Qui tam litigation holds a dear place in the hearts of U.S. federal prosecutors and whistleblowers alike, but the volume of these cases ebbed as the COVID-19 pandemic swept across the nation. A report by Gibson, Dunn & Crutcher LLP makes clear, however, that despite the pandemic-induced drag, these cases are resuming their historical pace, and makers of drugs and devices are once again the most frequently targeted type of business.
Device makers only can watch when cardiologists grapple with federal agency officials over device utilization. However, cardiologists are punching back hard against a rule used to judge whether a coronary artery stent is appropriately used, thus ensuring these devices won’t suffer a significant drop in utilization.
The U.S. Department of Justice (DoJ) has taken action to tamp down on False Claims Act (FCA) lawsuits. However, according to attorneys with the law firm of Gibson, Dunn & Crutcher LLP, the courts have come to different conclusions as to whether federal attorneys have appropriately dismissed FCA cases, a development that opens a new area of concern for drug and device makers.
The device industry is quite familiar with whistleblower lawsuits, but Cisco Systems Inc., of San Jose, Calif., was recently forced to pay more than $8 million in connection with a qui tam lawsuit over cybersecurity lapses for video surveillance equipment sold to state and federal government agencies. The case suggests device makers will have to be up to speed on cybersecurity if they wish to avoid suffering a similar fate, particularly given a recent warning the FDA posted regarding a widespread cybersecurity vulnerability.
The U.S. False Claims Act has been the subject of a substantial body of jurisprudence and policymaking, but the legal terrain has not necessarily grown any more predictable for makers of drugs and medical devices. A new update on FCA prosecutions by the law firm of Gibson Dunn highlights the fluidity of considerations such as the materiality of an allegation of a false claim despite a Supreme Court decision in 2016 (Universal Health Services, Inc. v. United States ex rel. Escobar) that was expected to provide a more stable interpretation of the law, just one example of a legal landscape that still creates substantial uncertainty for companies in the life sciences.
