A New York federal judge has reinstated the False Claims Act (FCA) claims of 26 states, Washington, D.C., and the city of Chicago in a whistleblower suit accusing AstraZeneca PLC of hiding safety information about antipsychotic drug Seroquel. U.S. District Judge Frederic Block reinstated the claims in a one-paragraph order, saying his decision was made in light of an April 26 letter from the New York Attorney General’s Office on behalf of the Plaintiff states and cities. Judge Block also said that AstraZeneca and other related Defendants can file new motions to dismiss any of those claims.
All of the states’ issues relating to these claims date back to March 31. That was when relator Allison Zayas, once a sales contractor for AstraZeneca, agreed during oral arguments to withdraw her state law claims without prejudice. On April 6, New York wrote to the court, saying that under state false claims laws, Ms. Zayas, the whistleblower, didn’t have the authority to withdraw the state law claims.
Six days later, Ms. Zayas acknowledged in her own letter that she lacked such authority and withdrew her consent to dismiss the claims. The states’ April 26 letter then asked Judge Block to reinstate the claims. The states also said in that letter that they agree with Ms. Zayas that state law claims won’t overly complicate issues at trial or prove unduly burdensome in litigation, since her case stems primarily from a common set of facts.
Ms. Zayas has alleged that Seroquel may pose a risk to patients’ heart health and that AstraZeneca misrepresented the danger of prescribing it to patients who were also using other drugs that pose the same cardiac risks. The danger in question is so-called “QT prolongation,” which refers to unusually long electrical processes in the heart. The specific prescriptions at issue were reimbursed by Medicare from 1997 to 2009.
AstraZeneca had based its defense on the U.S. Supreme Court’s 2016 ruling in Universal Health Services v. Escobar, which created a new test for determining “material” billing misconduct under the FCA. The drug company argued that studies about Seroquel’s risks were publicly available to the federal government, so they must not have been important to determining reimbursement. The U.S. Department of Justice, however, (which has not intervened in the case) rejected that argument in a letter to the court. Judge Block eventually ruled in mid-April that the whistleblower had made plausible allegations of a “complex fraudulent scheme” and kept alive parts of her complaint.
The case is U.S. ex rel. Zayas v. AstraZeneca Biopharmaceuticals Inc., et al., (case number 1:14-cv-01718) in the U.S. District Court for the Eastern District of New York.