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Source: Wikimedia Commons and Beinecke Library

DePuy’s Pinnacle Metal-on-Metal False Claims Suit Revived

Walter Eisner • Mon, August 21st, 2017

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The burden of proof on whistleblowers demonstrating specific claims for reimbursement in a False Claims case, has become more flexible. DePuy Orthopaedics, Inc. is feeling the result of that flexibility.

After having a Pinnacle hip implant metal-on-metal whistleblower False Claims lawsuit thrown out because the whistleblowers didn't show a direct connection between the device and an actual false claim for payment, the company is back on the hot seat.

A federal appeals court panel in California ruled at the end of July that the whistleblowers, Antoni Nargol and David Langton, can revive their 2012 suit connected to accusations that DePuy caused physicians to seek government reimbursement for devices that didn’t match the FDA-approved designs. They claim that more than half of the implants fell outside of FDA-approved specifications.

The Duxbury Rule

Citing a 2009 case called Duxbury, which allows “more flexible” pleading requirements for indirect false claims filed by third parties seeking government payment, the panel said it was "very likely" that the devices carried a representation that they were FDA-approved, even if the product wasn’t sold as represented. And since hip replacements are expensive, uninsured patients likely received the surgery with government reimbursement.

“In this context, where the complaint essentially alleges facts showing that it is statistically certain that DePuy caused third parties to submit many false claims to the government, we see little reason for Rule 9(b) to require relators to plead false claims with more particularity than they have done here in order to fit within Duxbury's ‘more flexible’ approach to evaluating the sufficiency of fraud pleadings in connection with indirect false claims for government payment,” the panel said.

Law360 reported that Ross Brooks, a partner of Sanford Heisler Sharp, and attorney for the whistleblowers, told them that, “As the court ruled, when a manufacturer sells many thousands of medical devices to providers, and more than half of the devices fall outside of their FDA-approved specifications, it is statistically certain that false claims were submitted to the government.”

A federal judge dismissed the whistleblowers’ complaint in February 2016. But they appealed, saying at oral arguments in December that the judge incorrectly found their complaint didn’t include enough details to sustain the allegations.

DePuy argued that the suit failed to identify any connection between a defective device and an actual false claim for payment—and that the FDA never made the company pull the device from the market, which was voluntarily discontinued.

But the appeals panel disagreed.

There was a victory for the company in the case. The panel found that the company did not misrepresent the safety of the device to the FDA because the agency had not withdrawn its approval of the device in the face of the allegations.

“The government, having heard what relators had to say, was still paying claims not because of what was said to or by the doctors, but because the government through the FDA affirmatively deemed the product safe and effective,” the panel said. “And, absent some action by the FDA, we can see no plausible way to prove to a jury that FDA approval was fraudulently procured.”

The case is Nargol et al. v. DePuy Orthopaedics Inc. et al., case number 16-1442, in the U.S. Court of Appeals for the First Circuit.

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