UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

)
UNITED STATES OF AMERICA ex rel. )
PETER ROST, )
)
Plaintiff, ) Docket No. 03-CV-11084-PBS
)
v. ) The Honorable Patti B. Saris
)
PFIZER, INC., et al., )
)
Defendants )
)

UNITED STATES’ STATEMENT OF INTEREST

CONCERNING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

The United States, the real party in interest in this action, hereby submits this Statement

of Interest pursuant to 28 U.S.C. § 517 to respond to certain arguments raised in Defendant’s

Motion for Summary Judgment. The United States remains a real party in interest in this matter,

even where it has not intervened in the action. United States ex rel. Karvelas v. Melrose-

Wakefield Hosp., 360 F.3d 220, 231 (1st Cir. 2004). The False Claims Act (FCA), 31 U.S.C. §

3729 et seq., is the United States’ primary tool used to redress fraud on the government. As

such, the statute should be read broadly to reach all fraudulent attempts to cause the government

to pay out sums of money. United States v. Neifert-White, 390 U.S. 228, 233 (1968). Thus, the

United States has a keen interest in the development of the law in this area and in the correct

application of the law in this, and similar, cases.

Relator alleges that Defendant caused false claims for Genotropin to be submitted to the

Medicaid programs in Kentucky and Indiana as a result of (1) Defendant’s illegal marketing of

Genotropin for off-label uses, and (2) Defendant’s offering inducements to get physicians to
prescribe Genotropin. Defendant argues that Relator has failed to offer sufficient proof to sustain

such allegations. Specifically, as to the off-label claims, Defendant argues that relator has

adduced no proof that Defendant marketed Genotropin for the off-label uses alleged here, and

thus Relator cannot prove that Defendant caused the submission of any claims for such off-label

uses, regardless of whether they are covered by the specific Medicaid programs at issue. As to

the kickback claims, Defendant contends, among other things, that, at least as to the Bridge

program for indigent patients and the KIGS registry, Relator has failed to demonstrate that the

inducements at issue amounted to illegal remuneration to the physicians or, as to all the potential

kickbacks at issue, that there were claims in fact submitted to the Medicaid program by

physicians that allegedly received such remuneration. The United States takes no position on

whether Relator has failed to adduce sufficient proof to sustain his allegations here. However,

the United States does submit this brief in response to certain of the legal arguments made by

Defendant.

In particular, the United States submits that Defendant is flatly wrong in contending that,

even if Relator’s evidence were sufficient, no FCA case could lie based on allegations that

Defendant paid kickbacks to physicians to induce them to prescribe Genotropin. The payment of

a kickback renders subsequent claims false under the FCA, without regard to who submits the

claim or whether there is a certification that no such kickback was accepted. In addition, the

submission of false claims, like any other element of a cause of action, may be established by

circumstantial evidence and submission of the actual paper claim is not necessary. Finally,

proof of any remuneration paid to induce prescribing can cause a claim to be false, without

regard to whether there was an explicit agreement as to a quid pro quo. The United States further

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submits that whether a claim for drug reimbursement will be false when an off-label use is

supported by a citation in the compendia or when a prior authorization process is in place will

depend on the unique facts and circumstances in any particular case. As discussed herein,

summary judgment should not be granted simply because someone other than the defendant

submitted the false claims, a prior authorization scheme existed, or physicians deny that they

were influenced by kickbacks.

ARGUMENT

I. WHO SUBMITTED THE ULTIMATE CLAIM IS NOT DETERMINATIVE OF

LIABILITY UNDER THE FCA.

Defendant first suggest that this Court should grant summary judgment in this matter

because “the doctors did not even submit the claims - the pharmacies did – and there is no

evidence that the pharmacies or doctors made any certifications . . . at the time the claims were

made.” Def. Brief at 1. This argument, which this Court and the First Circuit have already

rejected by allowing this case to go forward, ignores the plain language of the FCA, as well as

the law in this Circuit and elsewhere. As the law establishes, liability exists under the FCA for

one who causes a false claim to be submitted, without regard to who ultimately submits the

claim. Moreover, claims arising from underlying, illegal conduct such as kickbacks are

inherently false, as well as false in their implied false representation that the goods or services

claimed were provided without any illegal kickbacks in the process.

A. Payment Of Kickback Renders Any Resulting Claims For Payment False

Compliance with the Anti-Kickback Statute, 42 U.S.C. §§ 1320a-7b (AKS) is a condition

of payment under the Medicare and Medicaid programs, and that condition applies regardless of

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which entity is submitting the claim to the government. Indeed, as this very court has held: “the

FCA is violated when a Medicaid claim is presented to the state government in violation of the

Anti-Kickback statute, even if there is no express certification of compliance with the statute.”

In re Pharmaceutical Industry Average Wholesale Price Litigation, 491 F. Supp.2d 12, 18 (D.

Mass. 2007). That holding is consistent with the law in the First Circuit as well as numerous

other courts that have found the existence of an AKS violation in the chain of causation renders a

claim non-payable and therefore false under the FCA. See United States v. Rogan, 517 F.3d 449,

452 (7th Cir. 2008) (upholding FCA judgment and noting that “paying kickbacks has a good

probability of affecting” the government’s decision to pay resulting claims); United States ex rel.

McNutt v. Haleyville Medical Supplies, 423 F.3d 1256, 1259-1260 (11th Cir. 2005) (imposing

FCA liability on defendant based on knowing violation of AKS and submission of claims for

Medicare reimbursement, without any discussion of expressly false certifications);United States

ex rel. Kneepkins v. Gambro Healthcare, 115 F. Supp.2d 35, 43 (D. Mass. 2000) (allegations that

rebates offered in return for referrals violated the AKS were sufficient to state an FCA claim);

United States ex rel. Barrett v. Columbia/HCA Healthcare, 251 F. Supp.2d 28, 32-34 (D.D.C.

2003) (applying implied certification theory to recognize potential FCA liability based upon

alleged violation of AKS); United States ex rel. Pogue v. Diabetes Treatment Centers of

America, 238 F. Supp.2d 258, 264 (D.D.C. 2002) (affirming prior holding that “Relator’s

allegation that the government would not have paid the claims submitted if it had known of the

alleged kickback and Stark law violations was sufficient to state a False Claims Act claim.”); see

also United States ex rel. Duxbury v. Ortho Biotech Products, 579 F.3d 13, 29-30 (1st Cir. 2009)

(holding the complaint met Rule (9)b requirements even where it did not allege that the

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defendant “itself submitted false claims to the government, but that, through [the defendant’s]

illegal kickbacks, false claims to the Medicare Program were filed by medical providers

[including hospitals and cancer treatment centers] for reimbursement of the defendant’s drug,

with no discussion of express certification). Thus, if Relator here has sufficient evidence to show

that Defendant offered remuneration that amounted to an illegal inducement under the AKS and

that there were in fact claims to Kentucky and Indiana Medicaid by the physicians that received

such remuneration, Relator will have established that any such claims submitted for Genotropin

were “false” within the meaning of the FCA.

This conclusion is supported by sound policy, as well as sound law. When a doctor

prescribes a medical device or drug for a patient, the patient has a right to expect that the doctor’s

recommendation is based solely on his/her medical judgment of what is in the patient’s best

interests. But, when a company pays kickbacks to a doctor in order to induce him/her to use the

company’s products, it fundamentally compromises the integrity of this doctor-patient

relationship. The Medicaid system relies upon physicians to decide what treatment is appropriate

and medically necessary for patients, and, therefore, payable by Medicaid. As a condition of its

reimbursement, Medicaid requires that the physicians must render their services without the

conflict of receipt of a kickback. Thus, compliance with the AKS is a condition of payment, and

a claim tainted by a kickback is false.

B. Proof Of A Kickback With Respect To The Product For Which Payment Is

Claimed Is Sufficient To Establish That The Claim Is Not Payable.

Nor is defendant correct that statistical or expert evidence is required to prove causation

in this instance. It is the very fact that a physician has accepted kickbacks (if proven) that per se

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renders the claim for the goods as to which the kickback was given not payable – whether or not

the physician would have otherwise selected that particular drug.

Nor can the mere “denials” of a physician that the payment affected their judgment defeat

a FCA claim for kickback-induced claims. It is the very nature of conflicts of interest and

kickbacks that they are intended to induce prescribing. Once a doctor has accepted a kickback,

his or her decision making process is tainted and the resulting claims are therefore false.

This conclusion is supported not only by the extensive case law holding that the existence

of a kickback to induce a particular type of claim causes the claim to be non-payable, without

regard to whether there is any explicit certification, but also by fifty years of jurisprudence

holding that illegal conflict of interest (of which a kickback is one type) causes the claim for the

goods or services to be false without evidence of additional loss to the government as a result of

the payment.

This line of cases goes back to basic principles of equity as noted in United States v.

Mississippi Valley Generating Co., 364 U.S. 520, 549-50 (1961), where the Court held that the

contract was invalidated by a conflict of interest even without proof of actual additional costs to

the government, or that the conflicted agent acted differently than he would have without the

conflict. The Court explained:

[A]n impairment of impartial judgment can occur in even the most well-meaning
men when their personal economic interests are affected by the business they
transact on behalf of the Government.

United States. v. Mississippi Valley Generating Co., 364 U.S. 520, 549-50 (1961). As the Court

explained in that case, in context of a prohibited conflict of interest,

It may be true, as the respondent asserts, that none of [the conflicted agent’s]
activities to which we have alluded adversely affected the Government in any

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 way. However, that question is irrelevant to a consideration of whether or not [the
conflicted agent] violated the [conflict of interest] statute. As we have indicated,
the statute is preventive in nature; it lays down an absolute standard of conduct
which [the agent] violated by entering into a relationship which made it difficult
for him to represent the Government with the singleness of purpose required by
the statute.
Id. at 559. Similarly, in K& R Engineering v. United States, 616 F.2d 469, 475 (Ct. Cl. 1980),

the Court held that a federal employee’s receipt of payment in connection with the award of

contracts precluded the contractor from receiving any payment on those awards, without regard

to whether value had been delivered. The Court explained:

As Mississippi Valley makes clear, it is the potential for injuring the public
interest created by a conflict of interest that requires invalidation of the tainted
contract. It therefore is immaterial whether the particular taint has or has not in
fact caused the government any financial loss or damages. What the statute
condemns is the inevitable taint of the contract itself that results when it is the
product of a conflict of interest. As this court stated in Michigan Steel Box Co. v.
United States, 49 Ct.Cl. 421, 440 (1914), tainted contracts are disaffirmed because
of “the breach of the agent's . . . duty toward those he has undertaken to represent .
. . and not (because of) the quantum of damage to the one or the amount of benefit
to the other.”

Id. Accord U.S. v. Acme Process Equipment, 385 U.S. 138, 145 (1966) (civil recision remedy

“necessary to effectuate the purpose fo the [Anti-Kickback] Act); U.S. v. Medico Industries, 784

F.2d 840, 845 (7th Cir. 1986) (abrogation of contract due to conflict of interest).

Likewise, if a physician accepts a kickback to induce him to prescribe a particular product

that may be reimbursed by a federal health care insurance program in violation of the AKS, that

physician has breached his duty as a Medicaid provider and the billings for that product as well

as those for his services in ordering the product are false claims because the United States did not

get the taint-free and unbiased medical decision making in the selection of the product that is

required.

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 C. A Claim’s Falsity Does Not Depend On The Presenter’s Knowledge Of Such
Falsity

The plain language of the FCA also makes clear that liability does not depend on who

submits the actual claim. The FCA expressly imposes liability on two distinct categories of

actors: any person who knowingly presents a false claim, or any person who knowingly causes

the presentation of a false claim (or a statement in support thereof). 31 U.S.C. § 3729(a)(1). If

falsity depended solely on the knowledge of the party submitting the claim, the concept of

causing a false claim to be submitted would be superfluous; under such a reading of the statute,

the only claims that could ever be false would be those that are submitted by the wrongdoer

himself. This reading, however, would disregard the basic principle of statutory construction:

that each word in a statute must be given its own meaning.

Such an interpretation would also contravene the longstanding and widely held

proposition that the FCA reaches claims that are rendered false by one party, but submitted to the

government by another. In United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943), the

Supreme Court held that an illegal scheme to defraud the government renders the resulting

downstream claims false notwithstanding that the parties that submitted the claims were

innocent, both in terms of their knowledge of the illegal scam and insofar as none participated in

the illegal scheme to rig bids. As the Court stated:

By their conduct, the [defendants] thus caused the government to pay claims of the
local sponsors in order that they might in turn pay [defendants] under contracts
found to have been executed as the result of the fraudulent bidding . . . . These
funds are as much in need of protection from fraudulent claims as any other
federal money, and the statute does not make the extent of their safeguard
dependent upon the bookkeeping devices used for their distribution. The
Senatorial sponsor of this bill broadly asserted that its object was to provide
protection against those who would ‘cheat the United States.’ The fraud here

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 could not have been any more of an effort to cheat the United States if there had
been no state intermediary.

Hess, 317 U.S. at 543-44 (emphasis added) (footnotes omitted). Similarly, in United States v.

Bornstein, 423 U.S. 303, 313 (1976), the Supreme Court held that claims generated and

submitted by an innocent prime contractor were rendered false under the FCA by the previous

actions of a subcontractor.

Moreover, the First Circuit has long ago made clear that its understands Bornstein to

permit FCA liability for false claims submitted through innocent intermediaries and has recently

reaffirmed that point. Thus, in United States v. Rivera, 55 F.3d 703, 706-07 (1st Cir. 1995), the

First Circuit cited Bornstein, 423 U.S. at 309, for the proposition that “a false claim may be

presented through an innocent third party.” Id. (holding that claims for payment generated by an

innocent third party arising from a fraud perpetrated on the private lender were false). More

recently, in this very case, the First Circuit also noted this point in reversing the dismissal of the

original complaint without leave to amend. See United States ex rel. Rost v. Pfizer, 507 F.3d 720

(1st Cir. 2007). In determining that the relator should be allowed to amend his complaint, the

First Circuit explained:

Under the FCA, Rost must show that Pfizer “cause[d] to be presented” a false
claim for payment. 31 U.S.C. § 3729(a)(1). That there were allegedly intervening
persons who actually submitted the claims does not itself necessarily break the
causal connection when the claims are foreseeable.

Id. (citation omitted); see United States ex rel. Franklin v. Parke-Davis, 147 F. Supp.2d 39, 52-

53 (D. Mass. 2001) (holding that relator had stated an FCA claim by alleging that the drug

manufacturer foreseeably caused the submission of false claims through off-label promotion,

even though the prescriptions were written by physicians and submitted by pharmacies); In re

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Pharmaceutical Industry Average Wholesale Price Litigation, 491 F. Supp.2d 12 (finding that

submission of false claims for drugs was not only foreseeable, but an intended result of the

fraudulent scheme).

Likewise here, the fact that Pharmacia may have caused false claims to be submitted

through the actions of pharmacists is irrelevant. As long as the submission of the false claims

was the foreseeable result of its illegal kickbacks, it has caused the submission of false claims

and is liable under the FCA.

Pharmacia relies on United States ex rel. Thomas v. Bailey, 2008 WL 4853630 (E.D. Ark.

Nov. 6, 2008), to argue to the contrary that claims arising from that same kickback scheme are

not false or fraudulent because the claims at issue were actually submitted to the government by

an innocent intermediary, rather than by the physicians that receiving the alleged kickback. Id. at

*13. Although the district court in Thomas held correctly that compliance with the AKS is a

condition of payment and that, when a party involved in the kickback scheme submitted claims,

they amount to false claims, Thomas fell short in finding that claims arising from that very same

kickback scheme are not false when submitted to the government by an innocent intermediary.

Boiled down, Thomas concluded that a claim that results from a kickback and that is false when

submitted by a wrongdoer is laundered into a “clean” claim when an innocent third-party finally

submits the claim to the government for payment. See Thomas at *13. The court in Thomas thus

propounded a narrow construction of the terms “false” and “fraudulent” in the FCA that

improperly turned on the knowledge or participation of the person who happened to submit the

resulting claim to Medicare.

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 This court should reject this view for three reasons. First, as noted above, the plain

language of the FCA establishes that liability may attach when a person causes another to present

a false claim and also makes clear that falsity and knowledge are distinct elements of an FCA

violation, thus plainly contemplating that a claim can be false whether or not it is submitted by

the wrongdoer or an innocent third party.

Second, claims that arise from a kickback scheme are false because they are the result of a

kickback – no further express or implied false statement or certification is required to render such

infected claims false, and none can wash the claim clean. For example, in United States v.

Dynamics Research Corp., no. 03cv11965, 2008 WL 886035 (Mar. 31, 2008, D. Mass.),

consultants for the United States took sums of money from vendors in exchange for making

recommendations to the government about products the government should purchase from those

vendors. Id. at *1. The court found that, even assuming that the invoices that the vendors

ultimately submitted to the government were facially accurate, it was enough that the invoices

were rooted in the fraudulent scheme to render them false. Id. at *11. As the court stated,

“[e]ven assuming arguendo that Dataram brand memory satisfied the government’s requirements

. . . . the conflicts of interest [between the vendor and consultant] undermined the legitimacy of

the claims made on the government.” Id. at. 12. In United States v. Incorporated Village of

Island Park, 888 F. Supp. 419 (E.D.N.Y. 1995), the parties that applied for the relevant mortgage

subsidies were innocent, as was the lender that later submitted claims to the government for

them. Island Park. 888 F. Supp. at 440-441. The court, though, found that every single claim

that resulted from defendants’ scheme to violate non-discrimination provisions were false for no

reason other than their relationship to the prior fraudulent scheme. Id. (it “is irrelevant that . . .

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the lender who submitted the claims for mortgage subsidies is totally innocent”); see also United

States ex rel. Schmidt v. Zimmer, Inc., 386 F.3d 235, 244 (3d Cir. 2004) (analyzing FCA liability

of supplier accused of paying kickbacks, and concluding that knowledge and conduct of the

supplier, not that of the actual presenter of the claim, that is relevant). In these cases, it was the

unlawful, false, or fraudulent conduct that undermined the integrity of the submitted claim and

violated a basic condition of the payment’s claim by the government, rendering it false under the

Act. No extra “false statements” made by the party submitting the claim were necessary for the

claim to be false.

This is precisely the situation presented in this case. As noted, a condition of the payment

of any claim submitted to Medicare is that the claim did not result from a financial transaction

that violated the AKS, i.e., a kickback. Here, Defendant is alleged to have knowingly and

willfully paid kickbacks to induce the use or referral of Defendant’s products and thereby cause

the submission of claims to and part of the reimbursement from, Medicare. This alleged conduct

would have eviscerated this payment condition of the resulting claims, rendering them false. As

in Hess, Rivera, Island Park, and Dynamics Research, these claims are false because they are a

result of the illegal conduct that led to them, and nothing else is needed to prove their falsity.

Compare United States ex rel. Singh v. Bradford Regional Med. Ctr., 2006 WL 2642518 at *7,

(W.D. Pa. Sept. 13, 2006) (ruling on a motion under Fed.R.Civ.P. 9(b), the court finds that “the

falsity of the instant claims does not turn on anything unique to any individual claim or that

would be revealed from an examination of any claim, but rather the claims are false because of

the improper financial arrangements between [the hospital] and the physicians) (internal

quotations omitted). No extra statements or certifications by the submitting party are required,

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and whether the submitting party participated in or happened to know about the illegal conduct

that produced the claim is irrelevant to the question of falsity.

Third, even if the court analyzes falsity in the context of implied certification, the infected

claim will still be false as the knowledge of the submitter is not relevant to the claim’s falsity.

Under false certification theory (whether express or implied), fraudulent or illegal conduct that

violates a condition of payment renders the resulting claim not properly payable. This, in turn,

renders false any subsequent express or implied statements regarding the propriety of the claim.

The claim is rendered false by the false implied or express certification of compliance.

As discussed above, compliance with the AKS is a condition of payment, and prohibits

any party from paying kickbacks in connection with a claim. See, e.g., 42 U.S.C. § 1320a-

7b(b)(2) (“whoever knowingly and willfully offers or pays any remuneration”) (emphasis added).

Even in the absence of an express certification of compliance, a party that submits a claim for

payment impliedly certifies compliance with all conditions of payment, i.e., that it is properly

payable. Consequently, if a party pays a kickback to induce the prescribing of a particular drug,

it renders false the submitter’s implied or express certification of compliance that the resulting

claim complies with the requirements of the AKS. The falsity of the claims at issue solely

depends on whether those claims resulted from a financial relationship prohibited by the AKS.

Their falsity does not, by contrast, depend on the knowledge or conduct of the party submitting

the claim.

II. CIRCUMSTANTIAL EVIDENCE IS SUFFICIENT TO PROVE FALSE CLAIMS.

Pharmacia also claims that the Relator has not identified the specific false claims. To the

extent that Relator has failed to develop any evidence to show that a physician that allegedly

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received a kickback prescribed Genotropin for a patient that ultimately resulted in a claim to

Kentucky or Indiana Medicaid, Defendant would be correct. However, Defendant goes too far in

arguing that the production of a particular piece of paper, as opposed to other evidence of that

claim, such as the electronic record that it occurred, is needed here in order to prevail under the

FCA. The existence of a false claim, just like any other element of a case, can be established by

circumstantial evidence sufficient to allow a reasonable jury to conclude that it is more likely

than not that it occurred. No more is required. Defendant is not entitled and must not be allowed

to avoid FCA liability at the summary judgment stage with technicalities such as insistence on

the paper record or the identification of a specific claim itself, so long as there is other sufficient

evidence to show that false claims did indeed occur. See generally Duxbury, 579 F.3d at 29-30

(adopting a more flexible standard for satisfying Rule 9(b), including “ by providing factual or

statistical evidence to strengthen the inference of fraud beyond possibility without necessarily

providing details as to each false claim” and reversing the lower court’s holding that 9(b)

requires relators to identify specific examples of false claims submitted for payment) (internal

quotations omitted).

III. THE AKS DOES NOT REQUIRE PROOF OF AN EXPLICIT QUID PRO QUO.

Pharmacia also incorrectly suggests that proof of an explicit quid pro quo would be

necessary to prove that kickbacks were paid to physicians. The plain language of the statute,

however, provides otherwise. The statute provides:

(2) Whoever knowingly and willfully offers or pays any remuneration (including
any kickback, bribe or rebate) directly or indirectly, overtly or covertly, in cash or
in kind to any person to induce such person-
* * *

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 (B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or
ordering any good, facility, service, or item for which payment may be made in whole or
in part under a Federal health care program shall be guilty of a felony and upon
conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than
five years, or both.

42 U.S.C. §§ 1320a-7b(b)(2) and (b)(2)(B).

Thus, under 42 U.S.C. § 1320a-7b(b)(2), the government need only show that the purpose

of the remuneration was to induce a person to arrange for or recommend purchasing any item,

such as a prescription drug, which is paid for in whole or part by a federal health care program

such as Medicare or Medicaid.

Moreover, if a payment is made with multiple purposes, if any one of those purposes was

to induce purchases, the payments constitute illegal remuneration. United States v. Greber, 760

F.2d 68, 71 (3rd Cir. 1985). Whereas courts have held that the illicit purpose cannot amount to

only a “mere hope and expectation” of resulting referrals for liability to attach, this Circuit has

nonetheless held that, so long as the illicit purpose was not de minimus, the "criminal law may

punish conduct if its illegal purpose is incidental to other, lawful purposes." Unites States v.

Woodward, 149 F.3d 46, 71-72 (1st Cir. 1998). See United States v. Bay State Ambulance and

Hosp. Rental Svc. Inc., 874 F.2d 20, 29-30 (1st Cir. 1989) (upholding jury instruction that

prohibited a conviction under the Anti-Kickback Statute if “the improper purpose was an

incidental or minor one”).

Thus, while the Court must determine whether or not the evidence here is sufficient to

permit a reasonable jury to conclude that a payment was made for the purpose of inducing

prescriptions, proof of an explicit quid pro quo is not required to show a kickback violation.

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IV. A PRIOR AUTHORIZATION PLAN DOES NOT ABSOLVE A DEFENDANT
FROM ALL POTENTIAL FCA LIABILITY.

Pharmacia makes the sweeping argument that the existence of a prior authorization

program for Genotropin means per se that no false claims could have slipped through the claims

process. This argument is too broad for a number of reasons. First, every state prior

authorization program is different and, even within a single state program, the program is likely

to vary from drug to drug and from year to year. So clearly, the fact that a prior authorization

program may exist is not sufficient to defeat an FCA claim. Second, to the extent that such a

prior authorization program exists, it may not have required that the underlying principal

diagnosis be listed or that the state be notified that the use is for an off-label use. Third, the mere

existence of a prior authorization regime does not mean that the Medicaid program made a

decision to pay the off-label claim. It appears that, here, all Defendant has demonstrated is that at

best there was some requirement that the physician specify the diagnosis for at least some of the

claims. Defendant has not demonstrated that anyone at the Medicaid program actually reviewed

those statements or determined that those diagnoses were payable. Moreover, contrary to

Pharmacia’s argument, that a state program had a prior authorization program is unlikely, by

itself, to negate Pharmacia’s intent under the FCA as the company may well have knowingly

engaged in an off-label marketing scheme in which it was reasonably foreseeable that claims

would be submitted to federal health care programs.

Those who deal with the Government must “turn square corners” and cannot take

advantage of government officials who may have too few resources to catch attempted fraud at

its inception. See, e.g., Rock Island, Arkansas & Louisiana R.R. v. United States, 254 U.S. 141,

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143 (1920); Rogan, 517 F.3d at 452 (“The United States is entitled to guard the public fisc

against schemes designed to take advantage of overworked, harried, or inattentive disbursing

officers”). At a minimum, the mere existence of a prior authorization program, without proof of

what that program actually entailed in practice, is not sufficient to negate the potential for false

claims. In fact, it would be ironic indeed if a state Medicaid’s attempts to prevent the submission

of unauthorized claims were then taken to absolve those causing the claims to be submitted from

the duty to submit and cause to be submitted only appropriately payable claims.

CONCLUSION

The United States submits this brief regarding how to interpret and apply certain aspects

of the Medicaid Act and the FCA. The United States takes no position on the sufficiency of the

complaint herein.

Respectfully submitted,

TONY WEST
ASSISTANT ATTORNEY GENERAL

CARMEN M. ORTIZ
UNITED STATES ATTORNEY

/s/ Sara Miron Bloom _______

SARA MIRON BLOOM
Assistant U.S. Attorney
Suite 9200, One Courthouse Way
Boston, MA 02210
Phone: (617) 748-3265

JOYCE R. BRANDA
JAMIE ANN YAVELBERG
Civil Division, Commercial Litigation Branch
P. O. Box 261, Ben Franklin Station
Washington, D.C. 20004
Dated: December 23, 2009 Phone: (202) 353-0426

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 CERTIFICATE OF SERVICE

I hereby certify that the foregoing Statement of Interest filed through the ECF system will
be sent electronically to the registered participants as identified on the Notice of Electronic Filing
(NEF) on this date.

Respectfully submitted,

CARMEN M. ORTIZ
United States Attorney

By: /s/ Sara M. Bloom

Sara M. Bloom
Assistant U.S. Attorney
U. S. Attorney's Office
John Joseph Moakley
United States Courthouse
1 Courthouse Way, Suite 9200
Boston, MA 02210
Date: December 23, 2009 617-748-3265

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