Regeneron Case Likely to Join Teva Pharmaceuticals’ FCA Causation Appeal

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Regeneron Case Likely to Join Teva Pharmaceuticals’ FCA Causation Appeal

Earlier this week, Judge F. Dennis Saylor IV of the US District Court for the District of Massachusetts, who last month issued a significant ruling on the standard of causation required to prove False Claims Act (FCA) violations, said that he is inclined to allow an interlocutory appeal on the issue.

The issue stems from the interpretation of the phrase “resulting from” within the FCA. Judge Saylor held that the FCA requires a “but-for” causation standard, meaning that the government must establish that alleged illegal Medicare claims were directly related to illegal payments by Regeneron Pharmaceuticals Inc. to providers. That is the standard presently applied by the Sixth and Eighth Circuit Courts of Appeals. 

Earlier this year, however, Judge Nathanial M. Gorton issued a conflicting ruling in the same district in the government’s pending case against Teva Pharmaceuticals. Judge Gorton held that a less burdensome standard, a mere “causal connection” between kickbacks and Medicare reimbursement submissions, is sufficient under the FCA. Only the Third Circuit has adopted that interpretation.

Given the ongoing, directly contradictory rulings from two judges in the same judicial district, as well as the current lack of a binding appellate guidance, the issue is headed to the First Circuit Court of Appeals for a critical showdown that will have wide-ranging impact on future FCA proceedings.

Read Law360’s coverage on the issue here. (Subscription required)

Several Charged in $20 Million Scheme to Distribute Black Market HIV Drugs

Earlier this week, prosecutors for the US Attorneys’ Office for the Southern District of New York unsealed indictments of 10 individuals, charging them with a slew of offenses related to illegal purchases and distribution of prescription HIV medications.

According to the indictments, the defendants engineered the scheme for more than six years, beginning in 2017 and continuing into 2023. The defendants would allegedly purchase HIV drugs from black market sources and then distribute them to pharmacies, which would sell the drugs to patients. The scheme netted millions of dollars in profits for the conspirators, who used it to purchase waterfront real estate in the New York City area, expensive jewelry and designer clothing, and a $245,000 Mercedes-Benz Maybach.

The defendants are facing charges of conspiracy to defraud the United States, violation of the Anti-Kickback Statute, mail fraud, and money laundering. At least two defendants are currently fugitives.

Read Law360’s coverage here. (Subscription required)

Psychiatrist Convicted of Defrauding Medicare for Over $11 Million

On October 24, 2023, a Massachusetts-based psychiatrist was convicted by a federal jury of more than a dozen charges relating to a fraudulent billing scheme. Dr. Gustavo Kinrys, who resides in Nantucket, submitted reimbursement claims to Medicare and other private insurance companies for thousands of psychiatric appointments which never actually occurred.

During trial, prosecutors presented evidence that Kinrys often billed for purported patient visits during times that he was not even in the United States (while traveling to locations such as Prague, the Dominican Republic, and the Bahamas) or when his own patients were also traveling. Additionally, on 384 different days during a three-year period from 2015 to 2018, Kinrys submitted bills for sessions which added up to more hours than there are in a day.

Kinrys advanced a defense that he was simply overwhelmed and failed to recognize the inconsistencies with his billing, thus the discrepancies were not intentional. However, prosecutors countered with evidence that belied that theory, including that Kinrys had billed for 460 sessions for his wife in 2017 alone, and had billed another patient’s insurer for 46 sessions even though she ceased meeting with Kinrys after only 10 such appointments.

After the jury’s verdict, prosecutors requested that Kinrys’ bond be revoked pending sentencing, but Judge Denise Casper denied their motion. Kinrys’ sentencing is scheduled for January 31, 2024, and he faces over 100 months’ imprisonment.

Read Law360’s coverage of the case here and here. (Subscription required)


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