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United States ex rel. Lampkin v. Johnson & Johnson, Inc.

United States District Court, Third Circuit

May 31, 2013

UNITED STATES OF AMERICA, et al., ex rel. HOLLY LAMPKIN, Plaintiffs,


JOEL A. PISANO, District Judge.

This is a qui tam action brought by Plaintiff-Relator Holly Lampkin ("Plaintiff" or "Relator") against Defendants Alcon, Inc. and Alcon Laboratories, Inc. (collectively, "Defendants").[1] Plaintiff alleges that Defendants violated the False Claims Act, 31 U.S.C. § 3729 et seq. ("FCA") by promoting an ocular antibiotic to doctors for uses not approved by the FDA and by paying doctors kickbacks to induce them to issue prescriptions that were paid for by government healthcare programs. Presently before the Court is Defendants' Motion to Dismiss the First Amended Complaint pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6). Plaintiff opposes the Motion to Dismiss and has filed a Cross-Motion to Amend. The Court decides these matters without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth below, the Motion to Dismiss shall be granted and the Cross-Motion to Amend shall be denied.

I. Background

A. Plaintiff's Complaint

The following allegations are summarized from the Complaint, [2] and must be taken as true in deciding this Motion to Dismiss. Defendants are pharmaceutical companies that market and sell a drug called Vigamox, an ocular antibiotic, throughout the United States. Plaintiff-Relator Holly Lampkin was employed by Johnson & Johnson, Inc. ("J&J") - one of Defendants' competitors - as a pharmaceutical sales representative from 2001 to 2008. Plaintiff alleges that during her time as a sales representative at J&J, she became aware that Defendants regularly engaged in the practice of illegally marketing Vigamox for off-label uses.

Plaintiff alleges that Vigamox is FDA-approved for the treatment of conjunctivitis only but Defendants knowingly promote the sale and use of Vigamox nationwide for use as a prophylactic antibiotic, in violation of the Food, Drug and Cosmetics Act, 21 U.S.C. § 331(a); 21 U.S.C. § 352(f). Plaintiff claims that Defendants engage in such off-label promotion because it is very profitable. In fact, she claims that 99% of the sales of Vigamox (and other drugs in its class) on the "national market" are for off-label uses. Plaintiff further alleges that the vast majority of the off-label uses of Vigamox are not medically necessary. She contends that fraudulent claims are submitted to federal and state Medicaid programs, seeking reimbursement for the use of Vigamox for off-label, medically unnecessary purposes.

Plaintiff further alleges that Defendants violated the Federal Anti-Kickback Act, 42 U.S.C. § 1320a-7b(b)(1) and (2) by paying kickbacks to doctors nationwide to induce them to prescribe Defendants' products. In particular, Plaintiff asserts that Defendants regularly provide physicians with free surgical kits and sell surgical equipment to them at a discounted rate to encourage them to write prescriptions for Vigamox. Plaintiff alleges that reimbursement claims for these drugs are then submitted to government healthcare programs, in violation of these programs' payment conditions, which require doctors' compliance with the Anti-Kickback Act.

B. Defendants' Motion to Dismiss

Defendants move to dismiss Plaintiff's Complaint on three grounds. First, they argue that Plaintiff fails to plead fraud with the particularity, as required by Fed.R.Civ.P. 9(b). Specifically, they contend that the Complaint does not provide any details regarding when or where the fraudulent behavior purportedly occurred and fails to identify specific employees of Defendants that engaged in the fraud. They further assert that Plaintiff does not provide adequate detail regarding the allegedly fraudulent claims that were submitted to the government.

Next, Defendants argue that Plaintiff's allegations fail to state a claim under Fed.R.Civ.P. 12(b)(6). They contend that the Complaint does not demonstrate that any claims submitted to government healthcare programs were actually false or fraudulent. That is, Plaintiff does not allege that the claims were in fact for a drug other than Vigamox or were prescribed for a reason other than what was stated on the claim. Nor does Plaintiff allege that Defendants made any false or misleading statements to health care professionals, which caused them to prescribe the drug for an off-label use. In addition, Defendants argue that Plaintiff cannot state a claim for conspiracy because she has not alleged any facts regarding the purported agreement to commit fraud.

Finally, Defendant Alcon, Inc. also seeks to dismiss the Complaint under Fed.R.Civ.P. 12(b)(5), arguing that it was not properly served with the Summons and Complaint. In particular, Alcon, Inc. contends that Plaintiff attempted to serve Alcon, Inc. through an entity called CT Corporation, but CT Corporation was never authorized to accept service on behalf of Alcon, Inc, a Swiss corporation.

C. Plaintiff's Cross-Motion to Amend

Plaintiff opposes the Motion to Dismiss and seeks leave to amend the Complaint. She argues that the Complaint adequately states a claim against Defendants, but to the extent it does not, the Second Amended Complaint ("SAC") - which is attached to her Motion - cures any purported pleading deficiencies. In particular, the SAC provides additional information regarding specific doctors that prescribed Vigamox for off-label uses and the claims that were submitted to the government based on such prescriptions. It also contains information regarding the surgical kits and donations that Defendants purportedly provided to doctors as kickbacks.

Plaintiff also requests that she be permitted to substitute Novartis AG (the successor-ininterest to Alcon, Inc.) for Alcon, Inc. in the ...

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