United States ex rel. Vierczhalek v. Medimmune, Inc.

345 F. Supp. 3d 456
CourtDistrict Court, S.D. Illinois
DecidedSeptember 28, 2018
DocketNo. 09 Civ. 3919 (RJS)
StatusPublished
Cited by4 cases

This text of 345 F. Supp. 3d 456 (United States ex rel. Vierczhalek v. Medimmune, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois 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. Vierczhalek v. Medimmune, Inc., 345 F. Supp. 3d 456 (S.D. Ill. 2018).

Opinion

RICHARD J. SULLIVAN, United States District Judge

Susan Vierczhalek, a medical doctor, brings this qui tam action against Defendant MedImmune, Inc. ("MedImmune"), the manufacturer of a drug called Synagis, which is prescribed to prevent lung infections in premature infants. Vierczhalek alleges that MedImmune violated federal and state law in its effort to increase sales of the drug. Now before the Court is MedImmune's motion to dismiss Vierczhalek's amended complaint (the "Amended Complaint"). (Doc. No. 126.) For the reasons discussed below, that motion is GRANTED.

I. BACKGROUND 1

Vierczhalek is a licensed pediatrician and attending physician at Bellevue Hospital Center in Manhattan. (Amended Compl. ¶ 44.) She is also the Medical Director of the Bellevue Newborn Nursery and the Bellevue Breastfeeding Program and co-director of Bellevue's premature infant follow-up clinic (the "PINK Clinic"). (Id. ¶ 45.) The PINK Clinic provides care *459to medically fragile infants, including those born extremely prematurely, after they are discharged from Bellevue's neonatal intensive care unit ("NICU"). (Id. ¶ 45.)

MedImmune, an American drug manufacturer and wholly-owned subsidiary of AstraZeneca PLC, manufactures Synagis (palivizumab ), which is used to reduce the severity of lung infections caused by respiratory syncytial virus ("RSV") in at-risk children. (Id. ¶¶ 1, 120.) Synagis - which costs approximately $5,000 per treatment - received FDA approval in 1998; by 2006, Synagis represented over 87% of MedImmune's total sales. (Id. ¶¶ 4, 121.)

Trinity Homecare LLC ("Trinity") operates a home health care service throughout New York, New Jersey, and Florida. (Amended Compl. ¶ 52.) Part of Trinity's services include dispensing home delivered drugs, such as Synagis. (Id. ) OptionCare, a wholly owned subsidiary of Walgreen Company, Inc., operates treatment sites, respiratory therapy locations, and "home infusion" locations, all of which are authorized to dispense Synagis. (Id. at ¶ 56.)

On April 17, 2009, Vierczhalek filed a qui tam complaint (the "Original Complaint") seeking to recover damages and civil penalties on behalf of the United States and 19 states (the "States")2 for violating the federal False Claims Act ("FCA"), 31 U.S.C. § 3729(a), and the States' FCA equivalents. (Original Compl. ¶¶ 18-23.) Specifically, Vierczhalek brought claims against MedImmune, Trinity, and OptionCare, alleging that each violated the FCA by promoting the "off-label" use of Synagis - i.e., "the use of [the] drug for any purpose, or in any manner, other than what is approved by FDA as described in the drug's labeling." (Amended Compl. ¶ 89.) Vierczhalek claimed that these off-label promotions "illegally influenced physicians to prescribe ...Synagis when they otherwise would not have prescribed Synagis." (Original Compl. ¶ 4.) Thus, according to Vierczhalek, the "claims ... submitted [by Trinity and OptionCare] were false because Synagis was not medically indicated and necessary." (Id. ¶ 81.) Vierczhalek also alleged that Trinity "falsified" prescriptions for Synagis - in some cases, using Vierczhalek's name and medical license number without her authorization. (Id. ¶¶ 65, 81.)

Like many whistleblower statutes, the federal False Claims Act permits the United States to intervene in qui tam actions such as this one. See 31 U.S.C. § 3730(b)(2). Accordingly, Vierczhalek's case was stayed for a number of years as the United States and the States weighed whether or not to intervene. On July 30, 2013, the United States notified the Court that it was declining to intervene in the action. (Doc. No. 39 at 2.) The State of New York ("New York"), however, continued to investigate the claims made in Vierczhalek's complaint until June 19, 2015, when it filed a notice of election to intervene as to Trinity and OptionCare. See N.Y. State Fin. Law § 190(2)(b). Concurrently with that notice, New York filed a proposed stipulation and order of dismissal, whereby Trinity and OptionCare settled for $22.4 million dollars. (Doc. No. 34 at 8.) All claims against Trinity and OptionCare were thereafter dismissed, and Vierczhalek received $4,040,808.84 as part of the settlement as the original whistleblower. (Id. at 9; N.Y. Fin. Law § 190(6)(a).) New York, nevertheless, continued its investigation of MedImmune.

*460Nearly two years later, on March 31, 2017, New York filed a complaint-in-intervention against MedImmune, seeking to recover treble damages and civil penalties under the New York State False Claims Act ("NYFCA") and other New York state law. (Doc. No. 49 ("Complaint-in-Intervention").) New York's theory of liability differs from the theory of liability set forth Vierczhalek's Original Complaint. Instead of focusing on the off-label promotion of Synagis, New York alleges that MedImmune engaged in a kickback scheme with Trinity. (Complaint-in-Intervention ¶ 3.) According to the Complaint-in-Intervention, MedImmune gained access to protected health information ("PHI") of infants in hospitals who would be candidates for Synagis. (Id. ¶ 8.) MedImmune then allegedly passed this information along to Trinity, which used this information as patient leads for Synagis. (Id. ¶ 94.)

On November 8, 2017, Vierczhalek filed the Amended Complaint on behalf of the United States and the States (other than New York). (Doc. No. 102.) Eschewing her former off-label claims, Vierczhalek now argues that by engaging in a kickback scheme with Trinity, MedImmune violated the federal False Claims Act and the States' analogs. (Amended Compl. at 101-31.) Specifically, Vierczhalek - closely tracking the Complaint-in-Intervention - now alleges that MedImmune engaged in a specialized effort to increase the sales of Synagis by coordinating with hospitals, pediatricians, and specialty pharmacies (such as Trinity and OptionCare). (Id. ¶ 124.) In order to curry favor with doctors, nurses, and other hospital staff, MedImmune provided "services" to various hospitals. (Id. ¶ 7.) These services included "(i) helping the staff track discharged babies that were likely candidates for Synagis ; (ii) reviewing and completing required paper work ... needed to prescribe Synagis ; (iii) providing lunches to physicians and their staff ... (iv) providing binders and forms ... and (v) paying neonatologists ... for speaking about RSV and Synagis." (Id. ¶ 124.)

According to Vierczhalek, these services were provided with one particular goal in mind: securing PHI of babies in the NICU. (Id. ¶¶ 6, 7.) By cultivating relationships with NICU nurses, discharges nurses, neonatologists, and other hospital staff, MedImmune gained access to NICU logbooks.

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345 F. Supp. 3d 456, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-vierczhalek-v-medimmune-inc-ilsd-2018.