A whistleblower lawsuit alleging Regeneron Pharmaceuticals Inc. illegally paid physicians to write prescriptions was partially resuscitated by a federal appeals court Wednesday.
A district court erred when it threw out the core of the whistleblowers’ Anti-Kickback Statute claims against Regeneron under the False Claims Act’s public disclosure bar, a provision that blocks lawsuits based on allegations already available to the public, the US Court of Appeals for the Ninth Circuit said in a memorandum. The appeals court reversed dismissal of the FCA claims but affirmed dismissal of conspiracy claims against Regeneron and all other claims against Sanofi-Aventis US LLC.
The existence of the payments to physicians may have been known before the lawsuit, “but all the most pertinent details surrounding those payments—those that constitute the alleged fraud and indicate Regeneron’s intent to unlawfully induce referrals—were not,” the Ninth Circuit said.
The suit, which was brought by two former Regeneron employees, allege the company systematically made payments to physicians far above fair market value, paid for luxury hotel stays and first-class airfare in violation of its own written policies, and compensated doctors for educational events that never happened, the memorandum said. Internal audits and an external consulting firm both concluded that Regeneron may have been “inappropriately compensating” doctors.
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