U.S. Third Circuit - The FindLaw 3rd Circuit Court of Appeals Opinion Summaries Blog

FCA Suit Against Genentech Dismissed

A federal appeals court turned back a lawsuit that said Genentech concealed health risks about Avastin in seeking government approval for the cancer drug.

The U.S. Third Circuit Court of Appeals said the plaintiff did not show how Genentech's actions would have made any difference under the False Claims Act. In fact, the court said Gerasimos Petratos, the former head of analytics for the company and whistleblower in the suit, acknowledged that the government would have deemed any of the alleged violations insubsubstantial.

"He concedes that Genentech followed all pertinent statutes and regulations," the court said in Petratos v. Genentech. "If those laws and regulations are inadequate to protect patients, it falls to the other branches of government to reform them."

Avastin

Avastin is a widely prescribed cancer drug, which has accounted for $1.13 billion yearly in Medicare reimbursements. Petratos blew the whistle on the company, saying it suppressed data that would have shown Avastin's side effects for certain patients were more common and severe than reported.

He said the company would have had to file reports with the FDA, which would have resulted in changes to the drug's label. Having suppressed the information, Petratos said, Genetech caused doctors to submit Medicare claims that were not "reasonable and necessary."

A trial judge dismissed the case, concluding that the claims were not false under the FCA. On appeal, the Third Circuit affirmed but on different grounds.

Materiality

The appeals court said that Petratos's claims were not material to establish a case under the FCA. The court noted that the government had taken no action against Genentech in the six years Avastin had been on the market and declined to intervene in the suit.

"Petratos's allegations may be true and his concerns may be well founded-but a False Claims Act suit is not the appropriate way to address them," the judges said.

According to the National Law Review, the decision underscores what many courts, including the US Supreme Court, have held: that "a nexus to the government's ultimate payment decision is the linchpin of materiality under the FCA."

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