Gilead is a large drug producer, with a majority of its prescription drug product sales occurring in the United States. Gilead produces anti-HIV drug therapies, including the drugs Atripla, Truvada, and Emtriva. When a drug manufacturer wishes to get a drug approved for manufacture and sale in the United States, it must submit a “new drug application” (NDA) to the US Food and Drug Administration (FDA), in which it states the chemical composition of a drug and specifies the facilities where it will be manufactured, as well as methods and controls used in the manufacturing process. Gilead told the FDA it would source its active ingredient, FTC, from registered facilities in Canada, Germany, South Korea, and the United States. In reality, it sourced its FTC from a Chinese firm called Synthetic China, which had a history of problems relating to contaminants and adulterants in its chemicals. Gilead went on to have its drug approved by the FDA and began selling drugs potentially laced with dangerous contaminants. Jeffrey and Sherilyn Campie, employees of Gilead, blew the whistle on Gilead’s practices and were fired shortly after. The Federal Trade Commission subsequentially brought a claim against Gilead under the False Claims Act.
JUDGE MOLLOY Gilead ultimately sought approval from the FDA to use Synthetics China’s FTC in October 2008, but according to relators, Gilead had been including products from Synthetics China in its finished drug products for at least two years before this approval was obtained in 2010. Relators also allege that Gilead falsified or concealed data in support of its application to get Synthetics China approved by the FDA. For example, Gilead claims in its application that it had received three full-commercial-scale batches of FTC from Synthetics China that passed testing and were consistent with or equivalent to FTC batches made from existing, approved manufacturers. Relators contend that this representation was false as two of three batches had failed internal testing. One of the batches purportedly contained “residual solvent levels in excess of established limits” and other impurities. A second batch had “microbial contamination” and showed the presence of arsenic, chromium and nickel contaminants. Gilead did not report this to the FDA, but rather secured two new batches from the unapproved Chinese site and amended its PAS on April 24, 2009, to include the substitute data. The FDA approved the amended PAS in May 2009 and the Synthetics China facility was registered in 2010. Gilead also began using FTC from another, unapproved Synthetics China facility, but ultimately stopped using Synthetics China as a supplier in October 2011, following continued contamination issues. Two recalls of contaminated products occurred in 2014.
Gilead never acknowledged or notified the FDA about the bad test results or the contamination and adulteration problems. Despite being aware of manufacturing problems with Synthetics China, Gilead allegedly released 77 lots of FTC produced by Synthetics China to its contract manufacturers before the FDA approval of the Synthetics China facility. Relators allege that the drug products made with FTC affecting the quality and purity of the drug and produced at a different, uninspected manufacturing site are not FDA-approved. And, according to relators, had the FDA been aware of these issues, it would not have approved the use of the Synthetics China manufacturing facility. Relators make a similar argument for the use of unapproved sites in Alberta, Canada to produce ambrisentan, the active ingredient in Letairis, and contamination of tenofovir disoproxil fumarate (a.k.a. Viread), another active ingredient.
Relators insist that Gilead actively concealed its use of illicit FTC products by Synthetics China in a number of ways. First, Gilead imported the FTC through its Canadian facilities and used fraudulent labeling. Second, the labels and paperwork for the FTC were obscured or augmented to conceal where the FTC was actually produced. Third, Gilead credited its approved FTC manufacturers with the production of the Synthetics China FTC. Relators allege Gilead’s false statements and fraudulent conduct resulted in government payments both directly, through programs such as the Department of Defense, Department of Veterans Affairs, Federal Bureau of Prisons, USAID, and the Public Health Service, and through reimbursement programs, such as Medicare, Medicaid, TRICARE, FEHBP, and the Ryan White Program. Payment for drugs under these programs is contingent upon FDA approval. Relators allege that because the drugs paid for by the government contained FTC sourced at unregistered facilities, they were not FDA approved and therefore not eligible for payment under the government programs On June 20, 2009, Campie was informed he would be terminated effective July 2009. He was told that his “heart wasn’t in the job anymore.”
Campie maintains, however, that he was terminated because he “discovered, investigated, and raised concerns over Gilead’s release and distribution … of tons of contaminated and adulterated [active ingredients] that had been manufactured at unregistered and uninspected” facilities and thus “were not eligible for payment under the Government Payment Programs, causing the submission of false claims paid by the [federal] Government and the States.”
Upon termination, Campie was asked to sign a severance agreement agreeing not to initiate any claims under the False Claims Act. He refused.
Relators have adequately satisfied the falsity requirement under a theory of factually false certification. As in National Wholesalers, Gilead committed factually false certification by supplying “misbrand[ed]” goods. Specifically, Gilead represented to the FDA that its active ingredients had been manufactured in approved facilities that had been registered therewith.
Relators have also adequately satisfied the falsity requirement under a theory of implied false certification. Here, relators allege false statements permeating the regulatory process. They allege Gilead mislabeled and misbranded nonconforming drugs and misrepresented its compliance with FDA regulations by omitting critical information. They allege that Gilead established policies and practices to violate the FDA’s regulatory requirements and allege specific instances of such violations, such as altering inventory codes, and mislabeling or altering shipping and tracking information. All the while, Gilead was submitting claims for payment for “FDA approved” drugs. Moreover, they allege that Gilead made false statements regarding test results in order to get FDA approval and thus become eligible for government funds. As was the case in Escobar, “[t]he claims in this case do more than merely demand payment. They fall squarely within the rule that half-truths—representations that state the truth only so far as it goes, while omitting critical qualifying information—can be actionable misrepresentations.” Relators adequately plead falsity under the False Claims Act.

CRITICAL THINKING
One critical-thinking skill is a heightened awareness of the danger of reaching a conclusion prior to acquiring missing information that were it known would have a reasonable probability of altering the conclusion. How does the court’s determination based on the rule of half-truths fit with that critical-thinking skill?

ETHICAL DECISION MAKING
What stakeholder affected by their behavior was Gilead weighting very lightly when it decided what to tell the FDA about the medicines it wished to have permission to sell?