United States District Court, N.D. Illinois, Eastern Division
UNITED STATES OF AMERICA ex rel. LAZARO SUAREZ, and on behalf of the STATE OF CALIFORNIA, et al., Plaintiff-Relator,
ABBVIE INC. and ABBOTT LABORATORIES, Defendants.
MEMORANDUM OPINION AND ORDER
REBECCA R. PALLMEYER, UNITED STATES DISTRICT JUDGE
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.
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 .) So, too, did all thirty states
and the District of Columbia. (See Order .)
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.
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).
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.  ¶ 2.) It was
"the highest-grossing drug in the world in 2014."
(Id. ¶ 3.)
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.)
The Ambassador Program
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.
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.) 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. ¶
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.)
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."
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.)
The Anti-Kickback Statute
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)
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).
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.)
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).)
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", preprinted insurance benefit forms (such
as prior authorization forms),  and "dedicated Humira
terminals" that "print benefit verification forms
and other insurance-related documents"-and that these
materials, too, constitute kickbacks. (Id.
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
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.)
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).
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
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 ...