly and accurately to the FDA a number of post-approval adverse events associated with the four subject drugs. The FDA is responsible for the approval of drugs for commercial marketing. See 21 U.S.C. § 355. The FDA is authorized after approval to continue to evaluate the safety and effectiveness of the drug and, where appropriate, to withdraw approval or require a change in labeling. See id. § 355(k). FDA regulations require prompt, accurate reports of adverse drug events by drug manufacturers. 21 C.F.R. §§ 314.80, 314.81. The receipt of an adverse report does not in and of itself show a causal relationship between a drug and the illness mentioned in a report. N.J. Carpenters Pension & Annuity Funds v. Biogen Idec, Inc., 537 F.3d 35, 53 (1st Cir.2008).

It is undisputed that Takeda did submit adverse event reports and there is no specific allegation that any of the events which are the subject of the complaint were not eventually reported in some form to the FDA. As to the drug Actos, Dr. Ge alleged that she was asked by Takeda to misreport adverse events including incidences of heart failure, renal failure, pancreatic cancer, and, most notably, bladder cancer. Dr. Ge alleged that she complied with those directions on certain occasions after having made known her objections. In addition, Dr. Ge alleged that she had discovered systematic under-reporting by Takeda of the incidence of bladder cancer in adverse event reports. -

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737 F.3d 116, 2013 WL 6399780, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-ge-v-takeda-pharmaceutical-co-ca1-2013.