Judge Myrna Perez, nominated by President Biden to the Second Circuit court of appeals, partly reversed a lower court and allowed a complaint contending a drug company had improperly and fraudulently marketed a drug used to treat MS to go forward. The December 2024 unanimous decision by Perez was in US ex rel Camburn v Novartis Pharmaceuticals Corp, .
What happened in this case?
Steven Camburn worked for Novartis Pharmaceutical Corp. in sales for its drug Gilenya, which is used to treat multiple sclerosis (MS). Camburn filed a False Claims Act lawsuit against Novartis, contending that Novartis had violated a federal anti-kickback law (AKL) by fraudulently promoting and offering remuneration to physicians for prescribing and helping promote Gilenya. Shortly after Camburn filed the complaint against it, Novartis fired Camburn.
After discovery and the filing of an amended complaint, the district court dismissed Camburn’s complaint, maintaining that it did not allege the AKL scheme “with sufficient particularity.” Camburn appealed to the Second Circuit.
How did Judge Perez and the Second Circuit rule and why is it important?
Judge Perez wrote a unanimous opinion that reversed the court below and ruled that several aspects of the complaint against Novartis were sufficiently specific to go forward. Judge Perez ruled, for the first time in the Second Circuit, that a plaintiff has adequately pleaded an AKS violation “when she states with sufficient particularity that at least one purpose of the alleged scheme was to induce fraudulent conduct.”
Based on this principle, Judge Perez found that three categories of alleged Novartis activity met the legal standard. These included (1) speaker programs ‘with no legitimate attendees,” apparently intended to pay off speakers who frequently prescribed the drug; (2) “compensation of speakers for cancelled events;” and (3) the “selection and retention of certain speakers deliberately” in order to “induce a higher volume” of prescription of the drug. Judge Perez accordingly sent the case back to the lower court so it can consider on the merits these three claims against Novartis.
Judge Perez’s opinion was obviously important to Steven Camburn and to others who may have been improperly victimized by Novartis’ improper promotion of its MS drug. The decision may also be significant in other cases concerning improper promotion and marketing of drugs, particularly in the Second Circuit, which includes New York, Connecticut and Vermont. In addition, it serves as a reminder of the importance of confirming fair-minded judges to our federal courts.