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Few things in the law are as subject to abuse as the False Claims Act, 31 USC section 3729 et seq.  (the FCA). It was originally enacted to stop massive frauds perpetrated by large contractors during the Civil War. Now it is a litigation cottage industry. 

In United States ex rel. Bennett v. Bayer Corp., 2024 U.S. Dist. LEXIS 63654 (D.N.J. April 4, 2024), the relator alleged that two defendant pharmaceutical companies violated the FCA by misleading the federal government to get approval to sell fluoroquinolone antibiotics (FQs), resulting in doctors prescribing the FQs and seeking fraudulently-induced reimbursements from federal and state healthcare payors.  To our defense-hack eyes, this action smacks of a claim of  fraud on the FDA, which we think is not an issue for courts but, rather, the FDA.  We normally see courts use preemption to swat away fraud on the FDA claims.  But the defendants here prevailed on their motions to dismiss for a non-preemption reason, and that is just fine with us. 

The relator in Bennett was a bit of a gadfly (that’s as polite a term as we can muster) who had previously filed several Citizen’s Petitions with the FDA regarding FQs with (and here we are again endeavoring to be polite) mixed results — mostly denials. The FDA did require some enhanced or clarifying warnings on FQs,  but, from what we can tell, the relator does not seem to have been the primary reason for that.  We espy a bit of opportunism here, though we confess our priors in this area, and such priors are suffused with cynicism. 

Third Circuit law controlled in Bennett, and the Third Circuit permits fraudulent inducement liability under the FCA only in the context of contracts that were induced by fraud.  The alleged inducement here occurred in the context of a non-contractual interaction with the FDA. The Bennett court saw no good reason to expand liability beyond what the Third Circuit has thus far blessed. 

In any event, the relator’s allegations were flimsy. The relator alleged “half-truths” manipulated clinical trials, and “disaggregation of adverse effects.”  But none of that suggested that the defendants failed to comply with the New Drug Application process, or that they omitted any information specifically requested by the FDA. All of that adds up to a failure to plead falsity, and given what the F in FCA stands for, that is a fatal flaw. 

Is “fatal” an overstatement?  No. Because an additional amendment would be futile, the court dismissed the FCA complaint with prejudice.