Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 1 of 47
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MASSACHUSETTS
`
`UNITED STATES OF AMERICA,
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`Plaintiff,
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`v.
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`TEVA PHARMACEUTICALS USA, INC., and
`TEVA NEUROSCIENCE, INC.,
`
`Defendants.
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`
`Civil Action No. 20-11548
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`DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS
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`

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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 2 of 47
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`TABLE OF CONTENTS
`
`Page
`TABLE OF AUTHORITIES....................................................................................................ii
`I.
`INTRODUCTION....................................................................................................... 1
`II.
`BACKGROUND ........................................................................................................ 4
`A. Medicare Part D Created the Need for Charitable Assistance. ............................ 5
`B.
`The Alleged Charitable Support........................................................................ 8
`1.
`Teva’s Copaxone Treats Multiple Sclerosis, A Life-Altering
`Disease. ................................................................................................ 8
`Teva’s Shared Solutions Program Helps Copaxone Patients
`Investigate Benefits and Refers Patients to Third-Party Patient
`Assistance Hubs.................................................................................... 9
`The Charitable Foundations, CDF and TAF, Operated Independently of
`Teva. ..............................................................................................................10
`LEGAL STANDARD ................................................................................................13
`III.
`IV. ARGUMENT.............................................................................................................15
`A.
`The Government Fails to Allege a Violation of the Anti-Kickback Statute. .......15
`1.
`The Government Fails to Allege That Teva Had the Requisite
`Intent to Induce or Reward Medicare Purchases. ...................................15
`a.
`The Government Must Allege Facts That Plausibly Show
`that Teva Controlled the Charities’ Use of Their Funds. .............15
`The Government’s Factual Allegations Demonstrate that
`Teva Did Not Have Control Over The Charities.........................19
`The Government’s Reliance On Teva’s Alleged Usage of
`Data Is Unavailing and Is Inconsistent With DOJ Policy. ...........21
`The Government Fails to Allege That Teva Improperly Induced
`Doctors or Patients to Use Copaxone. ...................................................25
`The Government Fails to Allege That Teva Improperly Rewarded
`Patients for Using Copaxone. ...............................................................28
`The Government Fails to Allege a Violation of the False Claims Act. ...............30
`The Government Fails to Allege a Conspiracy to Violate the False Claims
`Act. ................................................................................................................34
`The Government’s Unjust Enrichment Claim Should Be Dismissed. .................35
`Teva’s Communications with TAF and CDF are Protected Under the First
`Amendment as “Charitable Solicitations.”........................................................37
`CONCLUSION..........................................................................................................38
`
`2.
`
`C.
`
`b.
`
`c.
`
`2.
`
`3.
`
`B.
`C.
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`D.
`E.
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`V.
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`i
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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 3 of 47
`
`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009).......................................................................................................... 13
`
`Bank of New York Mellon Tr. Co. v. Morgan Stanley Mortg. Capital, Inc.,
`No. 11 Civ. 0505, 2011 WL 2610661 (S.D.N.Y. June 27, 2011) ......................................... 20
`
`Barr v. Am. Ass’n of Political Consultants,
`140 S. Ct. 2335 (2020) ...................................................................................................... 39
`
`Bd. of Trustees of State Univ. of N.Y. v. Fox,
`492 U.S. 469 (1989).......................................................................................................... 38
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007).......................................................................................................... 13
`
`Clifton v. Fed. Election Comm’n,
`114 F.3d 1309 (1st Cir. 1997)............................................................................................ 39
`
`Cmty. Builders, Inc. v. Indian Motocycle Assocs., Inc.,
`692 N.E.2d 964 (Ma. 1998) ............................................................................................... 38
`
`Decovich v. Anthem Life Ins. Co.,
`744 F. App’x 466 (9th Cir. 2018) ........................................................................................9
`
`g., United States ex rel. Kasowitz Benson Torres LLP v. BASF Corp.,
`285 F. Supp. 3d 44, 56 (D.D.C. 2017), aff’d, 929 F.3d 721 (D.C. Cir. 2019) ....................... 36
`
`Guilfoile v. Shields,
`913 F.3d 178 (1st Cir. 2019)............................................................................. 15, 26, 31, 32
`
`Hagerty ex rel. United States v. Cyberonics, Inc.,
`844 F.3d 26 (1st Cir. 2016) ............................................................................................... 14
`
`Hanlester Network v. Shalala,
`51 F.3d 1390 (9th Cir. 1995) ............................................................................................. 26
`
`Humana Inc. v. Mallinckrodt ARD LLC,
`No. CV1906926DSFMRW, 2020 WL 3041309 (C.D. Cal. Mar. 9, 2020 ........................ 7, 19
`
`Jones-McNamara v. Holzer Health Sys.,
`630 F. App’x 394 (6th Cir. 2015) .................................................................................. 7, 22
`
`
`
`ii
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`

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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 4 of 47
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`TABLE OF CONTENTS
`
`Page
`
`Koufos v. US Bank, N.A.,
`939 F. Supp. 2d 40 (D. Mass 2013) ................................................................................... 37
`
`Lawton ex rel. United States v. Takeda Pharm. Co., Ltd.,
`842 F.3d 125 (1st Cir. 2016)........................................................................................ 14, 15
`
`Lyman v. Baker,
`954 F.3d 351 (1st Cir. 2020).............................................................................................. 13
`
`Mass. Eye & Ear Infirmary v. QLT Phototherapeutics, Inc.,
`552 F.3d 47 (1st Cir. 2009) ............................................................................................... 37
`
`N. Heel Corp. v. Compo Indus., Inc.,
`851 F.2d 456 (1st Cir. 1988)................................................................................................7
`
`R.A.V. v. City of St. Paul,
`505 U.S. 377 (1992).......................................................................................................... 39
`
`Riley v. Nat’l Fed’n of the Blind of N. C., Inc.,
`487 U.S. 781 (1988).......................................................................................................... 38
`
`Sorrell v. IMS Health, Inc.,
`564 U.S. 552 (2011).......................................................................................................... 39
`
`Speet v. Schuette,
`726 F.3d 867 (6th Cir. 2013) ............................................................................................. 38
`
`Taylor v. Moskow,
`No. CIV.A. 13-12675-FDS, 2014 WL 2573990 (D. Mass. June 6, 2014) ............................ 37
`
`United States el rel. Strunck v. Mallinckrodt Ard LLC,
`No. 12-175, 2020 U.S. Dist. LEXIS 10191 (E.D. Pa. Jan. 21, 2020) ............................ passim
`
`United States ex rel. Atkinson v. Pa. Shipbuilding Co.,
`No. 94-7316, 2004 U.S. Dist. LEXIS 14532 (E.D. Pa. July 28, 2004) ................................. 34
`
`United States ex rel. Booker v. Pfizer, Inc.,
`847 F.3d 52 (1st Cir. 2017) ......................................................................................... 31, 33
`
`United States ex rel. Brown v. Pfizer, Inc.,
`No. CV 05-6795, 2017 WL 1344365 (E.D. Pa. Apr. 12, 2017) ........................................... 28
`
`United States ex rel. Clausen v. Lab. Corp. of America, Inc.,
`290 F.3d 1301 (11th Cir. 2002) ................................................................................... 32, 33
`
`
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`iii
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`

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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 5 of 47
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`TABLE OF CONTENTS
`
`Page
`
`United States ex rel. D’Agostino v. EV3, Inc.,
`153 F. Supp. 3d 519, 530 (D. Mass. 2015), aff’d sub nom. D’Agostino v. ev3,
`Inc., 845 F.3d 1 (1st Cir. 2016).......................................................................................... 14
`
`United States ex rel. Emerson Park v. Legacy Heart Care, LLC,
`No. 3:16-CV-0803-S, 2019 WL 4450371 (N.D. Tex. Sept. 17, 2019) (N.D.
`Texas 2019)...................................................................................................................... 26
`
`United States ex rel. Gagne v. City of Worcester,
`565 F.3d 40 (1st Cir. 2009) ............................................................................................... 34
`
`United States ex rel. Ge v. Takeda Pharm. Co.,
`737 F.3d 116 (1st Cir. 2013).............................................................................................. 14
`
`United States ex rel. Gohil v. Sanofi U.S. Servs. Inc.,
`No. CV 02-2964, 2020 WL 4260797 (E.D. Pa. July 24, 2020) ........................................ 7, 22
`
`United States ex rel. Goodman v. Arriva Med., LLC,
`No. 3:13-CV-0760, 2020 WL 3840446 (M.D. Tenn. July 8, 2020)................................ 29, 30
`
`United States ex rel. Greenfield v. Medco Health Sols., Inc.,
`880 F. 3d 89 (3d Cir. 2011) .............................................................................. 27, 32, 33, 34
`
`United States ex rel. McGee v. IBM Corp.,
`81 F. Supp. 3d 643, 666 (N.D. Ill. 2015) ............................................................................ 35
`
`United States ex rel. Osheroff v. Tenet Healthcare Corp.,
`No. 09-22253-CIV, 2012 WL 2871264 (S.D. Fla. July 12, 2012)........................................ 28
`
`United States ex rel. Ruscher v. Omnicare, Inc.,
`663 F. App’x 368 (5th Cir. 2016) ...................................................................................... 15
`
`United States ex rel. Vitale v. MiMedx Group, Inc.,
`381 F. Supp. 3d 647 (D.S.C. 2019) .............................................................................. 27, 29
`
`United States v. Celgene Corp.,
`226 F. Supp. 3d 1032, 1057 (C.D. Cal. 2016).............................................................. passim
`
`United States v. Job Res. For Disabled,
`No. 97 C 3904, 2000 WL 562444 (N.D. Ill. May 9, 2000) .................................................. 36
`
`United States v. Krikheli,
`461 F. App’x 7 (2d Cir. 2012) ........................................................................................... 26
`
`
`
`iv
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`

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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 6 of 47
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`TABLE OF CONTENTS
`
`Page
`
`United States v. McClatchey,
`217 F.3d 823 (10th Cir. 2000) .......................................................................... 15, 16, 17, 18
`
`United States v. Medtronic,
`189 F. Supp. 3d 259, 268, 271 (D. Mass. 2016).................................................................. 26
`
`United States v. Regeneron,
`No. 1:20-cv-11217-FDS, ECF No. 24 ................................................................................ 27
`
`United States v. Regeneron,
`No. 20-cv-11217 ........................................................................................................ passim
`
`United States v. Toyobo Co.,
`811 F. Supp. 2d 37 (D.D.C. 2011) ..................................................................................... 35
`
`Williams-Yulee v. Fla. Bar,
`575 U.S. 433 (2015).......................................................................................................... 38
`
`STATUTES
`
`26 U.S.C. § 6104 .................................................................................................................... 23
`
`26 U.S.C. § 6033(a)(1)............................................................................................................ 23
`
`31 U.S.C. § 3729(a)(1)............................................................................................................ 14
`
`31 U.S.C. § 3729(a) .......................................................................................................... 14, 34
`
`31 U.S.C. §§ 3729-3733 .................................................................................................. passim
`
`42 U.S.C. § 1320a–7b ............................................................................................................. 14
`
`42 U.S.C. § 1320a-7a........................................................................................................ 16, 30
`
`42 U.S.C. § 1320a-7b ............................................................................................ 15, 16, 31, 32
`
`OTHER AUTHORITIES
`
`26 C.F.R. § 301.6104.............................................................................................................. 23
`
`42 C.F.R. § 423.104..................................................................................................................6
`
`70 Fed. Reg. 70623............................................................................................................. 8, 37
`
`70 Fed. Reg. 70623, 70626 (Nov. 22, 2005)...................................................................... passim
`
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`v
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`TABLE OF CONTENTS
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`Page
`70 Fed. Reg. 70624....................................................................................................... 8, 18, 20
`
`70 Fed. Reg. 70627.................................................................................................. 7, 18, 22, 37
`
`79 Fed. Reg. 31120 (May 30, 2014) ................................................................................ 8, 9, 18
`
`79 Fed. Reg. 31122................................................................................................................. 18
`
`70 Fed. Rg. 70625 .................................................................................................................. 22
`
`FDA Drug Safety Information, Copaxone,
`https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/020622s110lbl.pdf ..................9
`
`Fed. R. Civ. P. 9(b)................................................................................................ 13, 25, 32, 34
`
`Fed. R. Civ. P. 12(b)(6) .......................................................................................................... 13
`
`Fed. R. Evid. 201(b) .................................................................................................................9
`
`https://tafcares.org/donors/how-are-donations-used.................................................................. 23
`
`https://tafcares.org/donors/how-we-help-2/ .............................................................................. 12
`
`https://www.mayoclinic.org/diseases-conditions/multiple-sclerosis/in-
`depth/personalized-therapy-for-multiple-sclerosis/art-20095758 ...........................................9
`
`https://www.mayoclinic.org/diseases-conditions/multiple-sclerosis/symptoms-
`causes/syc-20350269 ..........................................................................................................9
`
`https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-
`coverage/costs-in-the-coverage-gap ................................................................................... 23
`
`https://www.webmd.com/multiple-sclerosis/qa/can-drugs-that-slow-the-
`progression-of-multiple-sclerosis-ms-cure-it ........................................................................9
`
`Medicare.gov, https://www.medicare.gov/drug-coverage-part-d/costs-for-
`medicare-drug-coverage......................................................................................................6
`
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`vi
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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 8 of 47
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`I.
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`INTRODUCTION
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`The Complaint is premised on the Defendants’1 donations to two charitable foundations’
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`Multiple Sclerosis (“MS”) disease state funds. Those funds helped patients afford medically
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`necessary medication to treat their MS. The government contends that, because Teva allegedly
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`wanted its charitable donations to be used, in whole or in part, to help MS patients afford Teva’s
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`MS medication Copaxone, those donations violated the Anti-Kickback Statute (“AKS”) and the
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`False Claims Act (“FCA”). The government’s theory is fatally flawed for a number of reasons.
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`Accordingly, the Complaint should be dismissed.
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`The government does not, and cannot, allege that Teva had control of the charities’ use of
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`donated funds, much less the right to require the charities to use Teva’s donations for Copaxone.
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`On the contrary, the funds to which Teva donated supported a number of MS products, and the
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`charities retained control over the use of those. That ultimate independence over how the funds
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`were dispensed is fatal to the government’s case. It “severs the nexus” of Teva’s donations
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`under the AKS.
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`The government also does not allege that any physician was influenced to prescribe
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`Copaxone, or any patient to use it, because of these donations. Indeed, the government fails to
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`identify a single patient who was prescribed Copaxone for any reason other than, in his or her
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`physician’s judgment, it was a medically necessary treatment for their MS.
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`Despite spending considerable time in the Complaint hypothesizing about the potential
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`impact of charitable contributions on drug pricing, the Complaint does not identify a single
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`
`
` 1
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` The Defendants are Teva Pharmaceuticals USA, Inc. (“Teva USA”) and Teva Neuroscience, Inc. (“Teva
`Neuroscience”) (collectively, “Teva” or the “Company”).
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`1
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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 9 of 47
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`comparable lower priced treatment, much less a comparable treatment that was not also
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`supported by manufacturer charitable contributions. Instead, the Complaint sets forth the
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`unfortunate but unremarkable proposition that the Medicare Part D structure shifts significant
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`cost burdens onto seniors, many of whom cannot afford much of their medication regimen
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`without help. That pharmaceutical companies assist in addressing this burden in a manner that
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`can also benefit their own products does not convert charitable contributions into criminal acts.
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`Taken as true for purposes of a motion to dismiss only, the government’s factual
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`allegations in this case establish nothing more than that Teva hoped and expected that its
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`charitable donations would help Copaxone patients pay for their medication, and Teva took steps
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`to maximize the chances that would happen. But, that does not create an intent to induce
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`sufficient to establish an anti-kickback violation. If that were the case, no pharmaceutical
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`company could donate to a fund that, even in part, supported its own products without running
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`afoul of the AKS. There has to be something more. To violate the AKS, a donation must be
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`contingent on the charity’s agreement to recommend or otherwise promote the donor or its
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`product. There is no such agreement alleged here.
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`Guidance and opinions from the Department of Health and Human Services Office of
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`Inspector General (“OIG”) have consistently reinforced the fundamental proposition that
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`pharmaceutical companies can donate to funds that support their products. And OIG is certainly
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`well aware that for-profit pharmaceutical manufacturers “hope and expect” that their donations
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`will “in whole or in part” support their own products. To conclude otherwise is to engage in a
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`fiction that no court should countenance. Yet, taken to its logical conclusion, the government’s
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`theory necessarily converts that hope and expectation into an intent to induce that is violative of
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`the AKS. If the government were correct, then any such donation would violate the AKS
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`2
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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 10 of 47
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`irrespective of the safeguards followed—and the OIG’s guidance would be tantamount to
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`counselling in favor of criminality. For that reason, the government cannot satisfy the requisite
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`intent to induce necessary to state a claim.
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`The Complaint fails to satisfy several other elements of the AKS. Teva’s donations did
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`not “induce” or “reward” prescriptions under the AKS. There is no allegation that Teva
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`marketed its donations or otherwise “induced” prescribers or patients in the initial selection of
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`Copaxone as a treatment. The donations that patients received occurred after the prescribing
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`decision and with no attribution to Teva (or any of the other manufactures whose pooled
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`contributions went into the charities). Indeed, the Civil Monetary Penalties Law specifically
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`exempts “remuneration which promotes access to care and poses a low risk of harm to patients
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`and Federal health care programs.” That principle is instructive here. Teva’s donations both
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`promote access to care and pose a low risk of harm to Federal health care programs because the
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`donations were made to charities that retained the ultimate discretion in how to distribute their
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`funds.
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`The government’s FCA claim also fails because the government has not identified a
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`single claim that resulted from a Teva donation, which is required to satisfy the statutory
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`causation requirement that a false claim “result from” a violation of the AKS. The Complaint
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`and accompanying exhibits reflect that: 1) other manufacturers contributed to the charities; 2)
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`their pooled donations were not attributed to Teva or marketed to patients or prescribers to
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`influence which medications were selected; and 3) the foundations ultimately disposed of the
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`pooled funds they received from Teva and other manufacturers in the manner they deemed
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`appropriate. The temporal connection between donations and patient funding alleged by the
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`government is insufficient as a matter of law.
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`3
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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 11 of 47
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`The government has failed to state a claim for conspiracy to violate the FCA because it
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`has alleged no facts to show a “meeting of the minds” to defraud the government involving either
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`charity, CDF or TAF. And none of the facts alleged undermine the ultimate independence that
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`the charities ultimately had, and exercised, over the distribution of Teva’s (and other
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`manufacturers’) donations.
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`The government’s claim for unjust enrichment fails as well. The government’s FCA
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`claims confirm it has an adequate legal remedy. Where the government cannot make out the
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`statutory elements under the AKS and the FCA, the Court should not permit it to seek relief
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`beyond what Congress has declared to be unlawful. In any event, the government’s unjust
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`enrichment claims fail for the same reasons that its FCA claims fail.
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`Finally, through this enforcement action, the government chills speech protected by the
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`First Amendment. The government’s positon is that what converts a legal donation into a crime
`
`is speech and speech alone—the alleged sharing of information relating to donations. However,
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`communications between a donor, like Teva, and a charitable foundation, are unquestionably
`
`speech incident to charitable giving. The government’s effective restriction on pharmaceutical
`
`companies’ speech, while not restricting identical speech made by others, runs afoul of the First
`
`Amendment and Supreme Court precedent. Under principles of constitutional avoidance, the
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`Court should resolve any doubts in favor of dismissing this action.
`
`At its core, the government’s theory conflates donations to charities pooled with other
`
`manufacturers to help patients afford their necessary medication, with kickbacks to providers or
`
`patients to influence drug choice. This case is an overreach by DOJ, based on a flawed legal
`
`theory, and should be dismissed.
`
`II.
`
`BACKGROUND
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`4
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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 12 of 47
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`A. Medicare Part D Created the Need for Charitable Assistance.
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`In 2006, Medicare Part D prescription drug coverage went into effect. The program,
`
`however, has a significant shortcoming: it does not subsidize the full cost of prescription drugs.
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`(Compl. ¶¶ 16-21.) Instead, large gaps in coverage remain, leaving seniors with a considerable
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`burden in affording their drugs.
`
`After a Part D beneficiary meets an annual deductible ($250 in 2006), he or she is
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`responsible for a 25 percent co-pay on prescription drugs up until an “initial coverage limit”
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`($2,250 in 2006). (Compl. ¶¶ 19-20.) Once the “initial coverage limit” is reached, there is a
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`“coverage gap”—also known as the Medicare “donut hole.” In that gap, patients are responsible
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`for a high percentage of their brand name prescription drugs (e.g., 100 percent through 2010).
`
`(Id. ¶ 20.) Medicare beneficiaries must then pay fully out of pocket until an “annual out-of-
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`pocket threshold” is met for the coverage year ($3,600 in 2006). (Id. ¶¶ 20-21.)2 The financial
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`thresholds (i.e., the premiums, annual deductible, initial coverage limit, and out-of-pocket
`
`threshold) have increased each year since 2006. (Id. ¶ 21.) In 2020, the initial coverage limit is
`
`$4,020, the out-of-pocket threshold is $6,350, and an annual deductible can reach $435. 42
`
`C.F.R. § 423.104.3
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`As a result, many retirees cannot afford the medication they need, despite having
`
`Medicare Part D coverage. As the Wall Street Journal reported in 2005, people with insurance
`
`
`
` 2
`
` When in the “donut hole,” Medicare beneficiaries were required to pay 100 percent of the costs of brand
`name prescription drugs from 2006 to 2010, 50 percent in 2011 and 2012, 47.5 percent in 2013 and 2014,
`and 45 percent in 2015 and 2016. (Compl. ¶ 20.)
`
`3 See also Costs for Medicare drug coverage, Medicare.gov, https://www.medicare.gov/drug-coverage-
`part-d/costs-for-medicare-drug-coverage.
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`5
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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 13 of 47
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`
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`were finding it increasingly difficult to afford treatment. (Compl. Ex. 7.) This was particularly
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`acute with newer biological medications that “are proteins grown in cells, which is a complex,
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`expensive process” and the companies that developed them took the position that pricing was
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`necessary to “recoup development costs and invest in research.” (Id.) Indeed, the
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`“biotechnology revolution” had “created hundreds of drugs for chronic, life threatening
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`illnesses.” (Id.) These drugs are often “a real miracle” for patients suffering from life-altering
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`disorders. (Id.) Thus, pharmaceutical company donations to patient assistance charities had
`
`begun to provide an important safety net. As one Medicare beneficiary explained to the WSJ: “I
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`feel grateful every day for [the PAP] and the companies that support them.” (Id.)
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`In response to the Medicare Part D coverage gap, pharmaceutical companies faced a
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`dilemma. If they stepped in to help patients afford their medication through direct subsidies,
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`they risked incurring the draconian penalties of the AKS and FCA. The solution was to continue
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`the charitable giving that, as the WSJ article cited in the Complaint recognizes, long predated
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`Medicare Part D. (Id.)
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`The federal government, in the form of the OIG, immediately recognized this dilemma as
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`well. It issued the Special Advisory Bulletin on Patient Assistance Programs for Medicare Part
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`D Enrollees that explicitly recognized the need for continued financial support by industry in the
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`context of Medicare Part D. See 70 Fed. Reg. 70623, 70626 (Nov. 22, 2005) (“2005 OIG
`
`Guidance”). 4 The OIG acknowledged that “[p]atient assistance programs (PAPs) have long
`
`
`
` 4
`
` The Court may take judicial notice of agency guidance. See, e.g., N. Heel Corp. v. Compo Indus., Inc.,
`851 F.2d 456, 468 (1st Cir. 1988) (taking judicial notice of administrative agency regulations); Humana
`Inc. v. Mallinckrodt ARD LLC, No. CV1906926DSFMRW, 2020 WL 3041309, at *10 (C.D. Cal. Mar. 9,
`2020) (taking judicial notice of the 2005 and 2014 OIG Special Advisory Bulletins).
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`6
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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 14 of 47
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`provided important safety net assistance to patients of limited means who do not have insurance
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`coverage for drugs, typically serving patients with chronic illnesses and high drug costs[,]” and
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`that the passage of Medicare Part D did not obviate the need for this “important safety net.” Id.
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`at 70626. Thus, the OIG observed “that pharmaceutical manufacturers can effectively contribute
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`to the pharmaceutical safety net by making cash donations to independent, bona fide charitable
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`assistance programs.” Id.
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`While the OIG’s guidance is a policy document and not binding law,5 the guidance
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`makes clear that, until recently, the government has never taken the position that a donation by a
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`pharmaceutical company to an independent charity with the hope, expectation, or purpose that its
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`donation be used, in whole or part, to support its products violates the AKS. There was and
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`remains no proscription against a manufacturer donating to a fund that supported its own
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`products. 2005 OIG Guidance, 70 Fed. Reg. at 70627. Indeed, even single drug funds (not at
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`issue in this case) were not viewed as necessarily in violation of the AKS. See id. n.19. When
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`the 2005 OIG Guidance was updated in 2014, it still did not proscribe donations by companies to
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`funds that supported products including their own. See 79 Fed. Reg. 31120 (May 30, 2014)
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`(“2014 OIG Guidance”).
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`Consistent with the 2005 OIG Guidance, in advisory opinions, the OIG repeatedly
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`approved arrangements in which pharmaceutical companies donated to charitable disease state
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` 5
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` See, e.g., Jones-McNamara v. Holzer Health Sys., 630 F. App’x 394, 400 (6th Cir. 2015); United States
`ex rel. Gohil v. Sanofi U.S. Servs. Inc., No. CV 02-2964, 2020 WL 4260797, at *8 (E.D. Pa. July 24,
`2020).
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`7
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`Case 1:20-cv-11548-NMG Document 23 Filed 10/19/20 Page 15 of 47
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`funds that supported their own products. This included the charities at issue in this case: the
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`Chronic Disease Fund (“CDF”) and The Assistance Fund (“TAF”). See OIG Adv. Op. No. 06-
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`10 (Sept. 14, 2006) (“CDF Op.”), attached as Exhibit 1; OIG Adv. Op. No. 10-07 (May 26,
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`2010) (“TAF Op.”), attached as Exhibit 2.6 Never once did the OIG find that a donor’s
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`subjective intent with regard to the use of its funds to support its own products violated the AKS.
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`That is because the involvement of an independent charity “sever[s] the nexus between the
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`patient subsidies and the manufacturer.” 2005 OIG Guidance, 70 Fed. Reg. at 70624 n.3; accord
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`CDF Op. 7 (“[CDF] awards assistance in a truly independent manner that severs any link
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`between donors and beneficiaries.”); TAF Op. 6 (“[TAF] would award assistance in a truly
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`independent manner that would sever any link between Donors and beneficiaries.”).7
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`B.
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`The Alleged Charitable Support
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`1.
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`Teva’s Copaxone Treats Multiple Sclerosis, A Life-Altering Disease.
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`Among the products that Teva sells is Copaxone. Copaxone is an injectable medicine
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` 6
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` Subsequently, OIG modified CDF’s advisory opinion (Not. of Mod. of OIG Adv. Op. No. 06-10 (Oct.
`26, 2015) and TAF’s advisory opinion (Nots. of Mod. of OIG Adv. Op. No. 10-07 (May 19, 2011) and
`(May 5, 2016)). These modified advisory opinions reflected the OIG’s continued approval of each
`charity’s patient assistance programs, per the charities’ certified information submission.
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`7 See also CDF Op. n.8 (“This conclusion is consistent with the OIG’s November 2005 Special Advisory
`Bulletin on Patient Assistance Programs for Medicare Part D Enrollees (70 Fed. Reg.