CA1: disclosure to the government is not disclosure for qui tam purposes

US v. Pfizer, Inc., No. 06-2627.  This is a whistleblower action against Pfizer, Inc. and its subsidiary Pharmacia Corporation under the federal False Claims Act ("FCA"), 31 U.S.C. § 3729 et seq., and state law regarding a kind of growth hormone.  It was brought by a doctor, so it is per se not frivolous, right? Ah, but the whistle-blowing doctor accused Pfizer (or rather a company that Pfizer bought) of funneling improper payments to other doctors for proscribing the drug.  Pfizer, for its part seems to have tried to have come clean, and eventually disclosed some bad activity and agreed to plead guilty to criminal charges in 2007, five years after this suit was commenced (it was filed under seal.)

Anyway, the suit itself alleges that Pharmacia knowingly caused the submission of fraudulent claims by others to the government in the form of claims for reimbursement for off-label prescriptions of the drug.  See, that is the False Claim.  Not by the company acquired company, but by the doctors.

Pfizer argues that is communications with the government (to HHS and DOJ) were “public disclosures” and therefore are subject to a jurisdictional bar of 31 U.S.C. § 3730(e)(4)(A), and relator wasn’t an original source.  The first disagrees, and holds that “’public disclosure’ requires that there be some act of disclosure to the public outside of the government.”  The First uses this choice sentence, “Government may be of the people, by the people, and for the people, but that does not mean the government and the public are the same.”  I couldn’t agree more.  (There is also some analysis of the structure and history of the statute, and the First acknowledges that it is splitting with the Seventh.)

But, the defendant loses in part on an FRCP 9(b) issue, and the court holds “At most, Rost raises facts that suggest fraud was possible; but the complaint contained no factual or statistical evidence to strengthen the inference of fraud beyond possibility.”  However, the First also holds that the District Court should have ruled upon a request to amend the complaint to plead with particularity, and says that Pfizer is wrong that a “passing reference” is not a request.  Decisionism comments here.  Pharmalot provides a lot of background here.  The winner comments here.  FDAlaw blog comments here.