For three years, Teva has been defending against claims from the U.S. government that it paid illegal kickbacks to boost sales of its multiple sclerosis drug Copaxone. Now, with a trial just weeks away, Teva has scored a delay to pursue a unique appeal strategy.
The trial was previously scheduled for September but has been postponed because of “substantial ground for difference of opinion” in one important aspect of the case, U.S. District Judge Nathaniel Gorton wrote in a Monday order (PDF) published by Reuters.
The case centers on allegations from the government that Teva paid two patient foundations hundreds of millions of dollars to cover Medicare co-pays for patients on Copaxone for many years. The company made payments to the foundations even as it repeteadly raised prices, according to the government.
The U.S. also alleges violations of the Anti-Kickback Statute, which prohibits drugmakers from directly funding Medicare co-pays.
The general allegations aren't at issue in Teva's pretrial appeal. Instead, the company is challenging a July ruling from Gorton about the level of causation the government must prove in the case.
Teva argues the government should be forced to prove that the Copaxone claims wouldn't have been submitted to Medicare "but for" its donations to the foundations.
This is a higher standard than Gorton has laid out for the case. In July, he ruled if the government can establish a "causal connection" between Teva's payments to the patient foundations and the Copaxone claims under Medicare, those claims can be deemed "false" under the False Claims Act.
It’s an unusual circumstance, as appeals typically play out after a verdict in a trial. But it's apparently an important enough issue for the judge to press pause on the trial for now.
If Teva succeeds in the causation argument, the company may ultimately prevail in the case, its lawyers previously wrote.
But the company's lawyers also wrote that Teva could be on the hook for billions in payments should it lose the larger case.