## Facts

- A former pharmaceutical sales representative brought a qui tam action under the False Claims Act (FCA) and related New York statutes against a drug manufacturer.
- The pleadings alleged that, from 2002 to at least 2011, the manufacturer used purportedly educational “speaker programs” as a vehicle to provide remuneration to physicians to influence prescribing of multiple cardiovascular and related drugs.
- The alleged remuneration included honoraria, expensive meals, alcohol, travel, lodging, and entertainment.
- The complaints alleged the events were commonly social in nature, involved repeat attendance by the same physicians, and included role-swapping among “speakers” and attendees, with little substantive educational content.
- The United States and New York intervened on the kickback-based claims, alleging that the scheme caused prescriptions to be billed to Medicare, Medicaid, and other government programs.
- The relator also alleged separate FCA theories based on off-label promotion of a specific antihypertensive drug for unapproved uses, allegedly causing reimbursement submissions for non-covered claims.
- The defendant moved to dismiss the federal and state complaints in intervention and the relator’s amended complaint under Rule 12(b)(6), including for failure to plead fraud with particularity under Rule 9(b).

## Issues

1. Whether alleged Anti-Kickback Statute (AKS) violations tied to sham speaker programs can serve as a predicate for FCA liability.
2. Whether the pleadings satisfied Rule 9(b) by alleging “reliable indicia” that false claims were submitted, without identifying each claim by date and number.
3. Whether the pleadings adequately alleged causation and materiality—i.e., that remuneration induced prescriptions and that AKS compliance was material to government payment.
4. How the 2010 statutory amendment stating that claims “resulting from” AKS violations are “false or fraudulent” affected pre- and post-amendment claims.
5. Whether the off-label promotion allegations were sufficiently particularized and adequately linked promotional conduct to the submission of false or non-reimbursable claims.

## Decision

- The court granted in part and denied in part the motions to dismiss.
- The court largely denied dismissal of the federal and New York FCA claims predicated on the alleged kickback/speaker-program scheme, permitting those claims to proceed.
- The court held that the kickback allegations were pleaded with sufficient detail as to the scheme’s operation, participants, and the asserted connection to government reimbursement.
- The court concluded that the pleadings adequately alleged causation and materiality for the kickback-based theories at the motion-to-dismiss stage.
- The court dismissed portions of the off-label promotion theories where allegations were conclusory, failed to distinguish covered from non-covered uses, or did not plausibly connect promotion to the submission of false claims with the specificity required by Rule 9(b).
- To the extent any off-label theories were pleaded with sufficient particularity and linkage to claims, they were not dismissed.

## Legal Principles

- AKS violations may support FCA liability when the pleadings plausibly allege that remuneration was intended to induce prescriptions and that resulting prescriptions were reimbursed by government programs.
- Rule 9(b) may be satisfied in FCA cases through detailed allegations describing the fraudulent scheme and providing reliable indicia that claims were submitted, even if the complaint does not list every claim’s identifying details.
- For FCA causation based on kickbacks, allegations that the defendant designed the program to increase prescriptions, tracked prescribing, and allocated benefits based on prescription volume can support an inference that the scheme resulted in reimbursed claims.
- AKS compliance can be plausibly pleaded as material to payment where the government alleges it would not have paid claims induced by illegal kickbacks and where AKS compliance functions as a condition of payment.
- Off-label promotion can support FCA liability only if the pleading plausibly alleges that the promotion led to submission of non-reimbursable claims and ties specific promotional conduct to claim submission with particularity.

## Conclusion

The court allowed the core FCA theories based on an alleged long-running kickback scheme using sham speaker programs to proceed, finding sufficient allegations of scheme mechanics, claim submission indicia, causation, and materiality, while narrowing the case by dismissing inadequately pleaded portions of the off-label promotion claims under Rule 9(b).


United States ex rel. Bilotta v. Novartis Pharm. Corp., 50 F. Supp. 3d 497 (S.D.N.Y. 2014)