Sidley has one of the most active healthcare and life sciences enforcement practices in the world. We have extensive experience representing numerous clients in the life sciences and healthcare industries in investigations and litigation under the federal FCA and its state-level counterparts. Sidley has handled more than 150 civil fraud qui tam cases and dozens of criminal investigations in this arena. Our clients include major manufacturers of drugs, devices, and biotech products, as well as healthcare providers and commercial clinical laboratories.
A substantial majority of FCA recoveries over the past two decades have arisen from the life sciences and healthcare industries. That focus is likely to continue into the foreseeable future. As Medicare and Medicaid remain among the largest government programs in the country, rooting out potential fraud in these programs remains a top priority of federal and state enforcement officials.
The life sciences and healthcare industries have also proven to be fertile ground for qui tam relators, many of whom pursue FCA litigations even if the federal and state governments decline to intervene in the case. In addition, citizens who bring qui tam actions—particularly those formerly affiliated with a pharmaceutical or device manufacturer or a healthcare provider—also commonly assert personal claims under the federal and state FCA, alleging that they have been retaliated against for whistleblowing activities. Our litigators have extensive experience defending all manner of claims under the FCAs, whether asserted by the federal government, a state, a municipality, or by private qui tam plaintiffs.
Our broad range of experiences, specialized knowledge of the federal regulatory framework governing Medicare and Medicaid reimbursement and rebates, and integrated team of healthcare, white collar, and fraud and abuse lawyers enable us to provide the highest quality legal representation in an efficient, cost-effective manner.
Our practice is distinguished by several features, including:
- Our healthcare litigators are specialists in healthcare law and have deep industry and legal knowledge, as well as substantial clinical experience. Our healthcare litigators work hand-in-glove with our lawyers from related disciplines, notably our healthcare and FDA regulatory team, which is one of the most experienced teams of reimbursement and fraud and abuse counselors. Our healthcare litigators also collaborate, as appropriate, with our seasoned team of white collar trial lawyers, many of whom also have extensive healthcare experience.
- Sidley’s team also includes many former federal government officials with extensive healthcare enforcement experience.
- We have assisted clients in advancing novel defense theories, applying established law in new ways, and devising creative resolutions to matters large and small, many of which were the first of their kind. We handled, for example, a number of firsts in the pharmaceutical industry – the first federal/multistate settlement, the first Corporate Integrity Agreement, and the first compliance-related consent decree.
- We have a deep understanding of the provisions of the federal FCA that affect our clients most, including the “presented” and “cause to be presented” clauses, as well as ABN (Advance Beneficiary Notice of Noncoverage) and other technical federal program requirements.
- Our healthcare enforcement lawyers are the authors of “Health Care Fraud – Enforcement and Compliance,” the leading text on healthcare fraud.
- We also maintain an industry-leading blog on FCA developments, “Original Source: The Sidley Austin False Claims Act Blog,” which enables our lawyers, clients, and friends to remain current on all key developments in this arena.
- Sidley was honored “Government Investigation (False Claims Act) Firm of the Year” at the inaugural Legal Media Group Life Sciences Awards in 2013. Recipients of these awards are “subject to stringent peer review and editorial discretion” and have participated in “case matters that have made headlines with regards to legal precedent and/or other notable factors that have remained at the forefront of conversation in both the United States and Canada.”
- Many of our lawyers have been individually recognized in Chambers USA, LMG Life Sciences and other reliable guides.
Selected Recent Representations
We have represented clients—and obtained favorable results—in all stages of FCA investigations and litigation, on a broad range of allegations and issues. Although many of our engagements are highly sensitive or non-public, representative examples of our work follow below.
Pharmaceutical and Device Manufacturers
- United States ex rel. Schumann v. AstraZeneca Pharmaceuticals L.P., 769 F.3d 837 (3d Cir. 2014) (affirming dismissal of qui tam relator’s allegations of fraud relating to manufacturer’s best price calculations for Medicare Drug Rebate Program as prohibited by the FCA’s public disclosure bar).
- United States ex rel. Streck v. Allergan, Inc., et al., 894 F. Supp. 2d (E.D. Pa. 2012) (dismissing qui tam relator’s claims against firm clients Allergan, Novo Nordisk, and Sunovian, as well as other manufacturers, which alleged that the manufacturers had failed accurately to report their average manufacturer prices to Medicaid Drug Rebate Program, on the grounds that relator’s allegations failed to state an FCA violation).
- United States ex rel. Bartz v. Ortho-McNeil Pharmaceutical, Inc., 856 F. Supp. 2d 253 (D. Mass. 2012) (dismissing qui tam relator’s claims against firm client Johnson & Johnson, which alleged fraud in reporting of average manufacturer prices and best prices under Medicaid Drug Rebate Program, as prohibited by the FCA’s public disclosure bar).
- In re Pharmaceutical Industry Average Wholesale Price Litigation, 685 F. Supp. 2d 186 (D. Mass. 2010) (dismissing qui tam relator’s allegations of price reporting fraud against firm client Johnson & Johnson and other manufacturers).
- United States ex rel. Lisitza v. Johnson & Johnson, 765 F Supp. 2d 112 (D. Mass. 2011) (dismissing qui tam relator’s claims alleging that manufacturer violated the FCA and Anti-Kickback Statute in reporting its best price to Medicare Drug Rebate Program). Although the federal government had initially stated that it would intervene in this case, it decided not to do so after a presentation by Sidley. The matter subsequently was dismissed in its entirety.
- United States ex rel. Kennedy v. Aventis Pharmaceuticals, Inc., 2008 WL 5211021 (N.D. Ill. Dec. 10, 2008) (dismissing qui tam relators’ claims under FCA and Illinois law and rejecting relators’ novel materiality theory in case involving kickbacks for formulary status and off-label promotion).
- Represented GE Healthcare in a civil investigation relating to its pricing and promotion of Myoview, including allegations of kickbacks to HCPs. Sidley achieved a favorable settlement in 2011—without the imposition of a Corporate Integrity Agreement.
- Represented Genentech in a seven-year criminal and civil federal investigation alleging unlawful promotion of Rituxan, including allegations of kickbacks to HCPs. In 2008, the criminal investigation was dropped, and in 2009, the government declined to intervene in the pending FCA case. The qui tam relator proceeded with the lawsuit which was resolved in 2011 by way of a very favorable settlement.
- Represented Novo Nordisk in a civil investigation alleging improper promotion of NovoSeven, including allegations of kickbacks to HCPs. Sidley achieved a favorable settlement in 2011.
- Represented Eli Lilly and Company in connection with a federal criminal and civil investigation led by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, a multi-state Medicaid investigation, a multi-state consumer protection investigation and miscellaneous other actions relating to the company’s promotion of its blockbuster drug Zyprexa®. This matter was globally resolved in stages during 2008 and 2009 with a plea agreement, a civil and a Corporate Integrity Agreement.
- Achieved dismissal for a major pharmaceutical company of qui tam claims based on off-label promotion and kickback allegations. We limited remaining claims in the nationwide suit to just five hospitals in one city, narrowed the scope of potential damages, and helped our client avoid hundreds of millions of dollars of potential nationwide exposure under the FCA. This set an important precedent in the industry that is now used in other ongoing cases.
Institutional Healthcare Providers and Physicians
- Represented the Regents of the University of California in the largest and longest-running investigation of outlier reimbursement issues ever undertaken by the Department of Justice, including issues related to clinical diagnostic testing issues and charges. This investigation followed more than a dozen major settlements involving other academic medical centers and large hospitals and health systems, and resulted in our client resolving the matter without any payment being made.
- Achieved favorable resolution of a government investigation and FCA suit, as well as dismissal of another FCA suit, for hospital-based healthcare client.
- Represented two national for-profit long-term care companies, several rehabilitation companies, and the nation’s largest for-profit provider of psychiatric services in connection with numerous criminal and civil investigations related to alleged kickbacks, billing fraud and quality of care issues.
- Represented one of the largest academic medical systems in the country in a high profile Anti-Kickback Statute and billing fraud investigation, which was conducted by the HHS Office of Inspector General and the Department of Justice, where the government asserted a billion dollar claim. After a three-year investigation, the matter was closed by the government without any settlement or other concession by the client.
Clinical Laboratories
- United States v. Quest Diagnostics Incorporated, 734 F.3d 154 (2d Cir. 2013) (affirming dismissal of qui tam action involving kickback allegations where former in-house counsel was one of the relators). The government declined to intervene in the case.
- Michigan v. Quest Diagnostics Inc, Case No. 08-000330-CZ (2014) (granting summary disposition on fraud claims concerning Medicaid pricing brought by Michigan Attorney General).
- Florida v. Quest Diagnostics Inc, (2016) (granting summary disposition on fraud claims concerning Medicaid pricing brought by Florida Attorney General).
Pharmacies
- Represented Walgreens in a qui tam suit alleging improper mailing of “time-sensitive” medications to Medicaid beneficiaries.
- Represented Walgreens in a qui tam suit involving allegations that Walgreens and other pharmacies dispensed drugs that did not comply with certain package safety requirements.
- Representing a major pharmacy chain in a DOJ/HHS investigation regarding compliance with Medicaid automatic refill prohibitions and kickback allegations regarding its pharmacy rewards program.