Appeals court revives whistleblower case accusing Bausch of patent abuse

Bausch Health Companies

03/08/2023 22:24

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      District judge had dismissed the case, finding it restated
public information
    

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      9th Circuit says earlier public disclosures did not
include
'full picture'
    

  
    By Brendan Pierson
       Aug 3 (Reuters) - A federal appeals court on Thursday
revived a whistleblower lawsuit accusing Bausch Health Companies
Inc of fraudulently obtaining patents on its ulcerative colitis
drug Apriso, causing artificially high prices to be charged to
Medicare and Medicaid.
    A three-judge panel of the San Francisco-based 9th U.S.
Circuit Court of Appeals held that the whistleblower, patent
lawyer Zachary Silbersher of the law firm Kroub Silbersher &
Kolmykov, was not merely repeating publicly available
information in his lawsuit, as a lower-court judge had found.
    A lawyer for Silbersher, Tejinder Singh of Sparacino,
declined to comment. Bausch and its lawyer did not immediately
respond to requests for comment.
    Apriso is an extended release formulation of the compound
mesalamine, first sold in the United States in 2008. Apriso
generated between $200 million and $300 million in annual sales
for Bausch Health, which was previously known as Valeant
Pharmaceuticals, before generic versions launched in 2019.
    Bausch acquired the rights to the drug in 2015 when it
bought Salix Pharmaceuticals.
    In 2018, Silbersher sued Bausch under the False Claims Act,
a federal law allowing individuals to bring so-called qui tam
lawsuits against companies for fraud on behalf of the
government.
    He said Bausch fraudulently obtained patents on Apriso from
the U.S. Patent and Trademark Office by concealing earlier
research and patents that made its invention obvious. Silbersher
had earlier represented a generic drug company in successfully
challenging the validity of one of Bausch's patents.
    U.S. District Judge James Donato in San Francisco dismissed
the case, saying that Silbersher could not sue as a
whistleblower because he had simply restated information from
public patent proceedings and from a news article.
    But U.S. Circuit Judge Gabriel Sanchez, writing for
Thursday's 9th Circuit panel, said that none of the earlier
public information clearly stated a fraud claim against Bausch,
    "In sum, the scattered qualifying public disclosures each
contain a piece of the puzzle, but none shows the full picture,"
Sanchez wrote. "In his qui tam action, Silbersher filled the
gaps by putting together the material elements of the allegedly
fraudulent scheme."
    Sanchez was joined by Circuit Judge Mary Schroeder and U.S.
District Judge John Antoon of the Middle District of Florida, a
visiting judge on the court.
    Silbersher has filed similar lawsuits against other
companies, with mixed results. One against AbbVie Inc was
dismissed last year, while another against Johnson & Johnson
survived a dismissal motion. 
    The case is Silbersher v. Valeant Pharmaceuticals
International inc et al, 9th U.S. Circuit Court of Appeals, No.
20-16176.
    For Silbersher: Tejinder Singh of Sparacino
    For Valeant: Moez Kaba of Hueston Hennigan
    
    Read more:
    Judge tosses whistleblower lawsuit accusing Bausch Health of
patent abuse
    AbbVie dodges whistleblower's patent fraud suit over
Alzheimer's drugs
    J&J unit must face novel whistleblower patent lawsuit

 (Reporting By Brendan Pierson in New York)
 ((Brendan.Pierson@thomsonreuters.com; 332-219-1345 (desk);
646-306-0235 (cell);))