SAN FRANCISCO — A federal appeals panel recently revived a case by former employees of Gilead Sciences Inc. who allege that the pharmaceutical company made false claims leading to billions of dollars of government money for drugs that allegedly did not comply with Food and Drug Administration (FDA) standards.
On July 7, a three-judge panel in the U.S. Court of Appeals for the Ninth Circuit reversed a district court dismissal of claims by Jeff and Sherilyn Campie. The Campies, former Gilead employees, launched a suit against the company for allegedly violating the False Claims Act and retaliating against them for protesting alleged fraudulent activities. The case was originally dismissed for failure to make plausible claims.
The appeals court found that the Campies “stated a plausible claim that Gilead’s claims seeking payment for non-compliant drugs were a basis for liability under the False Claims Act,” and that they likewise had “adequately [pleaded] a claim for retaliation in violation of” the same act.
The Campies claimed that although Gilead had received FDA approval in the mid-2000s for anti-HIV retroviral drugs, including Emtriva, Truvada, and Atripla, the company had agreed to source the active ingredient, emtricitabine (also called FTC), from Canadian, German, U.S. and South Korean facilities registered with the FDA.
The Campies allege that by 2006, Gilead was purchasing FTC manufactured in unregistered Chinese facilities by a company named Synthetics China. They further contend that between late 2007 and early 2009, Gilead cut costs by importing FTC from Synthetics China while claiming it had been sourced from an approved manufacturer in South Korea.
The Campies assert that by the time Synthetics China was approved by the FDA in 2010, Gilead had already been incorporating FTC from the company for at least two years. Additionally, the Campies claim that Gilead disguised the origin of the FTC by altering inventory codes and product labels. The company allegedly then “falsified or concealed data in support of its application to get Synthetics China approved by the FDA,” including allegedly falsifying test results showing impurities and “microbial contamination.”
After repeated instances of contamination were reportedly discovered, Gilead severed ties with Synthetics China in 2011, but not before allegedly receiving billions of dollars from U.S. government organizations for products containing FTC that had not been approved by the FDA.
Jeff Campie served as senior director of global quality assurance from July 2006 to July 2009. After voicing concerns on a number of occasions regarding Gilead’s alleged use of contaminated and illicitly manufactured ingredients, Campie threatened in March 2009 to inform the FDA unless Gilead stopped “its fraudulent conduct” and discontinued “its deceptive practices.” In June 2009, Campie was informed that he was terminated, effective July 2009. Afterwards, the Campies filed suit against Gilead, alleging retaliation and violations of the False Claims Act.
In January 2015, the Campies’ case was dismissed in the U.S. District Court for the Northern District of California for failure to state a claim. The Campies amended their claim, but it was dismissed with prejudice in June 2015 by the same court, citing failure to state a claim specifically under the False Claims Act.
This decision was overturned on July 7 by the Ninth Circuit on the grounds that the Campies’ allegations of false claims and retaliation both met the standard of plausibility under the False Claims Act, thus allowing the case to move forward.