A former GlaxoSmithKline (GSK) executive, who is now a whistleblower, told a Massachusetts federal court last month that Takeda Pharmaceutical executives admitted to a kickback scheme “for the diabetes drug Actos.” He contends that the acknowledgement overrides Takeda’s demand for proof of specific claims. Opposing a motion to dismiss, Peter P. Lawton, the former GSK director of patent life-cycle maximization, said that top-level Takeda executives told him during three job interviews in 2009 that they were paying off physicians to prescribe Actos to treat prediabetes, even though the drug hadn’t been approved for such use. Because the executives knew the specifics of the illegal scheme, Lawton said, individual claims aren’t necessary to prepare a proper defense. He stated in that regard:
Where unlawful conduct is orchestrated at the highest levels of the company, the contention that defendants do not know enough about the unlawful conduct to mount a defense rings hollow. Similarly, where top executives have admitted unlawful conduct, there is little risk that the company will be unjustly accused.
The Takeda executives involved included its general counsel for U.K. business, its acting head of European patents, its head of global patents and the chief operating officer of its European pharmaceutical business, according to the suit. Lawton, who left GSK in 2003 after working there for 20 years, sued Takeda in February 2014. In August of 2014, the government declined to intervene. Takeda and co-defendant Eli Lilly and Co. asked for the suit to be dismissed in November, contending Lawton failed to state a claim.
The FDA has not approved Actos for prediabetes, and the Takeda executives allegedly told Lawton that it knew it wouldn’t be approved. Lawton says that Takeda and Eli Lilly from 2000 through 2011 paid doctors to give continuing education presentations touting the scientifically proven benefits of Actos for prediabetes, using studies written by the Japanese drugmaker. He contends that up to 1,000 speakers were paid $2,000 to $3,000 per speech to promote the off-label use.
Lawton says the doctors whom Takeda allegedly paid off didn’t bring up the fact that the drug had been proven to increase the risk of bladder cancer and heart problems. Takeda’s sales representatives also used false information to persuade doctors to prescribe the drug, the suit claims. Lawton says that between 2003 and 2011, Actos’ sales increased to $3.3 billion from $1.3 billion, including claims from Medicare and Medicaid. It’s further alleged in the suit that since the drug was not medically necessary, the claims were false. Lawton added: “Without defendants’ off-label marketing campaign, few if any doctors would have prescribed Actos to healthy patients for the prevention of diabetes.”
Lawton, in his court filing, responded to Takeda’s claim that his suit can’t overcome the so-called public-disclosure bar, which bars relators from bringing False Claims Act suits based on prior public disclosures. Takeda had argued that disclosures in two cases – the Allen v. Takeda multidistrict litigation and U.S. ex rel. Ge v. Takeda – barred Lawton’s claims. But Lawton responded by saying:
The Allen case, which alleges that Actos can cause bladder cancer, differs in that it doesn’t involve off-label marketing and, further, that discovery in Allen had not started until after Lawton’s suit was filed. The Ge case revolved around Takeda’s alleged failure to report the adverse effects and bladder cancer risks related to Actos, which is unrelated to the kickback and off-label marketing claims in his own suit.
Lawton is represented by John Rudolf Low-Beer and David E. Kovel of Kirby McInerney LLP and Scott McConchie of Sherin and Lodgen LLP. The case is in the U.S. District Court for the District of Massachusetts. It will be interesting to see how this case fares as it progresses through the courts.
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