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# Gilead Asks 9th Circuit to Rehear HIV Drug Case
- URL: https://www.fdaweb.com/gilead-asks-9th-circuit-to-rehear-hiv-drug-case/
- Published: 2017-09-12T12:00:00.000Z
- Updated: 2026-09-14T22:48:42.000Z
- Author: David McFarland
- Tags: Drugs, #legacy-id-D5139606

Gilead is asking the 9th Circuit Court of Appeals to rehear or rehear *en banc* a whistleblower case involving three of the company’s HIV drugs that was initially [thrown out](http://fdaweb.com/login.php?sa=v&aid=D5132527&searchWords=gilead&cate=S&stid=%241%24tS4.yT1.%24WhdorD6rxlaWVGTuonUmc.&ref=fdaweb.com) by a California federal court. In its [petition](http://www.fdalawblog.net/Gilead%20-%209th%20Cit%20Rehearting%20Petition.pdf?ref=fdaweb.com) for a rehearing, Gilead says the whistleblowers’ complaint alleges that the company sold the government drugs representing them as approved by FDA although, as the whistleblowers claim, the drugs failed to meet certain manufacturing standards.

“But they were FDA approved and still are to this day,” Gilead asserts. “Even after multiple inspections, audits, and investigations, FDA has never withdrawn approval. The government purchasers were also unfazed. Far from seeking refunds when the allegations came to light, the government purchasers continued buying drugs from Gilead year after year. Nevertheless, relators seek to claw back billions of dollars.”

The Gilead request says that the whistleblower suit “seeks to persuade a jury to override intricate regulatory judgments about the public good, including what drugs should be approved and stay on the market and how FDA should enforce compliance with its own standards. Yet, the \[9th Circuit\] panel sustained the complaint in a ruling that invites similar suits against just about any contractor in all regulated industries.”

The appeals court decision, according to Gilead, is inconsistent with the direction set forth by the Supreme Court in *Escobar* prescribing “rigorous” and “demanding” pleading requirements to stem a tide of False Claims Act litigation premised on recasting any purported regulatory infraction as a fraudulent claim for payment. The company says the appeals court decision is an outlier since it is contrary to opinions from six other appeals courts.

“The 9th Circuit is now the only court of appeals that permits a new breed of ‘fraud’ where the purported victim was unharmed and unconcerned about the accused practice, and even affirmatively authorized it,” Gilead says. “The result is open season for enterprising lawyers to pore over regulations in search of trivial infractions and pour into the 9th Circuit seeking jackpots. These suits not only will burden businesses with litigation costs and exorbitant settlements, but also will override agencies’ considered judgments as to what is and is not a violation and what consequence, if any, should follow.”

The Gilead request for a rehearing is supported in a Washington Legal Foundation (WLF) *amicus* [brief](http://www.wlf.org/upload/litigation/briefs/USexrelCampievGilead-WLFAmicus.pdf?ref=fdaweb.com). WLF says it does not condone fraud against the United States, however it may occur. But it expresses the concern that “excessive False Claims Act liability in recent decades has spawned abusive litigation against businesses, both large and small, to the detriment of free enterprise, employees, shareholders, and consumers. WLF believes that the Supreme Court’s *Escobar* decision properly balances the need to prevent fraud against the United States with the need to ensure that private litigants do not use the False Claims Act to extort unwarranted settlements from reputable government contractors.”

According to WLF, the 9th Circuit panel’s holding that the whistleblowers have adequately alleged materiality is directly at odds with the “rigorous” and “demanding” materiality standards established by the Supreme Court in *Escobar*. It says the whistleblowers have conceded that the government has not sought to revoke its approval of Gilead’s NDA for the drugs in question and continues to pay billions of dollars for the drugs. And, it says, the Justice Department has not sought to intervene in the action in support of the whistleblowers. Its brief lists several reasons why it believes the case should be re-heard.