Relators stated an actionable False Claims Act claim against defendant drug manufacturer, claiming that, for 16 months, defendant had obtained a key active ingredient for HIV antiretroviral drugs it sold to the government from unapproved Chinese factories and that the improperly sourced ingredient was adulterated. The complaint adequately alleged fraud based on implied false certification that the drugs were FDA-approved for distribution, when it knew otherwise, and based on factually false certification of the drugs as approved, knowing they were unapproved knock-offs. Gilead’s argument that the government kept paying for the drugs even after learning the source of the key ingredient’s manufacture did not show its misrepresentations were immaterial because the continued approval was itself induced by Gilead’s fudging its test results for the improperly sourced ingredient. Plaintiff also sufficiently alleged a claim for retaliation for his whistleblowing activity.
Ninth Circuit Court of Appeals (Molloy, J., sitting by designation); July 7, 2017; 2017 WL 2884047