Court Opinion

ID: 4229681
Source: CourtListenerOpinion
Date Created: 2017-12-18 16:00:25.140797+00
Date Added: 2024-06-11T14:43:12.826262
License: Public Domain

17-1522-cv
    Daniel Coyne v. Amgen, Inc.
                           UNITED STATES COURT OF APPEALS
                               FOR THE SECOND CIRCUIT

                                    SUMMARY ORDER
   RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC
DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

         At a stated term of the United States Court of Appeals
    for the Second Circuit, held at the Thurgood Marshall
    United States Courthouse, 40 Foley Square, in the City of
    New York, on the 18th day of December, two thousand
    seventeen.

    PRESENT: DENNIS JACOBS,
             GUIDO CALABRESI,
             DENNY CHIN,
                                     Circuit Judges.

    - - - - - - - - - - - - - - - - - - - -X
    Daniel Coyne, MD,
             Relator-Appellant,

                 -v.-                                          17-1522-cv

    Amgen, Inc.,
             Defendant-Appellee.
    - - - - - - - - - - - - - - - - - - - -X

    FOR APPELLANT:                         Lori Siler Restaino, John M.
                                           Restaino, Jr., The Restaino Law
                                           Firm, Denver, Colorado.

                                           Kenneth J. Brennan, Tyler J.
                                           Schneider, TorHoerman Law LLC,
                                           Edwardsville, Illinois.

                                              1
FOR APPELLEES:             David S. Rosenbloom, McDermott
                           Will & Emery LLP, Chicago,
                           Illinois.

                           Eric O. Corngold, Friedman
                           Kaplan Seiler & Adelman LLP, New
                           York, New York.

     Appeal from a judgment of the United States District
Court for the Eastern District of New York (Azrack, J.).

     UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
AND DECREED that the judgment of the district court be
AFFIRMED.

     Dr. Daniel Coyne, serving as qui tam relator, appeals
from the judgment of the United States District Court for
the Eastern District of New York granting the motion to
dismiss his False Claims Act (“FCA”) suit against Amgen,
Inc. (“Amgen”). Coyne, a former paid speaker for Amgen,
alleges that from 1996 to at least 2010, the pharmaceutical
company caused the Government to make unreasonable or
unnecessary reimbursements of prescriptions for the kidney
disease drug Epogen. We assume the parties’ familiarity
with the underlying facts, the procedural history, and the
issues presented for review.

     Coyne’s allegations center on representations made by
Amgen on the packaging and marketing materials for Epogen,
a drug used to treat anemia by stimulating red blood cell
production. In 1994, the Food and Drug Administration
(“FDA”) approved Epogen to treat chronic kidney disease by
raising hemoglobin levels to the target level of 10-12
grams per deciliter (g/dL). The packaging for Epogen
contained two discrete sections: (1) “Indications and
Usage,” which provides the intended treatment and dosage
information as approved by the FDA; and (2) “Clinical
Experience,” which describes ancillary quality of life
benefits and attributes. The pre-2007 packaging for Epogen
stated in the Clinical Experience section that once a
patient reached target hemoglobin levels, “statistically
significant improvements were demonstrated for most quality
of life parameters....” J. App’x at 83. The packaging
statement did not mention any potential differences in
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quality of life metrics that may arise within the 10-12
g/dL range.

     Beginning in 1993, Amgen conducted the “Normal
Hematocrit Trial” (“NHT”), which randomly assigned dialysis
patients to one of two groups: the “low arm,” which
maintained participant hemoglobin levels of 9-11 g/dL; and
the “high arm,” which maintained participant hemoglobin
levels of 13-15 g/dL. After patients in the “high arm”
began to experience an elevated number of heart attacks and
deaths, Amgen halted the study and reported the NHT and
underlying data to the FDA in 1996. According to Coyne’s
interpretation, the NHT data “established that the [quality
of life] scores reach their apex and then plateau at or
before the 9-11 g/dL target range,” suggesting (in his
view) that taking Epogen beyond the 11 g/dL level confers
no discernible quality of life benefit. J. App’x at 19.
Coyne therefore asserts that Amgen knew as of 1996 that
raising hemoglobin levels above 11 g/dL would not
necessarily increase quality of life, but nonetheless
continued to market Epogen as approved for usage up to 12
g/dL without separately noting its limitations in “Clinical
Experience.”

     The FCA extends liability to “any person who knowingly
presents, or causes to be presented, a false or fraudulent
claim for payment or approval.” 31 U.S.C. § 3729(a)(1)(A);
see also 31 U.S.C. § 3729(b)(2)(defining “claim” as “any
request or demand, whether under a contract or otherwise,
for money or property ... that is presented to an officer,
employee, or agent of the United States”). Coyne proceeds
on a theory of implied certification; according to this
theory, “when a defendant submits [or causes to be
submitted] a claim, it impliedly certifies compliance with
all conditions of payment.” Universal Health Servs. v.
United States ex rel. Escobar, 136 S. Ct. 1989, 1995
(2016). Coyne’s contention is that between 1996 and 2011,
Amgen’s misrepresentations on Epogen’s packaging and
marketing materials about quality of life caused the
submission of false claims for prescription reimbursement
to the Centers for Medicare and Medicaid Services (“CMS”),
because each patient’s payment claim to CMS impliedly
certified Epogen’s compliance with the agency’s requirement
that medication be “reasonable and necessary” under 42
                             3
U.S.C. § 1395y(a)(1)(A). The district court ruled that the
FCA’s public disclosure bar precluded the claims against
Amgen and dismissed the suit. 1 See 31 U.S.C. §
3730(e)(4)(A).

     “We review the district court’s grant of a motion to
dismiss de novo, but may affirm on any basis supported by
the record.” Coulter v. Morgan Stanley & Co., Inc., 753
F.3d 361, 366 (2d Cir. 2014) (per curiam).   To state a
claim under 31 U.S.C. § 3729(a)(1), the plaintiff must show
“the defendants (1) made a claim, (2) to the United States
Government, (3) that is false or fraudulent, (4) knowing of
its falsity, and (5) seeking payment from the federal
treasury.” United States ex rel. Kirk v. Schindler Elevator
Corp., 601 F.3d 94, 113 (2d Cir. 2010), rev’d on other
grounds, 563 U.S. 401 (2011). An alleged
“misrepresentation about compliance with a statutory,
regulatory, or contractual requirement must be material to
the Government’s payment decision in order to be
actionable” under the FCA. Universal Health Servs., 136 S.
Ct. at 2002. “The materiality standard is demanding” and
materiality “cannot be found where noncompliance is minor
or insubstantial.” Id. at 2003. Specifically, to be
material the government must have made the payment “as a
result of the defendant’s alleged misconduct.” United
States ex rel. Ge v. Takeda Pharm. Co. Ltd., 737 F.3d 116,
124 (1st Cir. 2013).

     Coyne cannot satisfy these requirements because he does
not connect his allegations to the submissions of false
claims. Even adopting arguendo Coyne’s interpretation of
the NHT data, he fails to plausibly allege that any

1Since the NHT data was “publicly disclosed” to the
Government in 1996, Coyne cannot evade the public
disclosure bar unless he was an “original source” for the
information about Epogen’s quality of life benefits. See
31 U.S.C. § 3730(e)(4)(A). The definition of original
source was amended in 2010. See Pub. L. 111-148, 124 Stat.
119 (2010). Because we are affirming the dismissal of the
action on other grounds, we need not consider whether Coyne
is an original source or whether the revised definition
applies.

                             4
misrepresentation by Amgen materially impacted CMS’s
payment determination. 2 The amended complaint relies on a
conclusory assertion that Amgen’s failure to disclose the
NHT study to CMS was material to, or in effect caused,
payment. But it is not “sufficient for a finding of
materiality that the Government would have the option to
decline to pay if it knew of the defendant’s
noncompliance,” Universal Health Servs., 136 S. Ct. at
2003: the complaint must present concrete allegations from
which the court may draw the reasonable inference that the
misrepresentations on Epogen’s packaging and marketing
materials caused the Government to make the reimbursement
decision. See United States ex rel. Chorches v. Am. Med.
Response, Inc., 865 F.3d 71, 78 (2d Cir. 2017)(citing
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Coyne offers
none.

     Any claims about quality of life improvements contained
on the Clinical Experience portion of the label would be
unlikely to impact CMS reimbursement. That is because
FDA approval for Indications and Usage of a medication
makes it presumptively “reasonable and necessary” for the
purposes of CMS reimbursement, and only the Indications and
Usage section of the drug label relates to FDA approval.
See 21 C.F.R. § 201.56-57; Bayer Schera Pharma AG v.
Sandoz, Inc., 741 F. Supp. 2d 541, 547-48 (S.D.N.Y. 2010).
On the facts of this case, given that Epogen was prescribed
consistent with its FDA-approved indication, reimbursement
is appropriate. See Mut. Pharma Co. v. Bartlett, 133 S.
Ct. 2466, 2471 (2013); United States ex rel. Polansky v.
Pfizer, Inc., 822 F.3d 613, 616, 618-19 (2d Cir. 2016).

     Amgen’s introduction of new labeling for Epogen in 2007
confirms the lack of materiality. Following changes to FDA
policy, Amgen added information to the “Clinical
Experience” section of Epogen’s label in place of the
language challenged by Coyne:

2 Coyne also brings claims under 31 U.S.C. §§ 3729(a)(1)(B)
and (a)(1)(G), both of which contain materiality
requirements. Claims brought under these sections fail for
the same lack of materiality.
                             5
    In a 26-week double-blind, placebo-controlled trial,
    118 anemic dialysis patients with an average hemoglobin
    of approximately 7 g/dL were randomized to either
    Epogen or placebo. By the end of the study, average
    hemoglobin increased to approximately 11 g/dL in the
    Epogen-treated patients and remained unchanged in
    patients receiving placebo. Epogen-treated patients
    experienced improvements in exercise tolerance and
    patient-reported physical functioning at month 2 that
    was maintained throughout the study.

Supp. App. at 164. Amgen’s brief explains that the company
added this new information in the “Clinical Experience”
section of the label without making any change to the
“Indications and Usage” section. The new language—limiting
certain benefits to hemoglobin levels of approximately 11
g/dL—is what Coyne claims should have been disclosed on the
Epogen label since 1996. Yet armed with this information,
CMS did not alter its reimbursement practices with respect
to Epogen or exercise any independent discretion from the
presumption of FDA approval. The mechanics of the CMS
reimbursement scheme and its operation in practice show
that any concealment of the NHT data from CMS was
immaterial to its payment decisions.

     For the foregoing reasons, and finding no merit in
Coyne’s other arguments, we hereby AFFIRM the judgment of
the district court.

                           FOR THE COURT:
                           CATHERINE O’HAGAN WOLFE, CLERK

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