PETER P. LAWTON, ex rel. UNITED STATES OF AMERICA; and THE STATES OF CALIFORNIA, COLORADO, CONNECTICUT, DISTRICT OF COLUMBIA, DELAWARE, FLORIDA, GEORGIA, HAWAII, IOWA, ILLINOIS, INDIANA, LOUISIANA, MASSACHUSETTS, MARYLAND, MICHIGAN, MINNESOTA, MONTANA, NORTH CAROLINA, NEW JERSEY, NEW MEXICO, NEVADA, NEW YORK, OKLAHOMA, RHODE ISLAND, TENNESSEE, TEXAS, VIRGINIA, WASHINGTON, WISCONSIN, Plaintiffs, Appellants,
TAKEDA PHARMACEUTICAL COMPANY, LTD.; TAKEDA PHARMACEUTICALS U.S.A., INC., f/k/a Takeda Pharmaceuticals North America, Inc.; TAKEDA PHARMACEUTICALS INTERNATIONAL INC.; TAKEDA DEVELOPMENT CENTER AMERICAS, INC., f/k/a Takeda Global Research & Development Center Inc.; ELI LILLY AND COMPANY, Defendants, Appellees.
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS [Hon. Mark L. Wolf, U.S. District Judge]
E. Kovel, with whom John R. Low-Beer, Of Counsel, and Kirby
McInerney LLP were on brief, for appellants.
Jeffrey Layne, with whom Jonathan S. Franklin, Sarah M.
Cummings, and Norton Rose Fulbright U.S. LLP were on brief,
Lynch, Stahl, and Barron, Circuit Judges.
Peter Lawton ("Lawton") brought a qui tam
action against Appellees Takeda Pharmaceutical Company, Ltd.
and its affiliates ("Takeda") and Eli Lilly and
Company ("Eli Lilly") (collectively,
"Defendants") under the False Claims Act
("FCA"), 31 U.S.C. § 3729 et seq.,
and the False Claims Acts of 28 different states and the
District of Columbia. Lawton alleges that Takeda and Eli Lilly
conspired in a fraudulent marketing campaign that caused
third-parties to submit false reimbursement claims to
government entities for off-label uses of Actos, a treatment
for Type 2 diabetes.
district court dismissed all of Lawton's claims, holding
that Lawton had not pled his claims with the particularity
required by Federal Rule of Civil Procedure 9(b). Lawton
contests this ruling on appeal, and maintains that his
allegations sufficiently plead that false claims were
submitted to both federal and state government programs.
After thoroughly reviewing these allegations, we affirm.
Facts & Background
this appeal follows the granting of a motion to dismiss, we
recite the relevant facts as they appear in Lawton's
Second Amended Complaint. See Hochendoner v. Genzyme
Corp., 823 F.3d 724, 728 (1st Cir. 2016).
is a brand name drug approved by the FDA for improving blood
sugar control in adults with Type 2 diabetes. The drug is
manufactured, promoted, marketed, and sold by
2012, Peter Lawton filed a qui tam complaint against
Takeda alleging that it had engaged in an illegal off-label
marketing campaign for Actos in violation of 21 U.S.C. §
321 et seq. (the "Food, Drug & Cosmetic
Act"), and used illegal kickbacks to support that
campaign in violation of 42 U.S.C. § 1320a-7b(b) (the
"Anti-Kickback Statute"). Lawton -- a former chemist
and patent litigator at Takeda competitor GlaxoSmithKline --
further alleged that through this campaign, Takeda and Eli
Lilly had knowingly caused third-parties to submit false or
fraudulent claims for payment to federal and state government
programs. See, e.g., 31 U.S.C. §
3729(a); N.Y. State Fin. Law §§ 188-89.
made his first amendment to his complaint in February 2014,
and after the United States declined to intervene and the
action was unsealed, his case began in earnest. In August
2015, the district court allowed Lawton to amend his
complaint again ("Second Amended Complaint"), which
he filed the following month and is the subject of this
Second Amended Complaint alleged that starting in the late
1990s and lasting until 2011, Defendants utilized a marketing
scheme designed to develop and promote
"quasi-scientific" bases for off-label use of
Actos, specifically the treatment of
prediabetes. The claimed centerpiece of this campaign
involved the development of dozens of pro-Actos research
studies and subsequent publications substantiating these
claims. The most prominent of these studies, Lawton claims,
was a 2006 paper ("ACT NOW Study") on the
prevention of Type 2 diabetes. Allegedly conceived and funded
by Takeda but ostensibly authored by Dr. Ralph DeFronzo, the
ACT NOW Study advocated for the use of Actos as an effective
treatment for prediabetes. Lawton alleges that Dr. DeFronzo
and other "thought leaders" and researchers like
him received compensation, kickbacks, and other indirect
financial inducements from Takeda for their Actos studies,
related speeches, and supporting presentations. Many of these
studies, however, were criticized by various academic
journals, peer review panels, and the FDA.
allegedly also established a specialized Actos sales force to
parallel this campaign, and tasked it with encouraging
physicians to prescribe Actos as a safe and effective
treatment for prediabetes. Takeda also supposedly engaged in
direct marketing to the public about the off-label use of
Actos and made large contributions to several educational and
research organizations to gain influence over their views on
prediabetes treatments. These efforts purportedly continued
even after Takeda knew that the results of many of these
studies were inconclusive.
on these allegations, Lawton claimed that Takeda and Eli
Lilly violated the FCA and analogous state statutes by
causing false claims for Actos to be presented to ...