Opinion ID: 2743752
Heading Depth: 4
Heading Rank: 2

Heading: Claims Against AZ

Text: Schumann also purports to show direct and independent knowledge of the information underlying his AKS and best-price claims against AZ. In the CFAC, he 21 pleads that he learned of AZ’s alleged kickback and bestprice-misreporting schemes by reviewing confidential agreements and internal documents reflecting the history of relations between Medco and AZ; discussing formularies, rebates, various fee arrangements, and best-price implications with Medco colleagues and AZ officials; negotiating extensions of those agreements and arrangements; and encouraging health plans managed by Medco to favor AZ PPIs. Schumann repeats these factual bases in his supplemental declaration in opposition to AZ’s motion to dismiss, and adds that, based on his years of experience, AZ paid kickbacks to Medco and health plans it managed, and failed to incorporate those payments into applicable best-price reports. Under the now-familiar case law, these allegations are insufficient to plead original source status. As discussed above, Schumann’s knowledge is not direct because it came from reviewing documents and discussing them with colleagues who participated in the underlying events. See Paranich, 396 F.3d at 335-36; Stinson, 944 F.2d at 1160-61. In addition, although he has direct and independent knowledge of AZ’s business strategies, and of certain payments made by AZ to Medco and health plans it managed (which he pejoratively terms “Special Deals”), he does not have such knowledge that those strategies or payments involved kickbacks or submission of inaccurate best-price reports. And his knowledge that AZ was aware of its bestprice obligations does not indicate AZ intended to evade such obligations. Instead, Schumann substitutes experience-based belief that misconduct was occurring for the requisite direct and independent knowledge. This is plainly insufficient to qualify as an original source under the FCA. See, e.g., Zizic, 22 728 F.3d at 240 (citing Atkinson, 473 F.3d at 526 n.27; Stinson, 944 F.2d at 1160-61); see also Rockwell, 549 U.S. at 475-76. Therefore, Schumann fails to aver facts indicating he has direct and independent knowledge of any improper kickbacks from AZ to Medco or to health plans Medco managed; AZ’s actual best price for Prilosec or Nexium; AZ’s reported best price for those drugs; how AZ calculated the actual or reported best prices for Prilosec or Nexium; or any false or fraudulent claim submitted or caused to be submitted by AZ. See Atkinson, 473 F.3d at 519-20. Accordingly, he is not an original source of the information underlying his FCA claims against AZ.8