A whistleblower lawsuit against drugmaker Gilead Sciences Inc. alleging the company misled federal drug regulators into approving adulterated HIV drugs has been revived by a federal appeals court.
The Recorder reports that the Ninth Circuit Court of Appeals ruling reverses a California Court’s dismissal of the case. The appellate court said in its opinion that the claims made by whistleblowers Jeff and Sherilyn Campie, both former Gilead employees, are sufficient and satisfy the requirements of a False Claims Act complaint.
The Campies accuse Gilead of using synthetics from a manufacturer in China to lower the production costs of its HIV drugs but concealing the nature of those ingredients when seeking U.S. Food and Drug Administration (FDA) approval of the drugs.
According to The Recorder, the plaintiffs “also allege Gilead hid or falsified certain data to aid in their subsequent bid for FDA approval of the Chinese ingredients.”
The Campies alleged that Gilead made false statements to the government, including its alleged omissions to the FDA. The company also altered inventory codes and mislabeled or altered shipping and tracking information to conceal the origin of products.
In March 2015, Law360 reported that Gilead had pressed the U.S. District Court for the Northern District of California to toss the case, successfully arguing that “allegations of shoddy drugmaking fail to show deception of Medicare and Medicaid or sales of truly worthless products.”
Gilead maintained that its contract with the government did not detail the nature of the product to be delivered.
In the Ninth Circuit’s opinion, visiting Judge Donald W. Molloy of the District of Montana disagreed with Gilead’s argument, stating that “It is fraudulent conduct that gives rise to liability, regardless of whether the underlying relationship is based in contract, regulation, or statute.”
Judge Molloy also wrote that the Campies adequately plead falsity under the False Claims Act. “To hold otherwise would reduce FDA regulations akin to approval of the curate’s egg,” implying that rejecting the plea would be akin to the FDA relaxing its standards to allow the sale of adulterated drugs.
According to The Recorder, “Because Gilead [allegedly] committed either factually false or impliedly false certification through its representations to the FDA and labeling of its products,” Molloy said, “each claim was fraudulent even if false representations were not made therein.”