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United States ex rel. Keen v. Teva Pharmaceuticals USA, Inc.

United States District Court, N.D. Illinois, Eastern Division

January 4, 2017

UNITED STATES EX REL. JANICE KEEN, Plaintiff and Relator,
v.
TEVA PHARMACEUTICALS USA INC., TEVA PHARMACEUTICAL INDUSTRIES LTD., CEPHALON, INC., AND TEVA SALES AND MARKETING, INC., Defendants.

          MEMORANDUM OPINION AND ORDER

          HON. JORGE L. ALONSO United States District Judge

         Relator, Janice Keen, brings this case on behalf of the United States under the False Claims Act, 31 U.S.C. §§ 3729 et seq., against her employer, defendant Teva Pharmaceuticals USA, Inc., and other associated business entities (collectively, “defendants” or “Teva”). Defendants move to dismiss. For the following reasons, the motion is granted.

         BACKGROUND

         In 2005, relator began working for defendant Cephalon, Inc. (“Cephalon”) as a pharmaceutical sales representative. Teva subsequently acquired Cephalon as a wholly-owned subsidiary in 2011.

         As a sales representative for Cephalon and then Teva, relator participated in promoting, marketing, and selling Amrix, a prescription medicine used to treat muscle spasms. Relator alleges in her complaint that after Teva acquired Cephalon, it began to train its sales force to market Amrix in a deliberately misleading way by emphasizing visual aids and a simple “core message”-“Amrix is the only once-daily extended release cyclobenzaprine”-without devoting sufficient attention to details critical to ensuring safe and effective use of Amrix.

         In particular, relator alleges that Teva marketed Amrix “off-label, ” or for use in a manner for which it had not received regulatory approval. Relator contends that Teva's marketing tactics were misleading in four ways.

         First, she alleges that Teva misleadingly promoted Amrix as not merely an “adjunct” to rest and physical therapy but as a treatment that was sufficient by itself to stop muscle spasms. Teva's promotional materials contained pictures of people engaged in strenuous activities, as if Amrix alone had enabled them to participate in those activities, and Teva instructed its salespeople to emphasize these visual aids in promoting Amrix. Additionally, it instructed salespeople to give iPad presentations, which allowed them to breeze through safety information that was difficult to see on the small iPad screens.

         Second, relator alleges that Teva promoted Amrix beyond its approved use to treat “acute” cases on a short-term basis, i.e., for periods of two to three weeks, by distributing co-pay coupons that patients most often used to obtain thirty doses of Amrix, or a month's supply. Additionally, Teva promoted Amrix to physicians who worked in pain clinics and predominantly treated patients with chronic pain, without warning these physicians that Amrix was approved for short-term use in acute, not chronic, cases.

         Third, relator alleges that Teva misleadingly overstated the efficacy of Amrix by promoting it as a treatment that will allow patients to get back to their everyday activities, when in fact Amrix had not been shown to significantly expand the range of activities patients could engage in.

         Fourth, relator alleges that Teva omitted from its promotion of Amrix the “fourth arm” of the Amrix study, which dealt with daytime drowsiness. Teva trained its sales force to use as a selling point the fact that fewer patients treated with Amrix reported extreme drowsiness than patients treated with generic, immediate-release cyclobenzaprine. However, the difference is only a few percentage points; 17-19% of Amrix patients reported extreme drowsiness, whereas 24% of generic cyclobenzaprine patients did. Relator alleges that Teva's sales presentations should have used the actual figures of the fourth arm of the Amrix study, rather than misleadingly citing facts without providing the proper context for understanding them.

         Relator's amended complaint consists of four counts. In Count I, relator claims that Teva violated the False Claims Act, 31 U.S.C. § 3729(a)(1)(A) and (B), by knowingly causing physicians to prescribe Amrix in situations for which it was not approved for use, with the effect that pharmacies submitted false claims to United States government health care programs, such as Medicare and Medicaid, seeking payment for filling Amrix prescriptions.

         In Count II, relator alleges that Teva's off-label marketing violated the terms of a Corporate Integrity Agreement (“CIA”) that Cephalon entered into with the Office of Inspector General (“OIG”) of the Department of Health and Human Services. The CIA required Teva to report and correct any “probable violation[s] of criminal, civil, or administrative laws applicable to any federal health care program and/or applicable to any FDA requirements relating to the promotion of Cephalon products, ” and it set out stipulated penalties for any breach. (Am. Compl. at ¶ 24, ECF No. 22.) Relator claims that Teva is liable under 31 U.S.C. § 3729(a)(1)(G) for failing to pay the stipulated penalties it owes under the CIA.

         In Counts III and IV, relator makes similar claims under the Illinois and Indiana ...


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