U.S. ex rel. Ibanez v. Bristol-Myers Squibb Company, et al., No. 16-3154 (McKEAGUE, Kethledge, Stranch).
The relators filed this qui tam False Claims Act claim against two pharmaceutical companies, alleging that the companies participated in a complex, nationwide scheme to improperly promote the antipsychotic drug Abilify, which caused false claims to be submitted to the government. The district court granted the defendants’ motion to dismiss the qui tam claims, and denied the plaintiffs an opportunity to file a third amended complaint, finding that the amended complaint failed to plead presentment with adequate particularity. The plaintiffs appealed.
The Sixth Circuit affirmed. The Court held that the plaintiffs had failed to provide a representative claim describing each step in the causal link leading to the false claim with the particularity required by Rule 9(b): a prescription reimbursement submitted to the government for a tainted prescription of Abilify. The Court refused to apply a “relaxed” pleading standard that would have allowed a claim if there was an allegation of “specific personal knowledge that relates directly to billing practices” supporting a “strong inference that a [false] claim was submitted.” The Court found that this personal-knowledge exception only applies in limited circumstances like those of U.S. ex rel. Prather v. Brookdale Senior Living Cmtys., Inc., 838 F.3d 750, 768 (6th Cir. 2016), where the relators directly engaged with the false claims such that they had personal knowledge of billing practices. The majority held that the proposed amended complaint did not provide any representative claims, and that the relators did not have the requisite personal knowledge of billing practices necessary to meet the particularity pleading standard.
Judge Stranch dissented as to whether the plaintiffs satisfied their pleading requirements. Relying on precedent from other circuits, she found that particularity may be satisfied where a relator “alleg[es] particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted.” She pointed to a number of examples in the complaint that she found provide adequate and fair notice to the defendants as to the claims brought against them, and she found that the relators’ personal knowledge of the corporate strategies employed by the companies to promote off-label uses of Abilify, combined with extensive statistical evidence, created a strong inference that the scheme occurred and that it resulted in substantial claims paid by the government.