A federal judge has determined former pharmaceutical sales managers can’t salvage their retaliation lawsuit against AbbVie because they again failed to show how they tried to prevent the drug maker from allegedly defrauding the federal government.
U.S. District Judge John Blakey issued an opinion Aug. 11 in the consolidated cases brought by seven former AbbVie employees who said the company violated the False Claims Act’s anti-retaliation provision. Blakey first granted AbbVie’s motion to dismiss all seven cases in February 2018. After plaintiffs filed two amended complaints, AbbVie again moved for dismissal in September 2018.
All seven plaintiffs said they managed teams that sold the hormone suppressant Lupron, which Medicare covers, and alleged their employer violated the terms of a 2012 five-year corporate integrity agreement with the Department of Health and Human Services Office of the Inspector General. The plaintiffs said AbbVie signed that deal to resolve “its criminal and civil liability arising from unlawful promotion of the prescription drug Depakote for uses not approved as safe and effective by the Food and Drug Administration.”
AbbVie violated the agreement’s terms, according to plaintiffs, by failing to provide special training for its sales force so they would know not to directly discuss pricing and profits with doctors, who could use a drug’s average sales price and public Medicare reimbursement rates to calculate margins. What the company did instead, according to plaintiffs, was implement a so-called “Challenger” sales model that explicitly required sales representatives to “be bold in discussing price and financials” with doctors.
In late 2016, according to the complaint, Tolmar — which makes Lupron’s primary market competitor — sent AbbVie a letter accusing it of illegal sales tactics. AbbVie then had its Office of Ethics and Compliance start investigating sales practices and any language that might violate the False Claim Act. During that process, the ethics office interviewed all seven plaintiffs. They say the information they provided in that process should be protected under the FCA, but instead AbbVie fired them.
As with the February 2018 dismissal, Blakey again said the allegations fall short because the complaint doesn’t explain how the plaintiffs engaged in activity protected by the FCA. He explained the U.S. Seventh Circuit Court of Appeals established a two-prong inquiry as to protected conduct: If an employee has a good-faith belief their employer is committing fraud, and that a reasonable employee in similar circumstances would have that same belief.
“Plaintiffs’ second amended complaints fail for the same reason that this court dismissed their original complaints,” Blakey wrote. “They fail to plead that they believed defendant defrauded the government, rather than violated contractual or other regulatory provisions.”
While Blakey said the complaint clearly spells out allegations AbbVie violated the corporate integrity agreement, he stipulated those claims fell short of alleging “a good-faith belief” AbbVie defrauded the federal government. The complaint had no allegations of any claims submitted to the government, he wrote, “much less fraudulent claims.”
In a response memo, the plaintiffs said they “believed… within the context of their interviews (AbbVie) was in jeopardy of violating the False Claims Act,” but Blakey said the complaint lacks any factual allegations to support that conclusion. Allegations of corporate culture or training failures leading to “working in the gray area between legal and illegal sales” fall short, Blakey wrote, because the FCA doesn’t address “gray areas.”
“Again, this court notes that Plaintiffs behaved laudably by voicing concerns about potential deficiencies,” Blakey wrote, “but the FCA’s anti-retaliation provision does not cover employees who merely ‘made an effort to stop a violation of some federal law’ or regulation, much less a violation that may fall somewhere ‘between legal and illegal sales.’ ”
Blakey also said the complaint fails to show how a reasonable employee in the plaintiffs’ position would've believed AbbVie committed fraud. He also said there is no way AbbVie could have engaged in the plaintiffs’ allegations of “marketing the spread” because the sales in question came after Congress did away with the use of average wholesale price as a factor in Medicare reimbursement.
Since the plaintiffs didn’t request leave to amend and replead any claims, he dismissed the complaint with prejudice, terminating the civil litigation.
Plaintiffs have been represented in the cases by attorneys Robert S. Oswald and Nicholas Woodfield, of The Employment Law Group, of Washington, D.C., and John P. Madden and Margaret M. O'Malley, of the firm of O'Malley & Madden, of Chicago.
Abbvie has been represented by attorneys James Hurst, Diana M. Watral and Jason A. Feld, of the firm of Kirkland & Ellis, of Chicago.