For the Defense - Volume 2, Issue 4 - 2017 - 14
cured." This concession, said the Court, "doom[ed]
his case."33 In particular, the relator could not
cite any authority for the theory that on-label
uses of a drug violated Medicare's "reasonable
and necessary" requirement. The Court observed
that the relator had disclosed evidence of the
alleged reporting deficiencies to the FDA and
the Department of Justice; yet "the FDA has
not merely continued its approval of Avastin for
the at-risk populations that Petratos claims are
adversely affected by the undisclosed data, but
has added three more approved indications for
the drug" and "the Department of Justice has
taken no action against Genentech and declined
to intervene in this suit."34 Ultimately, according
to the Court, because even the expert agencies
and regulators deemed the alleged violations
insubstantial, "we do not think it appropriate
for a private citizen to enforce these regulations
through the False Claims Act."35 This is a significant holding for qui tam defendants: although
the government frequently determines not to
intervene in qui tam cases,36 courts have previously
rejected the view that such a determination bears
upon questions of materiality, or indeed, upon the
merits at all.37
The Court further made clear that, for pleading
purposes, materiality is entirely distinct from
causation, which must also be alleged under the
FCA. That is, the statute requires not only that the
defendant's misconduct affect the government's
decision to pay for the good or service at issue once
the claim submitted (materiality), but also that the
alleged false claim is "integral to the causal chain
leading to payment," i.e., that the defendant's
alleged conduct was the reason the a false claim
was submitted in the first place (causation).38
In the Court's view, arguments that, but for the
defendant's actions, claims for Medicare payment
would not have been submitted to the government, pertain to causation and not materiality.39 As
the Court explained, "[c]ollapsing the materiality
analysis into a causation inquiry would render the
materiality element 'surplusage[.]"40 Accordingly,
said the Court, "the materiality analysis begins after
a claim has been submitted" and it has "reached
the government."41
14
For The Defense | Vol. 2, Issue 4
The Court further made clear that,
for pleading purposes, materiality is
entirely distinct from causation, which
must also be alleged under the FCA.
That is, the statute requires not only
that the defendant's misconduct affect
the government's decision to pay for
the good or service at issue once the
claim submitted (materiality), but also
that the alleged false claim is "integral
to the causal chain leading to
payment," i.e., that the defendant's
alleged conduct was the reason the a
false claim was submitted in the first
place (causation).
At least two lower courts that have since
dismissed False Claims Act suits in the healthcare
sphere have cited Petratos for its heightened
materiality requirement. In one case, the District
Court granted the defendants' motion to dismiss
because the relator did not contend that the
alleged violations of Medicare's Secondary Payer
Act laws actually affected the government's
decision to pay Medicare and Medicaid claims.42 In
another case, the District Court relied heavily on
Petratos in dismissing a twenty-six-count complaint
alleging wrongful marketing and sales of the
FDA-approved blood thinner Plavix.43 While the
relator there "baldly allege[d] that government
payors would not have reimbursed for Plavix had
they been aware" of the defendants' misrepresentations that the drug was more effective than
cheaper alternatives, the District Court was not
persuaded. Instead, it dismissed the complaint
because the relator conceded that government
payors had decided to reimburse for all on-label
uses of the drug automatically.44
Other courts assessing FCA pleadings have
mostly fallen in line with the approach taken by
Table of Contents for the Digital Edition of For the Defense - Volume 2, Issue 4 - 2017
Table of Contents
Commonwealth v. Jerome King and Beyond: Trial Counsel’s Obligation to Cooperate with an Ineffective Assistance of Counsel Claim
United States ex rel. Petratos v. Genentech Inc. – The Third Circuit Embraces A Rigorous Pleading Standard for Materiality In False Claims Act Suits, But Leaves Healthcare Industry Defendants Vulnerable On Medicare Claims
Changes in the DUI Landscape: Acts 33 and 30
Police Misconduct Resulting in Arrest: Weighing the Options
Dying with Dignity: Compassionate Release in Pennsylvania
Amicus Matters
Attorney Discipline
Finding the Hidden Data in Technology to Defend Your Client
For the Defense - Volume 2, Issue 4 - 2017 - 1
For the Defense - Volume 2, Issue 4 - 2017 - 2
For the Defense - Volume 2, Issue 4 - 2017 - Table of Contents
For the Defense - Volume 2, Issue 4 - 2017 - 4
For the Defense - Volume 2, Issue 4 - 2017 - Commonwealth v. Jerome King and Beyond: Trial Counsel’s Obligation to Cooperate with an Ineffective Assistance of Counsel Claim
For the Defense - Volume 2, Issue 4 - 2017 - 6
For the Defense - Volume 2, Issue 4 - 2017 - 7
For the Defense - Volume 2, Issue 4 - 2017 - 8
For the Defense - Volume 2, Issue 4 - 2017 - 9
For the Defense - Volume 2, Issue 4 - 2017 - 10
For the Defense - Volume 2, Issue 4 - 2017 - United States ex rel. Petratos v. Genentech Inc. – The Third Circuit Embraces A Rigorous Pleading Standard for Materiality In False Claims Act Suits, But Leaves Healthcare Industry Defendants Vulnerable On Medicare Claims
For the Defense - Volume 2, Issue 4 - 2017 - 12
For the Defense - Volume 2, Issue 4 - 2017 - 13
For the Defense - Volume 2, Issue 4 - 2017 - 14
For the Defense - Volume 2, Issue 4 - 2017 - 15
For the Defense - Volume 2, Issue 4 - 2017 - 16
For the Defense - Volume 2, Issue 4 - 2017 - 17
For the Defense - Volume 2, Issue 4 - 2017 - Changes in the DUI Landscape: Acts 33 and 30
For the Defense - Volume 2, Issue 4 - 2017 - 19
For the Defense - Volume 2, Issue 4 - 2017 - 20
For the Defense - Volume 2, Issue 4 - 2017 - 21
For the Defense - Volume 2, Issue 4 - 2017 - Police Misconduct Resulting in Arrest: Weighing the Options
For the Defense - Volume 2, Issue 4 - 2017 - 23
For the Defense - Volume 2, Issue 4 - 2017 - 24
For the Defense - Volume 2, Issue 4 - 2017 - 25
For the Defense - Volume 2, Issue 4 - 2017 - 26
For the Defense - Volume 2, Issue 4 - 2017 - 27
For the Defense - Volume 2, Issue 4 - 2017 - 28
For the Defense - Volume 2, Issue 4 - 2017 - Dying with Dignity: Compassionate Release in Pennsylvania
For the Defense - Volume 2, Issue 4 - 2017 - 30
For the Defense - Volume 2, Issue 4 - 2017 - 31
For the Defense - Volume 2, Issue 4 - 2017 - 32
For the Defense - Volume 2, Issue 4 - 2017 - 33
For the Defense - Volume 2, Issue 4 - 2017 - 34
For the Defense - Volume 2, Issue 4 - 2017 - Amicus Matters
For the Defense - Volume 2, Issue 4 - 2017 - 36
For the Defense - Volume 2, Issue 4 - 2017 - 37
For the Defense - Volume 2, Issue 4 - 2017 - 38
For the Defense - Volume 2, Issue 4 - 2017 - 39
For the Defense - Volume 2, Issue 4 - 2017 - Attorney Discipline
For the Defense - Volume 2, Issue 4 - 2017 - 41
For the Defense - Volume 2, Issue 4 - 2017 - 42
For the Defense - Volume 2, Issue 4 - 2017 - 43
For the Defense - Volume 2, Issue 4 - 2017 - Finding the Hidden Data in Technology to Defend Your Client
For the Defense - Volume 2, Issue 4 - 2017 - 45
For the Defense - Volume 2, Issue 4 - 2017 - 46
For the Defense - Volume 2, Issue 4 - 2017 - 47
For the Defense - Volume 2, Issue 4 - 2017 - 48
For the Defense - Volume 2, Issue 4 - 2017 - 49
For the Defense - Volume 2, Issue 4 - 2017 - 50
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