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United States ex rel. Suarez v. Abbvie, Inc.

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

September 30, 2019

UNITED STATES OF AMERICA ex rel. LAZARO SUAREZ, and on behalf of the STATE OF CALIFORNIA, et al., Plaintiff-Relator,
v.
ABBVIE INC. and ABBOTT LABORATORIES, Defendants.

          MEMORANDUM OPINION AND ORDER

          REBECCA R. PALLMEYER, UNITED STATES DISTRICT JUDGE

         Plaintiff-Relator Lazaro Suarez ("Relator"), a registered nurse, commenced this qui tam action under the False Claims Act (FCA), 31 U.S.C. §§ 3729-33, which establishes penalties for the submission of false claims for payment to federal health care programs. Under the FCA's qui tam provisions, relators-meaning private citizens acting as whistleblowers-are authorized to sue on behalf of the United States to recover damages for the submission of materially false claims. See 31 U.S.C. § 3730; Thulin v. Shopko Stores Operating Co., 771 F.3d 994, 998 (7th Cir. 2014). In this action, Relator alleges that Defendant AbbVie Inc., a pharmaceutical company with its principal place of business in Illinois, and its predecessor, Abbott Laboratories (collectively, "AbbVie"), paid kickbacks to doctors in the form of product support services for AbbVie's prescription drug Humira. AbbVie provided these support services through its "Ambassador Program", in which Relator was employed through a subcontractor. Relator alleges that the kickbacks require the conclusion that all resulting claims for government reimbursement of Humira prescriptions constitute false claims under the FCA. Relator asserts claims for violations of the FCA, § 3729(a)(1)(A), (B), (G), and conspiracy to violate the FCA, § 3729(a)(1)(C). In addition, he asserts claims for violations of analogous laws in 30 states and the District of Columbia.[1]

         Relator filed this lawsuit on October 8, 2015. He amended his complaint on February 12, 2018, to remove a claim arising under the California Insurance Frauds Prevention Act, Cal. Ins. Code § 1871 et seq. On March 13, 2018, the United States declined to intervene in the action. (See Notice [26].) So, too, did all thirty states and the District of Columbia. (See Order [28].) Thereafter, the court ordered Relator's complaint unsealed. (See id.) AbbVie has moved to dismiss Relator's amended complaint. For the following reasons, the motion is granted, but the court will allow Plaintiff leave to amend.

         BACKGROUND

         The following summary is taken from Relator's amended complaint, whose factual allegations the court accepts as true for present purposes. See United States ex rel. Berkowitz v. Automation Aids, Inc., 896 F.3d 834, 839 (7th Cir. 2018).

         Relator's FCA claims concern product support services that AbbVie offers in connection with its prescription drug Humira. Humira is an "injectable drug that treats various autoimmune diseases." (Am. Compl. [20] ¶ 2.) It was "the highest-grossing drug in the world in 2014." (Id. ¶ 3.)

         Relator holds a bachelor's degree in nursing and has been a registered nurse since 1996. (Id. ¶ 16.) From March 2013 to October 2014, he worked in South Florida as a "nurse educator" and "patient ambassador" for AbbVie's Ambassador Program: an "education and support program" for Humira patients. (Id. ¶¶ 8, 14-15, 19.) Although Relator was hired by an AbbVie sub-contractor-Quintiles Transactional Holdings, Inc.-he "reported to and worked with personnel at AbbVie, maintained an AbbVie email address, and worked exclusively in connection with . . . Humira." (Id. ¶¶ 14-15.)

         A. The Ambassador Program

         AbbVie's Ambassador Program is limited to patients for whom physicians have prescribed Humira, and whose prescriptions are for purposes that have been approved by the Food and Drug Administration. (Id. ¶¶ 40, 56.) "Ambassadors" are registered nurses who serve as representatives for AbbVie. (See Id. ¶ 53.) They "are primarily tasked with going into patients' homes to discuss the patients' disease states and their treatment with Humira," and "to work with patients directly to enable payment for the drug." (Id.) More specifically, Ambassadors train patients on obtaining insurance payment for the drug, self-injecting the drug, and disposing of injection equipment. (See Id. ¶ 65.) The "initial patient visit" usually takes "an average of one hour" but can take "as many as two-and-a-half" hours. (Id. ¶ 92.) Following the initial patient visit, "Ambassadors typically make two additional in-person visits" and thereafter contact patients by telephone. (Id. ¶¶ 101-02.)

         Relator alleges that Ambassadors spend approximately one third of an initial patient visit "making sure the patient has access to reimbursement or, as needed, free drugs." (Id. ¶ 92.) AbbVie, for example, instructs Ambassadors that "they can (and should) be on the phone when patients call [their insurers]" and that they "can (and should) encourage patients to initiate calls to learn about coverage." (Id. ¶ 104.) For "Government Payor patients," AbbVie requires Ambassadors "to contact Medicare to determine the patients' payment status: namely, how much the patient must pay in the first couple of months of treatment . . . and at what point the patient's coverage stops during the gap period before coverage resumes." (Id. ¶ 105.)[2] After obtaining this information, Ambassadors refer government payor patients to AbbVie's "Patient Assistance Foundation," which "has ample free supply to give patients during their . . . payment gap period." (Id. ¶ 107.) Relator alleges that he recalls hearing at an AbbVie national meeting that AbbVie provided 94, 000 free doses to government payor patients in 2013. (Id. ¶ 110.) Relator further alleges that "AbbVie management provides information about open enrollment periods for Medicare plans and requires Ambassadors to try to push their patients into plans that maximize reimbursement for Humira." (Id. ¶ 111.)

         Ambassadors also "visit, or communicate with, doctors' offices to respond to specific questions about specific patients, including if the patient has routed an administrative question to the doctor's office rather than to the Ambassador." (Id. ¶ 75.) And Ambassadors encourage "patients to enroll on the website 'MyHumira.'" (Id. ¶ 98.) According to Relator, AbbVie uses patient data collected on the website to "target the marketing of Humira" and "focus resources to have maximal return." (Id. ¶¶ 98-100.) Similarly, AbbVie identifies "high prescribers of injectable biologics" that "might benefit from receiving visits from Ambassadors" and sends Ambassadors to "tout[] [the program's] benefits to doctors and their staff." (Id. ¶ 71-72.) Relator alleges that he himself made "at least four such calls in August 2014 alone." (Id. ¶ 72.)

         According to Relator, AbbVie "launched [the Ambassador Program] around the time the sales curve for Humira appeared to be flattening." (Id. ¶ 52.) The program's true goal, Relator avers, is not patient education and support, but rather "ensur[ing] that patients start on and continue to take Humira." (Id. ¶ 8.) Initially, Ambassadors "focus[ed] on newer patients who may be wavering on whether to take the medicine, and/or for whom payment has not been set up." (Id. ¶ 61; see also Id. ¶ 89 (alleging that "in a material percentage of the time, the patient has not yet decided whether to fill the prescription, and thus Ambassadors highly influence the decision to take Humira in the first place"); id. ¶ 90 ("Patients frequently told Relator that they likely would not have started on Humira if he had not contacted them."); id. ¶¶ 58-60 (alleging that AbbVie "evaluates Ambassadors' performance on prescription-based metrics").) More recently, "AbbVie launched [a] 'low touch' program for patients who already have been taking Humira for longer periods." (Id. ¶ 61.) Presumably to ensure that the patients continue to do so, Ambassadors communicated with them by telephone. (Id.) Additionally, in or around fall 2014, AbbVie "piloted 'Operation Dakota'": a "program in which prospective Humira patients living in sparsely-populated areas have contact with Ambassadors by telephone or video." (Id.) By virtue of Operation Dakota, "no market is beyond the reach of the Ambassador Program." (Id.)

         The Ambassador Program "has been enormously successful." (Id. ¶ 9.) At annual meetings in 2013 and 2014, high-level AbbVie employees told Ambassadors "that until the [program] was initiated, sales of Humira had begun to plateau after its ninth year on the market." (Id. ¶ 133.) A graph displayed at one such meeting "compar[ed] where sales were before the program and where the sales had gone as a direct result" of the program, and "[t]he difference amounted to billions of dollars in sales." (Id. ¶ 134-35.) "As of May 2014," approximately 10, 000 Humira patients "were supported by an Ambassador." (Id. ¶ 131.)

         B. The Anti-Kickback Statute

         The Anti-Kickback Statute (AKS) prohibits soliciting, receiving, offering, or paying any "remuneration" in exchange for referring a patient for services that are reimbursed by a federal health care program, such as Medicare. 42 U.S.C. § 1320a-7b(b)(1), (2); see Am. Compl. ¶ 28. A claim that includes items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the False Claims Act. 42 U.S.C. § 1320a-7b(g); see Am. Compl. ¶ 33. In other words, when a claim is submitted to government health care programs such as Medicare and Medicaid, and "a kickback [was] involved in the underlying transaction," that claim is "false within the meaning of the federal False Claims Act and State analogs." (Am. Compl. ¶ 142.) To illustrate, when a health care provider submits a claim to Medicare, he or she must certify that the claim complies with all Medicare regulations, including the AKS. (Health Insurance Claim Form, Form CMS-1500, CENTERS FOR MEDICARE AND MEDICAID SERVICES (rev. Feb. 1, 2012) (https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/ CMS1500. pdf) (last visited Sept. 30, 2019).) Accordingly, receiving or providing kickbacks to influence referrals for Medicare patients would necessarily require a false statement in the certification form, resulting in an FCA violation. The AKS is aimed at protecting federal health care programs from "increased costs and abusive practices resulting from provider decisions that are based on self-interest rather than cost, quality of care or necessity of services." United States v. Patel, 778 F.3d 607, 612 (7th Cir. 2015) (internal quotation marks omitted).

         C. Alleged kickbacks

         Relator alleges that the Ambassador Program "consists of kickbacks to doctors in the form of free services and products." (Id. ¶ 137.) The kickbacks, Relator alleges, "caused the submission of false claims to federal and state health care programs." (Id. at IX; see Id. ¶¶ 138-154.)

         According to Relator, Humira "requires a great deal of non-billable [patient] support from the doctor and/or his or her office." (Id. ¶ 65.) Patients need training on obtaining insurance payments for Humira, self-injecting the drug, and discarding injection equipment. (Id.) Relator alleges that Ambassadors "take over these functions." (Id.) Similarly, doctors' offices receive administrative questions from patients concerning Humira. (See Id. ¶ 75.) Ambassadors step in and answer these questions. (See id.) By serving in these capacities, Relator alleges, Ambassadors "off-load[] the work of [doctors'] office[s], thus providing free and valuable services." (Id. ¶ 64.) Stated differently, AbbVie "offer[s] up their Ambassadors to perform general and time-consuming tasks that otherwise must be performed by doctors and their staff . . . ." (Id. ¶ 5.) "These extensive free services," Relator alleges, "are kickbacks." (Id.; see also Id. ¶ 53 ("Ambassadors assume several functions of the physicians and administrative functions of their office staff associated with Humira treatment, which offers tremendous value and time saving to physicians and incentivizes them to prescribe Humira").) Indeed, AbbVie's sales representatives "pitch Ambassadors to doctors as free 'extensions of your office.'" (Id. ¶¶ 5, 69; see also Id. ¶ 68 (alleging Humira sales representatives tell doctors that Ambassadors will "take that [patient] call," "take that [patient's] insurance question," "take your concerns about [calls to the office, dealing with billing, disposal] off the table").) Relator alleges that "the collective value" of Ambassadors' "nursing visits" and other services "is enormous." (Id. ¶ 132.) And he alleges that the Ambassadors' services influence doctors' decisions to prescribe Humira, including by "reliev[ing] the initial barrier to the sale." (Id. ¶¶ 64-65; see also Id. ¶ 65 (alleging that "[b]efore the Ambassador Program, many physicians were disinclined to prescribe Humira" because it is "very expensive" and "requires a great deal of non-billable support from the doctor and/or his or her office," including the types of training the Ambassadors have stepped in to provide); id. ¶ 53 (alleging that Ambassadors' valuable and "time-saving" services "incentivize[] [doctors] to prescribe Humira).)

         Separately, Relator alleges that the free drugs provided by AbbVie's Patient Assistance Foundation constitute kickbacks. (See Id. ¶ 7.) Relator also alleges that Ambassadors provide free materials to doctors' offices-including "Humira travel kits", "Talking Training Pens"[3], preprinted insurance benefit forms (such as prior authorization forms), [4] and "dedicated Humira terminals" that "print benefit verification forms and other insurance-related documents"-and that these materials, too, constitute kickbacks. (Id. ¶¶ 73-74.)

         Relator provides information concerning several physicians who have allegedly reaped the benefits of the Ambassador Program. Relator, for example, attended a meeting at Dr. Robert Sarro's office, where Dr. Sarro and his assistant were "persuaded that the Ambassador Program would 'make their lives easier.'" (Id. ¶ 76.) Dr. Avelino A. Guiribitey "responded positively to the" pitch that Ambassadors would serve as "extension[s] of [his] office" and "opted to prescribe Humira as a result of the Ambassador Program." (See Id. ¶¶ 69-70.) Furthermore, "some doctors, especially in the competitive South Florida dermatology market for wealthy older patients," have "brag[ged] about the program and impl[ied] it was a service the doctor[s] had arranged for [their] own patients." (Id. ¶ 81.) Hollywood Dermatology falls into this category and "[o]ne high-prescribing doctor in that practice was Dr. Eduardo Weiss." (Id.) "Other examples of high-prescribing dermatologists who actively have touted the Ambassador Program, and [have] worked especially closely with Ambassadors," include Dr. Francisco Kerdel-an "affiliate of among the highest prescribing" dermatology offices in South Florida-Dr. Tory Sullivan, Dr. Weiss, and Dr. Alejandro Pedrozo. (Id. ¶ 82; see also Id. ¶ 70 (identifying Dr. Pedrozo as a doctor to whom sales representatives pitched the Ambassador Program and alleging that he "dramatically increased" his Humira prescriptions after the pitch); id. ¶ 78 (alleging that Ambassadors "influenced [the] prescribing behavior" of Dr. Jerome R. Obed and Dr. Varee N. Poochareon by pitching the program to them at "speaker dinners").)

         Finally, Relator alleges that AbbVie has taken active measures to conceal the true nature of the Ambassador Program, and that such conduct "demonstrates AbbVie's reckless or knowing misconduct." (Id. ¶ 125.) Specifically, AbbVie "warn[s] Ambassadors not to formally record all the time they spend with doctors" (id. ¶ 77); trains Ambassadors to avoid referring to themselves as healthcare providers and to their patients as patients (id. ¶ 86-87); instructs Ambassadors "not to refer specifically to Humira in writing up patient visits, despite the fact that Humira is the only reason for their presence in the patient's home" (id. ¶ 119); and tells Ambassadors that "if they have a question about what they can permissibly do in the course of their patient interactions," they should call a supervisor rather than put the question in writing (Id. ¶ 120). AbbVie has also changed the way it describes Ambassadors; it emphasizes the educational services that Ambassadors provide while downplaying Ambassadors' role in giving medical advice, doing clinical work, and building the Humira brand. (See Id. ¶¶ 54-55.)

         D. Relator's claims

         Relator asserts claims against AbbVie and Abbott for knowingly presenting and causing to be presented to the federal government false or fraudulent claims for payment in violation of the False Claims Act, 31 U.S.C. § 3729(a)(1)(A) (Count I); knowingly making, using, or causing to be made or used, false or fraudulent records or statements material to the payment of false or fraudulent claims, thereby causing false or fraudulent claims for payment to be paid or approved, in violation of § 3729(a)(1)(B) (Count II); knowingly conspiring with each other; Relator's employer, Quintiles; doctors; and other medical professionals to utilize the Ambassador Program in violation of § 3729(a)(1)(A) and (B), which itself violates § 3729(a)(1)(C) (Count III); and violating analogous laws in 30 states and the District of Columbia (Counts V through XXXVI). Relator also asserts a "reverse False Claims Act" claim against AbbVie (but not Abbott)-that is, a claim for knowingly concealing, avoiding, or decreasing an obligation to pay money to the government, in violation of § 3729(a)(1)(G) (Count IV).

         LEGAL STANDARD

         A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint. Fed.R.Civ.P. 12(b)(6); see Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014). In construing the complaint, the court accepts all well-pleaded facts as true and draws all reasonable inferences in Relator's favor. Berkowitz, 896 F.3d at 839. To survive a motion to dismiss, the complaint must contain sufficient factual information to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has facial plausibility when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." (Id.)

         Relator's claims arise under the FCA, an anti-fraud statute. Accordingly, the heightened pleading requirements of Federal Rule of Civil Procedure 9(b) apply. See Berkowitz, 896 F.3d at 839. Under Rule 9(b), complaints alleging fraud must be pleaded with particularity. This means that a "plaintiff must describe the 'who, what, when, where, and how' of the fraud-'the first paragraph of any newspaper story.'" Id. (quoting United States ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849, 853 (7th Cir. 2009)). "What constitutes 'particularity' . . . may depend on the facts of a given case." Berkowitz, 896 F.3d at 839. But a plaintiff must "use some . . . means of injecting precision and some measure of substantiation into their allegations of fraud." Id. at 840 (quoting United States ex rel. Presser v. Acacia Mental Health Clinic, LLC, 836 F.3d 770, 776 (7th Cir. 2016)). "The heightened pleading requirement ...


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