Teva granted pretrial appeal in high-stakes Copaxone kickbacks case

Teva’s latest play in its yearslong defense against kickback claims levied by the U.S. government has secured the company a slight legal reprieve.

In granting a pretrial appeal, the U.S. Court of Appeals for the First Circuit has agreed to look at one aspect of the case—the level of causation tied to alleged false claims filings to Medicare—before the sides take their arguments to trial.

The trial was originally slated for September but was postponed due to “substantial ground for difference of opinion” in one crucial aspect of the case, U.S. District Judge Nathaniel Gorton wrote in an August order.

Now, after considering the arguments in Teva's request for a pretrial appeal, the appeals court has found that an “immediate review is in order.”

The case involves allegations that Teva paid two patient foundations hundreds of millions of dollars to cover Medicare copays for patients on its multiple sclerosis drug Copaxone for several years. The company made the payments while dramatically raising prices for the medicine, according to the government.

The U.S. alleges violations of the Anti-Kickback Statue, which prohibits drugmakers from directly funding Medicare copays to prevent undue incentives for patients to receive a specific drug.

At issue in the pretrial appeal is the legal standard the government must reach to prove Teva's alleged kickback payments resulted in Medicare false claims filings. The district court has ruled that the government must establish a "causal" link between the two.

Teva, for its part, contends the government should be forced to prove the claims wouldn’t have been submitted to Medicare “but for” its payments to the foundations. This is a higher standard that the district court previously rejected.

The stakes are high for Teva. The company’s lawyers previously wrote that a potential judgment in the U.S.’ favor could exceed $10 billion in damages, representing an “enterprise-threatening amount that may render a post-judgment appeal impossible.”

Teva’s lawyers have also previously noted that if the company were to succeed in the causation argument, the company could ultimately prevail in the larger case.