Fourth Circuit Adds Unnecessary Pleading Hurdle for Qui Tam Actions

A sales manager at Takeda Pharmaceuticals brought a qui tam action against his employer under the False Claims Act. (United States ex rel. Nathan v. Takeda Pharmaceuticals America Inc., No. 11-2077 (4th Cir. 2013)).

The whistleblower claimed that his employer violated § 3729(a)(1)(A) of the Act by causing false claims to be presented to the government for payment.

However, to trigger liability under the Act, a claim for payment must have actually been submitted to the federal government. In dismissing the whistleblower’s suit, the Fourth Circuit determined that the whistleblower failed to point to any specific reimbursement claims submitted to the Government that related to the company’s alleged off-label marketing of its drugs.

The whistleblower said that Takeda was seeking reimbursement for the costs of prescriptions targeted at off-label use, which are typically not subject to government reimbursement. To prove his claim, the whistleblower utilized statistical evidence and made general allegations that Takeda engaged in a “scheme” to defraud the government. However, the whistleblower failed to point to even one specific reimbursement claim by Takeda.

The court stressed that while the whistleblower’s claim show that a false claim could have been filed, liability under the False Claims Act attaches only to false claims that were actually submitted to the government for reimbursement.

In ruling for Takeda, the court added that general allegations do not identify with particularity any claims that would trigger liability under the Act.

To learn more about whistleblowers and the False Claim Act, visit the Nolan Auerbach website.

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