After several years of legal sparring, a federal judge has dismissed the whistleblower lawsuit that Peter Rost filed against Pfizer. For those who do not recall, Rost is the controversial former Pfizer exec who allegated that Genotropin, a human growth hormone, was marketed for unapproved uses, such as combating aging in adults and treating short stature in children. The drug was initially marketed by Pharmacia, which is where Rost worked before the company was bought by Pfizer.
The US Justice Department failed to join his lawsuit, but Rost last year succeeded in winning the right to proceed on a narrower basis by attempting to cite numerous instances in Indiana and Kentucky in which Genotropin marketing may have violated the federal False Claims Act. Specifically, he argued Pfizer engaged in off-label promotion and provided doctors with kickbacks, which caused pharmacies to submit false claims to state Medicaid agencies. Last December, the DOJ filed an amicus brief supporting his right to proceed, while criticizing Pfizer’s interpretation of the Medicaid Act and the False Claims Act, although the DOJ did not take a position on the merits of his case (see this).
In an order issued this week, however, US District Court Judge Patti Saris granted Pfizer's request to dismiss the case after determining that Rost failed to prove the drugmaker promoted Genotropin on an off-label basis or that Pfizer engaged in kickbacks by paying for doctors to travel to a conference or paying Indiana University and the University of Louisville for allowing their academic researchers to participate in a clinical trial. In particular, Saris criticized Rost's case because he changed part of his argument afer discovery was complete. As an example, she points to his contention that off-label marketing occurred because a doctor conducted only one test - instead of two tests - before diagnosing a patient with growth hormone deficiency.
For now, the ruling appears to hand a victory to drugmakers. Unless Rost successfully appeals, her ruling could apply to previous False Claims Act cases that are based on the Anti-Kickback Statute. That's because Saris decided that if a pharmacy does not know a prescription was only written because a drugmaker gave a kickback to a doc, then no illegal false claim has been made. In doing so, she disagreed with the DOJ, which argued that "as long as the submission of false claims was the foreseeable result of...illegal kickbacks, (the company) has caused the submission of false claims and is liable under the False Claims Act."
The DOJ had also argued that "payment of a kickback renders subsequent claims factually false under the FCA, without regard to who submits the claim or whether there is a certification that no such kickback was accepted." There were differering interpretations by various courts, and so Congress clarified ambiguity in the law earlier this year with the passage of the Patient Protection and Affordable Care Act, but did not do so retroactively (read more here).
We should note that, three years ago, Pfizer pleaded guilty and paid a $35 million fine in connection with off-label Genotropin marketing (see background here). Patrick Burns of Taxpayers Against Fraud, a non-profit that supports whistleblower lawsuits, tells us that Rost's suit failed because his "initial fraud theory changed over time, and the final claim, Saris suggests, does not support the off-label marketing contention made, because the drugs were not clearly being given off-label."
"The second claim also fails, Judge Saris rules. Here the specific legal issue is whether a claim tainted by kickbacks is tainted across the chain, from doctor to pharmacy...In short, though the doctor might have gotten a kickback, it was the pharmacy that certified it was complying with the Anti-Kickback statute. The pharmacy was not certifying that the doctor was not taking payola - only that it was not. "How many cases this opinion will effect remains to be seen. What we know for sure is that it will not impact new cases going forward because the recent Obama-care legislation inserted language that says 'a claim that includes items or services resulting from a violation of this section constitutes a false or fraudulent claim for the purposes of the [False Claims Act].' ”
As for Rost, who is working as a pharmaceutical marketing expert witness, he says he is reviewing his options.