BOSTON (Legal Newsline) - Before the federal government's kickback lawsuit against it proceeds, Teva Pharmaceuticals wants an appeals court to handle the issue of causation.
Boston federal judge Nathaniel Gorton on July 14 granted partial summary judgment to the United States in its lawsuit against Teva, whose motion he denied. The federal government says Medicare was defrauded when Teva sent funds to groups that helped patients make co-payments on its multiple sclerosis drug Copaxone.
Court documents say Teva donated $350 million from 2006-17 to two foundations that provided Copaxone co-pay assistant. The feds say these kickbacks caused Medicare to buy more Copaxone than it would have while the price paid by pharmacies to Teva went from about $17,000 per year for the drug to more than $85,000.
Gorton's order grants summary judgment to the government on materiality, causation and damages under the FCA. It said claims submitted to Medicare for services resulting from kickbacks are "materially false or fraudulent for purposes of the FCA."
As for damages, Gorton chose to follow the federal government's suggestion that the correct measure is the entirety of its expenditures for claims resulting from illegal kickbacks.
On July 26, Teva asked Gorton to stop the case and allow it to file an interlocutory appeal of his Juy 14 ruling that said the feds do not need to prove that "but for" the alleged kickbacks, Medicare wouldn't have purchased so much Copaxone.
Teva says prior rulings from the Third and Sixth circuits are on its side and wants the First Circuit to join them.
"If Teva is correct that the government must demonstrate "but for" causation, then summary judgment should be granted because the government has no identified any particular claims for reimbursement that would not have been submitted to Medicare in the absence of Teva's donations," the company's motion says.
"The costs of an unnecessary trial to he parties and the court's resources will be significant. Trial is anticipated to last six weeks and involved more than two dozen witnesses and hundreds, perhaps even thousands, of exhibits."
Even if a First Circuit ruling does not terminate the case, the causation standard will still affect the trial, Teva says.
"As a result of this Court's ruling on the standard for damages (an issue on which Teva does not seek certification), the liability Teva faces may well exceed $10 billion, an enterprise-threatening amount, the consequences of which could hinder Teva's ability to proceed with a post-judgment appeal of this critical issue," the motion says.