all right we're back on the record in the matter of the united states frank so lease versus united states of america versus millennium pharmaceuticals scott three cases one five dash one six nine five three one five dash one seven zero five five and one five dash one seven zero five seven each side has twenty minutes i know just before we start running the clocks will that includes you understand your rebuttal time this included in that yes you're ok and so i'm going to stop you at fifteen so that the other person gets there five are right and then proceed good morning your honor audrey barr on behalf relator franks to leave i'd like to save five minutes rebuttal ok the procedural posture of this case is that the district court denied the defendant's motions to dragon tigerland can kill a patient if it's used in the early treatment of severe patients suffering from severe heart attacks or in combination with certain other drugs it increases the risk of internal bleeding and the need for transfusion and ultimately death still the defendants in this yes your honor ok we've got the allegations i have three points to make your honor today first that the district court erred as a matter of law when this when it dismissed this case is barred by prior public disclosure in light of this court's new case apart pence second a soft heart hence abrogated why a right yes your honor and the district court relied on wayne yes your honor all right so you want us to vacate that part and send it findings on this last round yes your honor the court's analysis stopped at the original source allegation because the district court found that  solace didn't have a hand in the public disclosure and so therefore it doesn't qualify as the original source and the analysis and that they are so your honour's the court found that the case was the case would be barred normally by prior public disclosure unless you qualified as a mixed regional source and in this case the district court held that there were three elements to be an original source one of them being the hand in the hand in the original disclosure but the court did before it reached that third element say that the government that the defendants can see that one of the elements that the that mr sillies had already made a disclosure to the government before you brought this case and that he was likely to be a have direct and independent knowledge given that he had been an employee of all the defendants selling their drugs and so in that way the court already found that he would be an original source with the exception of that one element which is no longer an element under a higher price feel like you're over reading what the district court said but i'll be curious to hear with the other side that well yes your honor and to get to that point your honor even if the district court didn't make that marks against the district court so far on that issue yes your honor ok my second point would be that judge england correctly found that so we sufficiently states a claim for f d a violations and my third point before i delve into claims i've looked at your file pretty closely and it seems to me that there's a different analysis we need on each of those because they were treated differently in the pleading specifically judge eglin correctly found that the complaint alleges all the elements of an f d a claim based on kickbacks on both drugs integra len and avelox and as your honor requested i'll go through them separately first on integrity  alleges the defendants paid doctors hospitals and medical centers kickbacks in the form of honoraria grants travel's travels speaker fees and expensive meals but more specifically in allegations he they say he says that the defendants paid for trips to hawaii denver and las vegas he says that speakers were paid a thousand to two thousand five hundred dollars per bent sometimes they spoke and spoke for five or ten minutes and sometimes they spoke not at all but they got the money and at meals included dinners dinner parties at the hard rock cafe for a christmas party dinners at morton steakhouse for over a thousand dollars and dinner at nobu among others and the doctors were paid several thousands of dollars per patient that they are role enrolled in studies for kickbacks affected the use of integra within avelox in hospitals and cardiology clinics specifically sorry the defendants were told told their sales reps to after actors for more prescriptions for both integrity and avelox when defendants were paid when we did when defendants and their sales representatives paid doctors to speak and they were told the sales representatives were told to hold the doctors accountable hospital's formal formulary that's prograf one thirty six and that's important because that opens access to the doctor increases the likelihood that the doctors in the hospital will be using that drug specific lunches were made word doctor research and other perks to formulary communities committees to hospital guidelines committees and and to put to put integrity and and avelox on their formulary guidelines and standing orders and to purchase more integrity than avelox so those are all them so working on them simultaneously turning back to the integrand claims if i can so least also alleged that the federal health care programs paid for these drugs more specifically defendants  targeted medicare and medicaid prescribing doctors and hospitals to increase the market share within those programs for example defendants gave one doc five thousand dollars for a cardiology seminar in las vegas and to get the best return on their investment sharing tract hospitals by volume of medicare cardiology patients average length of stay and average charge her medicare patients finally sillies alleges that the defendants knowingly and willfully did those things using all your time i believe so your good morning in may it please the court job you saw on behalf of the united states as amicus however this court's disposes of these claims under rules nine b or twelve  we urge that this court leave open the ability of united states in an appropriate case to hold liable drug companies who knowingly induce the submission of false claims in order to finance the purchase of their drugs so just briefly i don't think i will use my full five minutes your honor i don't i don't agree stand what you want us to do what in a paragraph of the opinion are you asking us to say that you need perfect protection out of this case oh your honor i'm just saying if you happen to reach some select issues in the cross appeal we're just hoping that whatever you say in disposing of those issues you make clear that the government has the power to hold liable a drug company who actually does induce the submission of false claims to finance the sale of their drugs so you don't really want to do this case but you just want to make sure we're not wrong i don't know you and your honor i have college as i should just explain a little bit i mean  it is the general policy of the government that when a real leader is conducting litigation that you know even if we don't take over the case and intervene we will often appear as amicus in an effort to be helpful to the court to point out our view of what you know viable lines of false claims act liability may exist and so that's that's why i'm here i hope i'm being helpful in that regard and so i just want to point out to sort of anchor pole situations in which a drug company certainly could induce the submission of false claims so the first is imagine a drug representative going to a hospital and saying i've got a new drug or a drug it's not reimbursed for my my medicare but you know i want you to use that drug samina claim to medicare and use the payment you get to buy my drug and clearly if they're a drug company would have approximately cause the submission of a false claim for acting asking for preservation of that circumstance and where the inducement of a false claim is in is revealed by context even if it's not said out loud and we can imagine many avenues for proof of such a claim or sort of agnostic as to how any given really or would make out such a claim but we just want to clarify that we think those types of claims could be viable under the false claims act but we can't give you an advisory opinion no certainly not your honor of course so i'm just saying if you were to reach these issues in the cross appeal we would ask that you reject defendant's contentions to the contrary on these matters ok if there are no further questions from the court we would just like to thank as the defendants in the court for the ability to participate as amicus in to present oral argument here and i would reserve the balance of my time for relator on the bottom right frank thank you thank you very much ok so then you're going to ten minutes right correct your honor i thank you good morning may please the court kimberly done on behalf of millennium pharmaceuticals i'll be spending my ten minutes addressing the jurisdictional issue and the public disclosure  on behalf of the defendants and my colleague counsel for sharon plan will address the cross appeal to get to the issue of what the district court decided or did not decide the district court did not address the issue of direct and independent knowledge there was no dispute about disclosure to the government in advance of filing the complaint the court need only look at the language that the court used in referring to it appears that give a he would be able to satisfy that but there's a finding is what you're not finding whatsoever and he says it may well but he never evaluated the issue and that's important now it's this court has the ability based solely on the face of the complaint to address the question of jurisdiction and the parties asked the defense asked this court to do so because the equity supported this case is very old it's been twelve years since millennium sold this drug it's been eight years since sharing terminated the relator in this case is here talking about whether we should send it back to the district court to determine whether the difference the case in harkens right harkins is not analogous despite what will later said and which case are you worried about us and what are you worried about  sending back to the district court you just want to weigh in here on the other side wants to win here we want the court to address the jurisdiction issue here and now and to finally resolve it we urged the district where we buy recall correctly counsel in h say that for the district court to make findings as to whether the relator is qualified as a original sources under the now clarified you know two part test why should we do the same in this case hard we don't generally make factual findings and reach those sort of conclusions here on the heels of the first time her pence involved a factual challenge where there was a question of the accuracy of what was said in the complaint it required factual development in the court sent it back to the district court to in fact conduct that factual review this is a case involving a facial challenge to the complaint they can be resolved based soley within the four corners of the complaint and the complaint makes clear that this will later does not have a direct and independent knowledge of any fraud there's no real dispute about the fact that there is a public disclosure relator doesn't add anything genuinely new and valuable to the information that was already publicly to disclosed in the one point i do want to make sure the court knows is that the public disclosure can be just the two thousand and seven cases really the bentley is a portion of what those two thousand and seven cases cover because within those cases the fraudulent scheme of off label promotion with regard to integrity and and the scheme about paying kickbacks is very clearly alleged so in that regard the allegations in this complaint are substantially similar it's the same parties it's the same drug it's the same fraudulent scheme it's the same payers so it's substantially similar the question is was there let's assume town so assume for the sake of whether the district court wants to give the claim different opportunity to file an amended complaint that he can qualify because the the landscape of the law has changed so as a practical matter if we were to reach that evaluation and say well under this now new two part test in the heart and you don't quite make it because the allegations insufficient well what about the opportunity to amend so i you know just as a practical matter i i the less we can say  loses an amendment is futile which is the conclusion the district court reached i don't know that you would necessarily prevail you mean in the war here but then ultimately after some long delay while we come up with some disposition  think the relator has made it clear that he has no more to offer when he is defending him there's been multiple opportunities for the relator to supplement his complaint using the later relator said someplace and i have nothing else to say well no but the relator has certainly had multiple opportunities in which to add more and has more not to do so of course lou under the oil law oh the under the law there's no new law with regard to this case i mean we argued direct independent knowledge before the district court we urged the district court to address the direct an independent knowledge prong we weren't ignoring it we saw the heart pence on bank appeal we notified the district court it was pending and the district court was notified after the decision was rendered the district court chose to decide the case based on the pronk that had been eradicated in that case but the record is complete here i mean as far as the complaint the court can look at it and there is nothing more that the relator can and he has made that clear he doesn't say what he's going to add in his reply brief when for the first time on appeal he says he wants a remained of the issue wasn't before at that time because the the has now put the issue there are parents issue wasn't there but it was your honor in the sense that there were first two motions to dismiss for jurist lack of jurisdiction in both instances the defendants argued direct an they realized that the ninth circuit eradicated the third prong because the decision was rendered before the district court decided the motion to jurisdictional motion and still ruled based on the not having a hand in the disclosure so there was plenty of opportunity for the relator to know that this case was going to be premised on direct and independent knowledge but even on appeal later offers nothing as to what he is going to add to this complaint this complaint is replete with information and belief and what the court needs to do and it is clear on the face of the complaint is don't look at what he says look at what he doesn't say because he does not say the facts that you would expect an insider to have if he was aware of fraud so what he says about kickbacks uses these general conclusory terms i have heard that argument when looking at the four corners of a complaint don't look at what he says look at what he does say because the issue here is whether he has direct and independent knowledge to overcome a public disclosure bar and what that direct an independent knowledge must be is knowledge of fraud and all this related does is throw about conclusory language he talks about this there being an intent to induce but he doesn't offer one fact showing that there is an intent to induce even for the few meals that he does talk about which he organized he doesn't say that he had an intent to induce so everything is based on his say so and he offers no reason to believe that the doctors in this case would not otherwise have prescribed integra when in fact he concedes that in some institutions the use of integra one was standard of care and the same holds true with the off label ocean allegations is speculating that the doctor's office he will use was due to company conduct and not science there is nothing wrong or nothing that shows fraud from the dissemination of truthful and non misleading clinical data and that's what he alleges that he was trained with studies that were published in peer review literature a peer review journals he doesn't give any examples of promotional conduct that occurred in the field when he does point and he points to nothing with regard to millennium so it's buried as far as any field activity but with regard to sharing he points to an m s l letter that discloses the safety risks that reports accurately on the science he suggests it was used in two thousand and nine but it's an undated template so it's not clear from that perspective and if you look at the allegations in the complaint you only need to look at it by way of example i'd like to offer two paragraphs if you look at paragraph eighty four it starts with a sweeping allegation of kickbacks and it ends with a factual pro asked to be a speaker there is nothing that suggests fraud in that regard is your argument different whether we're talking about or interim the public disclosure argument does not pertain to avelox we did not move to dismiss for lack of jurisdiction on avelox and so this is only reaches the integrity claims so when we write this opinion assume or write this union we can count upon that concession you've made it's not a concession we didn't move it doesn't name absolutely it does not apply to correct i say i'm out of my time so i would just urge the court to resolve the issue of jurisdiction here and now this is an old case the parties tried to get the district court to decide the direct an independent knowledge and it can be decided based on a piece of this complaint thank you resolve the question whether there is jurisdiction because if there is jurisdiction over this case it is critical that the court reach and correct the erroneous decision of the district court  allows a claim based on fraud by hindsight to posit liability based upon the dissemination of peer reviewed scientific research published in national articles and that is what the district court did in ruling and denying the twelve b six motion with your predecessor that we need  only they can think of vacating the dismissal as to integrity your honor yes the allegations with respect to avelox there was no motion to dismiss on jurisdictional grounds that appeal is here properly before this court on the substance and nothing but if i could just to bring up a point to the nature of the allegations and that this relies on fraud by hindsight and that the district court accepted that as a as a basis for alleging f liability paragraph fifty one three fifty three of the complaint say that the medical science liaisons provided to sales reps reap state published scientific results from two thousand and one two thousand and five two thousand and six there are three paragraphs they each rich count the same things as to each they say those studies claimed that stem meet patients who received off label integrity and early had improved blood flows this is not our character as ation the complaint acknowledges that the studies claimed that there were better results for patients coming in with severe heart attack a stanley patient is a patient for whom blood flow to the heart is cut off the most serious heart attack and these three studies each claimed that they had observed that there was increased blood flow to these most serious heart attack victims when an earlier dose of integrity was administered there's no allegation that these were misreported these were this study results the allegation of fraud is based on the next paragraphs paragraphs fifty eight and fifty nine and each of those paragraph says about two different two thousand and nine study used a two thousand and nine study showed that sheering never should have sold integra when for treating stymied patients that is by its terms fraud by hindsight and i'm not selecting this paragraph the district court at s c are page pages seven to nine is describing the allegations focuses on these allegations in paragraphs fifty eight to fifty nine related to the two thousand and nine studies it cannot be and it would raise serious first amendment concerns and that's the reason we alluded to the first amendment issues in this case if there could be false claims act liability on the basis of a manufacturer sharing scientific studies with doctor so that they could make the best informed decisions for the health of their patients and it does not suffice to say but later studies in two thousand and nine we reached different results or at least that's the allegation we disagree with that interpretation of the two thousand and nine sites but even on the allegations it's merely that later science cast doubt on earlier studies it and under the standard of reimbursement under medicare and this is confirmed by the united states brief at page five in footnote to under four drugs whether it be inpatient or outpatient is medically reasonable and necessary necessarily that is a certification made by the doctor or hospital only on the basis of the science at the time it can't possibly be that as a doctor who uses radiation on a cat cancer patient is later accused of false claims act liability because subsequent science comes up with the chemical means of treatment as opposed to radiation it has to be on the basis of the science at the time so this is the idea that the district court cites to this fraud by hindsight allegation paragraphs fifty eight to fifty nine to say but he'll ledgers fraud is a serious serious problem for the pharmaceutical industry to the extent extent that it suggests that this kind of fraud by hindsight liability can be premised on redistributing journal articles not in an inappropriate way not to misrepresent their results now if we accept the argument you just made how would that affect the decision we're going to make well your honor this is one of the reasons i think it's important for the court to grapple with the jurisdictional arguments again we have not made we've not asserted factual disputes we've not asked the court to take judicial notice and certainly relator hasn't made any factual allegations that would need to be resolved by this court or the district court on the quest of independent direct and independent knowledge it's his own allegations and his own allegations don't show that here's what i thought i'd post that i want you just to go back with me a minute you obviously are trying to get us to say something in the opinion based upon your argument if we bought your opinion how would it change how would that focus in the opinion we wrote well your honor what issue would it deal with well i think that one way to address it is with respect to the even the issue of direct and independent knowledge that's before the court i think to point to the fact that although there are these allegations of fraud those are really just conclusory and that someone here position and consistent about the government the government on amicus sad well you're asking us to write is it inconsistent with what they're asking and i think yes i think that on this issue your honor i didn't hear any any space between us we don't disagree with what the government said that if a manufacturer goes and falsely represents that something is reimbursable that that would be a basis of liability here what is alleged is that we distributed truthful non misleading information that would satisfy the standard medically reasonable and necessary under the under the standard then in force i think there are some differences that we have in other cases with the government but here there's no basis to conclude that there's any fraud much less that he has direct an independent knowledge of fraud when the only allegation he makes that the product was distributed for all of these off label uses as to which the two thousand and nine studies cast doubt are made on information and belief and there are only two paragraphs of the complaint on information belief and both of them are with respect to the allegations that there was ongoing promotion after the two thousand  and and what issues do we have that's before us that this would affect i think that would go to the direct an independent knowledge that is part of the jurisdictional inquiry that my co counsel was addressing so i think  send back under him even if you even if you sent that back i think that it's relevant to that and i think it would be very important to point that out that that that it would only be with respect to continued promotion after the two thousand and nine studies that there could be fraud and that he doesn't allege that because those two allegations are based on information and belief those are paragraphs sixty two and ninety and i've been in your brief to us what issue did you raised this under your statement of issues you raise him before we raised both of this under both direct and independent knowledge we argue that he does not have direct independent knowledge of  any actual fraud and then we also raise it under falsity cuz i think when you get to substance it fails as a matter of twelve b six i do want to with respect to avelox which the court acknowledged there is no question about jurisdiction and these include one dinner and one lunch i would direct the court to e r five twelve which is a summary of the dinner and it says discussion resolved mostly revolve mostly around differences  specific not talking about doctors in quid pro quo but specific doctors and specific hospitals all we have are lunches for under three hundred dollars for twenty people that's less than fifteen dollars a person or there are allegations of a thousand dollar dinner but there's with were all paid less than that so you have in order for it to be a kickback it has to be to compensate them for that for the prescriptions not to compensate them for their time away from their practice and families thank you your honor on the issue of the original source exception to the public disclosure of our assuming there there was not a decision on the direct the element of direct direct and independent knowledge judge knew when it's right that it should be sent back under hard pence for the district court to decide that issue and to decide whether if it does find that that the later didn't have a lot more evidence are you going to put on when you go down below your honour's on on on evidence of this case well your honor is now on and white have her pants so i says so that you that you're going to prevail yes you're on is what to say and there's no market they're saying all the evidence is there that we can as a matter of law make a decision with a new law i think that's a bit a misstatement by them because the entire complaint was actually with the exception of a few a few paragraphs ok so  going to put on well you're talking around me tell me what more evidence you're going to put on your honor's we would add allegations as we would at allegations on what his role was there at sharing clough and mark and millennium and how it is that he came by the information that he had in the complaint how he knew about the r o i the things that were attached to the complaint as exhibits  o y on who to target for sales the studies on who which hospitals and doctors use the most medicare and medicaid for reimbursement and on the plans that he was given by the defendants for pay to play input pro quo sales we would make the bridge between the documents that were attached to the to the complaint to his direct independent knowledge but more specifically the complaint does say all the facts are based entirely on his personal and for mation personal knowledge and documents that he was in possession of he was in possession of these documents  there so we believe that the relator in fact does have direct and independent knowledge as it is but if the court romance and finds that it doesn't relate or would be able to add the bridge between the document that he attaches as exhibits to his allegations in the complaint and explain how it is that he was given a by the defendant's turning to the ca violations it's it's misleading because the defendants actually made misleading statements about the use of integra and on its safety and efficacy but more importantly their minimizing defendants are minimizing what their fragile and conduct was and more specifically the project and conduct wasn't just speech and it wasn't limited to the two after two thousand and nine as the defendant say so in this complaint for judging when correctly found that a claim was stated for biased studies to promote off label use of in heroin sharing chose their doctors first studies based on return of investment pain doctors with the highest integrity integrity and prescription volume on some of the studies the defendant's own employees were the researchers on the project independent studies show that there is a significant risk of bleeding and need for transfusion when integra one is used in the treatment of severe heart attack patients and that's the one that they referred to which came at the beginning of two thousand and nine but as early as two thousand and six the doctor to whom the last speaker referred to defendants referred to wrote a wrote a study showing the bleeding increased when integra and use used in combination with other drugs and that's two thousand and six so that's a lot earlier than the defendants claim that they knew but if you read the complaint you will see that part of the guise of giving money to doctors and hospitals as kickbacks were they were saying they were participating in studies if if the defendants were truly doing studies they would have known of these problems with their drug even before two thousand and six irrespective even after two thousand and six the defendants continue promoting in and they accessed confidential patient data to help hospitals identify patients for integra when used they did all of that after two thousand and six and certainly beforehand when they were doing their own studies now defendants make a big deal about fraud in hindsight only looking to the only looking to the fact that they were handing out old old articles but the bottom line is the defendants say that they only knew in two thousand and nine which is obviously not true based on the allegations in the complaint but even if they knew in two thousand and nine they should have stopped in two thousand and nine and according to the complaint and related frank's elise they kept doing it the relator was there for a year after those studies came out out so if you look at the complaint and look at the date that he left which is and ten and when those studies came out that the ones that even the defendants are relying on which is two thousand and nine spring of two thousand and that was an entire year that he was there as a sales representative and he knew that the promotions hadn't changed the part of the paragraph that honor the claim is based on the allegations in the complaint and this which were as i said related what works for both of them and a lot of the the allegations were jumbled up and they said the drugs but when they specifically referred to avelox i already read we decide that we need to send it back for hardpan's review in the district court would we send back both you have a locks and the entire group claims well on the avelox claims since it didn't since it didn't have anything to do with her parents or the public disclosure bar if the court were to reverse the suit me were to affirm the district court's denial of defendant's motions to dismiss on twenty six and ninety yes avelox claims would go back but they would be going back for discovery to be heard on the merits for trial or they'd be going back for consideration under heart perhaps avelox there was no  here actually and over time so if no one has any additional questions i'm going to call you ok thank you for your time thank you all right this matter will stand submitted to you all for your argument in this ma