The United States Supreme Court is considering hearing an appeal of the dismissal of a False Claims Act case. Noel Nathan was a sales manager employed by Takeda Pharmaceuticals. He claimed his employer was committing Medicare fraud by overprescribing prescription antacids. A federal judge in Virginia dismissed his complaint saying that Nathan did not plead enough specific facts in his complaint. The case is important because many whistleblowers don’t have access to all the facts surrounding the fraud.
Nathan claims that Takeda was billing Medicare for drugs that were being used for off label purposes. Although doctors can sometimes use drugs to treat conditions not approved by the Food and Drug Administration, those experimental or “off label” uses are not reimbursable by Medicare and many private insurance programs.
Takeda manufactures a drug called Kapidex. 30mg doses of Kapidex are approved for the treatment of common acid reflux disease (GERD). The FDA approved a higher 60mg dose for the less common and more serious erosive esophagitis. Nathan claims that Takeda only provided doctors with the 60mg samples thereby suggesting it was the only dose available. Frequently physicians would then prescribe the 60 mg dose for GERD even though it was not approved for that purpose.
Nathan’s complaint presented some thorny issues for the trial court. Takeda didn’t prescribe the drugs although it certainly benefited when doctors mistakenly prescribed the incorrect higher dosage. Takeda makes more money from Medicare when the higher dose is prescribed.
The trial court allowed Nathan to amend his complaint twice before ultimately dismissing the case. On appeal to the 4th Court of Appeals a 3 judge panel agreed with the dismissal. Now the case is on appeal to the U.S. Supreme Court which is weighing whether or not to hear the case. Prior to making its decision on whether or not to even consider the case, the Supreme Court has asked the U.S. Solicitor General for input.
The issue on appeal is how much specificity must be alleged before a complaint can go forward. As a sales manager, Nathan presumably knows how much Kapidex is being dispensed and in what doses. Because physicians are only given 60 mg doses, most presumably don’t know that a 30 mg dose is available to treat GERD. While Nathan probably knows that the drug is being misused, the trial court said he must be able to connect the dots by alleging actual patients being wrongfully prescribed the medication.
Like many whistleblowers, Nathan knows that a fraud is happening but doesn’t have access to the facts. In other words is circumstantial evidence enough to begin a false claims act case investigation? Unfortunately, the court said no.
Nathan claims that a whistleblower need only allege the existence of a fraudulent scheme that supports the inference that false claims were presented to the government for payment. The court ruled, however, that the whistleblower must detail actual identifiable false claims were presented to the government for payment.
Medicare fraud is a huge problem costing taxpayers billions annually. In many healthcare fraud cases, whistleblowers can detail the “who, what, when and where.” Some cases, however, like that presented by Noel Nathan are much more complex.
This is a case we are following closely.
Under the federal false claims act, whistleblowers who have original source information about a fraud involving a federally funded program are eligible to receive a percentage of whatever the government collects from those committing the fraud. The usual award is 20%.
If you want to become a whistleblower and think you qualify, give us a call. Our team of whistleblower attorneys help ordinary citizens become heroes and collect the maximum award for their efforts.
Want more information? Contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney client privilege.
Post by Brian Mahany