Justia Government Contracts Opinion Summaries

Townsend worked as an Arkansas pharmaceutical sales representative for Bayer, selling Mirena, a contraceptive device. Townsend visited physicians, including Dr. Shrum. Townsend learned Shrum was importing from Canada a version of Mirena that was not FDA-approved, at half the cost of the approved version. Shrum had submitted Medicaid claims at the same rate as the approved version and bragged about $50,000 in extra profit. Townsend sought guidance from his superiors. Bayer told Townsend not get involved. Townsend called the Medicaid Fraud Hotline, although he feared losing his job. Shrum was charged with Medicaid fraud. Meanwhile, Bayer changed its method of reimbursing sales expenses. Not understanding the change, Townsend’s wife spent funds intended for those expenses, causing Townsend’s account to be closed temporarily. Although Townsend's account had been reactivated, Bayer fired him, claiming his closed account prevented him doing his job. Townsend sued, citing anti-retaliation provisions of the False Claims Act, 31 U.S.C. 3730(h).). A jury awarded Townsend back pay, doubled to $642,746, and $568,000 in emotional distress damages. The court denied front pay and ordered Bayer to reinstate Townsend. The Eighth Circuit affirmed on all issues except the emotional distress damage award and remanded to allow Townsend the option of accepting a remittitur of $300,000, or a new trial on emotional distress damages. View "Townsend v. Bayer HealthCare Pharm. Inc." on Justia Law

Schumann, as a qui tam relator under the False Claims Act (FCA), 31 U.S.C. 3729, and corresponding state laws, alleged that the drug company defendants improperly induced Medco Health, his employer, to offer certain of defendants’ drugs in its mail-order pharmacies and in health plans it managed; did not include those inducements when calculating the best price for their drugs, and thus submitted inaccurate best price reports to the government; overcharged the government based on those inaccurate best prices; and underpaid rebates owed based on those inaccurate best prices. The district court dismissed, holding that it lacked subject matter jurisdiction over Schumann’s claims because he did not have the requisite direct and independent knowledge to satisfy the original source exception to the FCA’s public disclosure bar. The Third Circuit affirmed. Schumann’s knowledge was not direct because it came from reviewing documents and discussing them with colleagues who participated in the underlying events. View "Schumann v. Astrazeneca Pharm., L.P." on Justia Law

Plaintiff alleged that Bayer defrauded the United States government through its marketing and sale of the cholesterol-lowering drug Baycol. On appeal, plaintiff challenged the dismissal of the qui tam action she brought against Bayer Healthcare under the False Claims Act (FCA), 31 U.S.C. 3729-3733. Based upon the court's review of plaintiff's allegations regarding the Department of Defense (DoD) contracts, the court concluded that her complaint satisfied Rule 9(b)'s requirements and survived a motion to dismiss under Rule 12(b)(6). Accordingly, the court reversed the district court's judgment with regard to her allegations regarding the DoD contracts and remanded for further proceedings. However, the court affirmed the district court's judgment with respect to the allegations involving federal health insurance reimbursement claims under United States v. ex rel. Roop v. Hypoguard USA, Inc.View "Simpson v. Bayer Healthcare, et al." on Justia Law

Zizic is the former CEO of BioniCare, which sold the BIO-1000, a medical device designed to treat osteoarthritis of the knee. BioniCare attempted to bill Medicare for the BIO-1000, but many claims were denied as not medically necessary. Q2A contracted with the government to review such claim denials across the nation. Q2A’s denials were reached without physician review, which is required by the Medicare Act, 42 U.S.C. 1395, HHS regulations, and its contract. A former Q2A employee testified that it implemented an internal policy to deny all BIO-1000 claims, which were reviewed by a single nurse rather than a panel of physicians; later allowed non-physician subcontractors to prepare BIO-1000 appeals for review by a single physician; and finally developed a mail merge letter that automatically denied BIO-1000 claims without any review. BioniCare’s trustee in bankruptcy became aware of and disclosed these practices. Zizic filed a qui tam suit under the False Claims Act, 31 U.S.C. 3729-33. The district court dismissed, concluding that it lacked jurisdiction because the allegations against Q2A and RTS were based on prior public disclosures and because Zizic was not an original source of that information. The Third Circuit affirmed.View "Zizic v. Q2Adm'rs LLC" on Justia Law