High Court Asked to Consider Gilead Case
Washington Legal Foundation (WLF) is asking the Supreme Court to review and then overturn an appeals court decision authorizing private individuals to sue drug companies for government-contracting fraud based on technical violations of federal regulations, even if FDA approved the drugs and government officials continue to buy them after investigating the allegations. WLF says the appeals court decision conflicts with Supreme Court precedent and facilitates filing of unwarranted False Claims Act fraud claims against government contractors.
In the Gilead case, a whistleblower who was fired by the company alleged that the firm was out of compliance with FDA drug manufacturing regulations. Government officials investigated the allegations but took no action, WLF says. And, it says, the drugs remain approved by the agency and the government continues to pay billions of dollars each year to purchase the drugs.
The appeals court reinstated the whistleblower’s suit, WLF says, finding that he had adequately alleged that the company defrauded the government by submitting claims for payment without informing the purchaser of its regulatory non-compliance. The advocacy group says the whistleblower failed to demonstrate that the alleged false claims are “material,” meaning that the government would not have paid the claims had it been aware of the violations.