Court Finds Qui Tam Relators Failed to Satisfy Evidentiary Requirements for Alleged Kickback Scheme of Pharmaceutical Company in Texas Case

Tuesday, December 22, 2015
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On December 10, 2015, U.S. District Court for the Southern District of Texas granted defendant's partial motion for summary judgment in a qui tam case alleging violations of the Anti-Kickback Statute (AKS).  The case was originally filed on June 10, 2003, by relators John King and Tammy Drummond, naming several pharmaceutical companies as defendants including Solvay Pharmaceuticals Inc. (SPI).  The government declined to intervene in February 2011.  On March 3, 2015, SPI filed its partial motion for summary judgment at the close of discovery arguing that the relators failed to show that the benefits provided to physicians violated the AKS.  U.S. District Judge Gary H. Miller, agreed with SPI's assertions focusing on three deficiencies in the relators' claims including:

(1)     insufficient evidence that the alleged kickbacks were actually paid;

(2)    insufficient evidence that prescriptions were the result of such kickbacks; and

(3)    insufficient evidence that SPI possessed the required intent to induce physicians to prescribe its drugs to patients utilizing government health care programs.  

To read another one of my blog posts regarding standing to sue in FCA cases, click here

Insufficient Evidence of Actual Payments Made.

The relators provided data sets during discovery which they asserted contained data of claims for the drugs that were submitted as a result of the alleged scheme.  SPI argued that it further requested information regarding the source, composition or manipulation of the data which was not provided by the relators until after the close of discovery.  SPI objected to the custodial affidavits produced by the relators certifying to the raw data, stating that it was improper to use affidavits of undisclosed witnesses.  While the court expressed concern about the relators not being forthright in disclosing this information, it was essentially a moot point in its overall decision. 

Insufficient Evidence to Show Prescriptions Resulted From Alleged Kickbacks.

SPI points out several instances in which the relators' link between the alleged kickbacks provided to physicians and actual prescriptions written fail to prove such prescriptions for SPI's drugs were written because of a kickback.  First, SPI notes that nine of the physicians were writing prescriptions for SPI's drugs prior to the commencement of the alleged kickbacks.  For another physician, more than two years had passed between the alleged receipt of a kickback and the submission of a claim.  Additionally, four other doctors allegedly received kickbacks in payment form for giving presentations for SPI which did not result in claims for over a year.  SPI argued that these instances are not sufficient temporal links to satisfy the AKS.  For all other physicians contained in claims data, SPI contended that the relators failed to provide any evidence of influence.  

Relators did, however, note that a sufficient temporal link was established to survive SPI's motion to dismiss.  Accordingly, the court did agree that although several issues with causation existed as to many of the listed physicians, there was enough evidentiary support as to some of the physicians to survive summary judgment as to whether the alleged kickbacks resulted in an increase of prescriptions ultimately resulting in the submission of false claims.  However, this did not conclude the court's overall analysis for purposes of SPI's request for summary judgment. 

Insufficient Evidence to Prove SPI's Required Intent.

Intent is the crux that ultimately led to the court's decision.  The court stated, "While there is some evidence that some claims were made because of the payments, that does not end the inquiry.  A violation of the [U.S.] AKS requires a knowing and willful provision of funds in return for prescriptions."  

The relators argued that summary judgment could not be granted unless there was a finding that no evidence of scienter (intent) existed, and that a False Claims Act (FCA) relator can establish the scienter element through mere circumstantial evidence.  The court found, however, that the relators failed to present any evidence that would allow a reasonable juror to conclude that SPI intended to induce the physicians linked to the claims data to prescribe its drugs in exchange for the alleged kickbacks.  The court further noted that the only evidence presented by the relators that signaled SPI's intent was not linked to claims paid by the government and therefore, would not result in an FCA claim.  Accordingly, the relators' evidence as provided was insufficient to bar summary judgment.  The court dismissed all claims of AKS violations against SPI with prejudice disallowing the relators from reasserting the same.  

To read the full order issued by U.S. District Judge Gary H. Miller, on December 10, 2015, click here

Important Take-Aways From This Case.

The court's ruling in this case provides us with two important take-aways.  The first would be the importance of direct evidence of a causal link between alleged kickbacks and the submission of claims.  Section 1320(b), 42 United States Code, sets the stage for what qualifies as an illegal remuneration in violation of the AKS.  Secondly, well-documented compliance education and training materials can demonstrate the failure to meet the scienter element of the AKS


Are you currently facing False Claims Act allegations, or do you have direct knowledge of False Claims Act violations in the workplace? 

Contact Health Law Attorneys Experienced with Qui Tam or Whistleblower Cases.

Attorneys with The Health Law Firm also represent health care professionals and health facilities in qui tam or whistleblower cases both in defending such claims and in bringing such claims.  We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding, and other services that assist us in such matters.  We have represented doctors, nurses and others as relators in bringing qui tam or whistleblower cases, as well.

To contact The Health Law Firm, please call (407) 331-6620 and visit our website at


Memorandum Opinion and Order 13-21, Dec. 10, 2015

Hussey, P. Ryan.  "Court Finds Intent Element Did Not Exist in Alleged Kickback Scheme."  Health Care Liability and Litigation Practice Group Leadership.  American Health Lawyers Association: 17 Dec. 2015.  E-mail.  18 Dec. 2015.

About the Author:
George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida area. The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

Florida health attorney, qui tam lawyer, health law attorney, Florida health lawyer, The Health Law Firm, health law defense lawyer, health care fraud attorney, whistleblower attorney, AKS lawyer, Anti-Kickback Statute attorney, False Claims Act defense lawyer, FCA attorney, illegal kickbacks, DOJ settlement attorney, government health care fraud, health fraud and abuse allegations, health fraud attorney, FCA legal representation, relator attorney, FCA intent requirement, FCA discovery requirements

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

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