Gilead FCA Lawsuit

Case 3:17-cv-02612-JSC Document 17 Filed 02/06/19 Page 1 of 68
Joseph R. Saveri (State Bar No. 130064)

Steven N. Williams (State Bar No. 175489)
Nicomedes Sy Herrera (State Bar No. 275332) FILED
Kevin Rayhill (State BarNo. 267496)
Kyla Gibboney (State Bar No. 301441)
JOSEPH SAVERI LAW FIRM, INC. FEB -6Z019
601 California Street, Suite 1000
San Francisco, California 94108 SUSAN Y. SOONG
CLERK, U.S. DISTRICT COURT
Telephone: (415) 500-6800 NORTHERN DISTRICT OF CALIFORNIA
Facsimile: (415) 395-9940
Email: jsaveri@saverilawfirm.com
swilliams@saverilawfirm.com
nherrera@saverilawfirm.com
krayhill@saverilawfirm.com
kgibboney@saverilawfirm.com
Attorn^sfor Plaintiffs
10 UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA
11 SAN FRANCISCO DIVISION
12
UNITED STATES OF AMERICA; THE Case No.: 17-CV-2612
13 STATES OF CALIFORNIA, COLORADO,
CONNECTICUT, FLORIDA, GEORGIA, FIRST AMENDED COMPLAINT FOR
14 ILLINOIS, LOUISIANA, MARYLAND, VIOLATIONS OF:
MICHIGAN, MINNESOTA, NEVADA, NEW
15 JERSEY, NEW YORK, NORTH CAROLINA, 1. THE FEDERAL FALSE CLAIMS
RHODE ISLAND, TENNESSEE, TEXAS, ACT, 31 U.S.C. §§ 3729 ETSEQ.\
16 AND WASHINGTON; THE AND
COMMONWEALTHS OF
17 MASSACHUSETTS AND VIRGINIA; AND 2. THE FALSE CLAIMS ACTS OF
THE DISTRICT OF COLUMBIA, THE STATES OF CALIFORNIA,
18 COLORADO, CONNECTICUT,
exrel. ALLEN KUO, FLORIDA, GEORGIA, ILLINOIS,
19 LOUISIANA, MARYLAND,
Plaintiffs, MICHIGAN, MINNESOTA,
20 NEVADA, NEW JERSEY, NEW
v. YORK, NORTH CAROLINA,
21 RHODE ISLAND, TENNESSEE,
GILEAD SCIENCES, INC., TEXAS, AND WASHINGTON; THE
22 COMMONWEALTHS OF
Defendant. MASSACHUSETTS AND
23 VIRGINIA; AND THE DISTRICT
OF COLUMBIA
24
QUITAM ACTION FILED
25 IN CAMERA AND UNDER SEAL
26 DO NOT PLACE IN PRESS BOX

DO NOT ENTER ON PACER
27
JURY TRIAL DEMANDED
28
FIRST AMENDED COMPLAINT CASE NO. 17-CV-2612

1 TABLE OF CONTENTS
2 PAGE(s)
3 I. INTRODUCTION 1
4 A. Overviewof False Claims and Illegal Kickbacks 1

5 B. Background Facts and Senate Investigation of Price Increases 2
6 C. Gilead's FOCUS Scheme 4
7 II. PARTIES 7
8 III. JURISDICTION AND VENUE 8
9 IV. FEDERAL AND STATE-FUNDED HEALTH CARE PROGRAMS 9
10 A. Medicare 9
11 B. Medicaid 11
12 V. APPLICABLE LAW 13
13 A. The Federal Anti-Kickback Statute Prohibits a For-Profit Pharmaceutical

Company From Offering Financial or Other Incentives to Induce Health Care
14 Professionals to Prescribe Treatments Or Induce Those in a Position to
Influence Prescribers 13
15
B. Compliance With the Federal Anti-Kickback Statute Is a Prerequisite to a
16 Provider's Right to Receive or Retain Reimbursement from Federal and State-
Funded Health Care Programs 15
17
VL FACT ALLEGATIONS 16
18
A. Gilead's FOCUS Program is a Nationwide Scheme Targeting Vulnerable
19 Groups 16
20 B. Gilead's Payments Made Through FOCUS Violate the Anti-Kickback Statute

Because They Constitute Remuneration to Entities in a Position to Prescribe or
21 Influence Prescribers of Medication, and Such Payments Do Not Fall Within
One of the Statutory or Regulatory Safe Harbors 17
22
1. FOCUS Payments Subsidize Doctors' Salaries 19
23
2. FOCUS Payments Subsidize Patient Travel Expenses 22
24
3. FOCUS Payments Fund Modifications to Providers' Medical Software 24
25
4. FOCUS Payments Provide Health Care Providers With Other Unlawful
26 Remuneration 27
27 C. Commercial Affairs Drive Gilead's FOCUS Scheme 28
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1 D. Gilead' s Violations of the Anti-Kickback Statute Cause Over-Utilization and

Mis-Utilization of the Relevant Drugs 34
2
Count I False Claims Act 31 U.S.C. §§ 3729, etseq. 36
3
Count II California False Claims Act Cal. Gov't Code §§ 12650-12656 37
4
Count III Colorado Medicaid False Claims Act Colo. Rev. Stat § 25.5--4-303.5 et
5 seq. 38
6 Count IV Connecticut False Claims Act Conn. Gen. Stat. § 4-274 etseq. 39
7 Count V Florida False Claims Act Fla. Stat. Ann. § 68.081 etseq 40
8 Count VI Georgia False Medicaid Claims Act Ga. Code Ann. § 49-4-168 etseq. 41
9 Count VII Illinois Whistleblower Reward and Protection Act 740 111. Comp. Stat.
§ 175/1 etseq. 43
10
Count VIII LouisianaMedical Assistance Programs Integrity Law La. Rev. Stat.
11 § 437 etseq 44
12 Count IX Maryland False Health Claims Act Md. Code Ann., [Health-General]
§ 2-601 etseq 45
13
Count X Massachusetts False Claims Act Mass. Gen. Laws Ch. 12, § 5 etseq.... 46
14
Count XI Michigan Medicaid False Claims Act Mich. Comp. Laws. § 400.601 et
15 seq. 47
16 Count XII Minnesota False Claims Act Minn. Stat, § 15C.01 etseq 48
17 Count XIII Nevada - Submission of False Claims to State or Local Government
Nev. Rev. Stat. § 357.010 etseq 49
18
Count XIV NewJersey False Claims Act N.J. Stat. Ann. § 2A:32C-1 etseq. 50
19
Count XV New York False Claims Act N.Y. State Fin. § 187etseq. 51
20
Count XVI North Carolina False Claims Act N.C. Gen. Stat. § 1-605 etseq. 52
21
Count XVII Rhode Island False ClaimsAct R.I. Gen. Laws § 9-1.1-1 etseq. 53
22
Count XVIII Tennessee False Claims Act Tenn. Code Ann. § 4-18-101 etseq. .. 54
23
Count XIX Texas Medicaid Fraud Prevention Law Tex. Hum. Res. Code Ann. §
24 36.001 etseq. 55
25 Count XX Virginia Fraud Against Taxpayers Act Va. Code § 8.01-216.1 etseq.. 56
26 Count XXI Washington State Medicaid Fraud False Claims Act Wash. Rev.
Code § 74.66.005 etseq. 58
27
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1 Count XXn The District of Columbia False Claims Act D.C. Code § 2-381.01 et.
seq 59
2
PRAYER FOR RELIEF 60
3
DEMAND FOR JURY TRIAL 64
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1 PlaintifF-Relator Allen Kuo ("Relator"), through his attorneys theJoseph Saveri LawFirm,
2 Inc., on behalf of the United States of America; the States of California, Colorado, Connecticut,
3 Florida, Georgia, Illinois, Louisiana, Maryland, Michigan, Minnesota, Nevada, New Jersey, New
4 York, North Carolina, Rhode Island, Tennessee, Texas, and Washington; the Commonwealths of
5 Massachusetts and Virginia; and the District of Columbia (the foregoing States, Commonwealths,
6 and the District of Columbiacollectively, "the PlaintiffStates"), for his Complaint against
7 Defendant Gilead Sciences, Inc. (hereinafter "Gilead" or "Defendant") alleges, based upon
8 personal knowledge, relevant documents, and information and belief, as follows:
9
L INTRODUCTION
10
A. Overview ofFalse Claims and Illegal Kickbacks
11
1. This is an action to recover damages and civil penalties on behalf of the United States
12
of America and the PlaintiffStates arising from false and/or fraudulent statements, records, and
13
claims made and caused to be made by Gilead and/or its agents and employees in violation of the
14
federal False Claims Act, 31 U.S.C. §§ 3729 etseq. (the "Act" or "FCA"); the Anti-Kickback
15
Statute, 42 U.S.C. § 1320a-7b (the "Anti-Kickback Statute"); and the false claims acts and anti-
16
kickback statutes of the Plaintiff States.
17
2. Gilead unlawfully pays kickbacks and other forms of impermissible remuneration to
18
healthcare organizations, hospitals, health centers, academic institutions, community organizations,
19
primary care clinics, STD clinics, and others (collectively "Healthcare Providers") through its
20
Frontlines of Communities in the United States ("FOCUS") scheme. These kickbacks include, but
21
are not limited to: (1) paying doctors' salaries with FOCUS money; (2) paying for patient travel to
22
clinics and appointments; (3) paying for upgrades to providers' medical software; (4) paying for or
23
providing personnel to facilitate the writing ofprescriptions for Gilead^s Relevant Drugs'; (5) paying
24
25
26 ^Relevant Drugs include, without limitation, Sovaldi, Harvoni, Epclusa, Emtriva, Viread, Truvada,
Stribild, Atripla, Complera, Genvoya, and Descovy, along with any other drug, pharmaceutical, or
27 biologic manufactured or sold by Gilead that was supplied, or for which a prescription was written, by
a health care provider receivingimproper remuneration from Gilead, as alleged herein.
28
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1 for upgrades to laboratory equipment; and (6) providing resources to encourage thedissemination of
2 findings that benefit Gilead's sales ofRelevant Drugs.
3 3. The purpose of Gilead's nationwide scheme is to induce or otherwise influence
4 prescribers (and those in a position to influence prescribers) to write prescriptions for Gilead's
5 Relevant Drugs for the treatment for chronic hepatitis C virus infection ("HCV") and the human
6 immunodeficiency virus ("HIV"). Through FOCUS, Gilead funnels unlawful remuneration to
7 Healthcare Providers throughout the United States, causing the entities receiving kickbacks to
8 implement an aggressive "opt-out"screening model for HIV and HCV that sharply increases the
9 frequency of testing even when not clinically appropriate. Above all else, Gilead induces FOCUS
10 money recipients to prescribe Gilead's Relevant Drugs by emphasizing "linkage to care."
11 4. Through the provision of unlawful remunerations to Healthcare Providers receiving
12 FOCUS money, Gilead distorts prescription drug practices, increases demand for Gilead's Relevant
13 Drugs, raises prices for Gilead's Relevant Drugs, and ultimately boosts Gilead's sales and profits for
14 the Relevant Drugs.
15 5. FOCUS is a Trojan horse for Gilead's CommercialAffairs department to drive sales

16 and maintain Gilead's market share for its expensive HCV and HIV drugs.
17 6. The United States Government has been harmed because it has, and continues to pay,
18 for Gilead's Relevant Drugs as a result of kickback-tainted false claims submittedunder federally-
19 funded health care programs, including, without limitation, Medicare Part B, Medicare Part D, and
20 Medicaid.
21
B. Background Facts and Senate Investigation of Price Increases
22
7. Founded in 1987, Gilead is a for-profit pharmaceutical company that holds itself out
23
to the public as a leader in developingtherapies for HIV and HCV infection.
24
8. One of the catalysts for Gilead's rise to becoming a Fortune 500 Company has been
25
its HCV drug business.
26
27
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1 9. On July 11, 2014, the Committee of Finance of the United States Senate launched an
2 18-month investigation (the "Senate Investigation") into the pricing of two of Gilead's Relevant
3 Drugs used to treat HCV infection Sovaldi andHarvoni).
4 10. While the Senate Investigation focused on the high prices paid by the Government for
5 Sovaldi and Harvoni—which cost $84,000 and $94,500, respectively, for a single course of
6 treatments—the Committee did not investigate or have any knowledge of the false claims alleged
7 herein. Rather, the Senate Investigation focused primarily on price increases and pricing practices.
8 11. According to the Senate Investigation, in the 18months following Sovaldi's approval
9 by the U.S. Food &DrugAdministration (the "FDA") in December 2013, Medicare spent nearly
10 $8.2 billion before rebates on Sovaldi and Harvoni.
11 12. Over that same period, Medicare's monthly spending on hepatitis C treatment
12 increased more than six-fold from $116.4 million inJanuary 2014to $793.2milHon inJune 2015.
13 13. In January 2014, 76% of the Government's expenditures for HCV drugs were for
14 Sovaldi, 9% for Olysio, and 15% for other HCV drugs. ByJune 2015, 82% of the Government's
15 expenditures for HCV drugs were for Harvoni, 14% for Sovaldi, and 4% for other HCV drugs.
16 14. Accordingto Gilead's own financial statements, U.S. sales of Sovaldi and Harvoni,
17 including through publicprogram and private payers, totaled S20.6billionafter rebates during the 21
18 months following Sovaldi's introduction in December 2013.
19 15. In 2014 alone. Medicare and Medicaid combined to spend at least $5.2 billionon
20 Sovaldi and Harvoni before rebates: $4.4 billion for Sovaldi, and more than $800 million for Harvoni,
21 which only gained FDA approval in mid-October of that year.
22 16. Through the first six months of 2015, Medicare paid $4.4 bilHon, before rebates, for
23 Gilead's HCV therapies, compared to just $200 milHon for all other drugs approved to treat HCV.
24 17. Gilead also has a number of HIV medications, including, without limitation,
25 Complera, Stribild, Genvoya, and Descovy. The wholesale acquisition cost ("WAC") of Complera
26 is $20,000 per year, per patient. Gilead's HIV medication Stribild, with a WAC of $28,500 per
27 patient per year, is more expensivethan alternative HIV combination drugs. Moreover, unlike HCV
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1 drugs, which are generally prescribed for a single course oftreatment, Gilead's HIV drugs may be
2 prescribed for the life of the patient.
3 18. Each of Gilead's newest HIV medications, Genvoya (introduced in November 2015)
4 andDescovy (introduced in April 2016), are priced at similarly high levels.
5 C. Gilead's FOCUS Scheme
6 19. Established in 2010, Gilead's FOCUS scheme is aTrojan horse. Gilead's goal in
7 providing money through FOCUS is to influence HealthCare Providers to prescribe Gilead's
8 Relevant Drugs for HCV and HIV positive patients and to protect Gilead's market share against
9 increasing competition.
10 20. Specifically, FOCUS pays Healthcare Providers to test for HIV and HCV and ensure that
11 HIV and HCV positive patients are linked to care, i.e. prescribed Gilead's Relevant Drugs. FOCUS is a
12 commercial funnel, identifying potential customers and influencing prescribers and those in a position
13 to influence prescribers to choose Gilead Relevant Drugs over competitors.
14 21. FOCUS provides remunerations to Healthcare Providers located throughout the United
15 States, and particularly in the Plaintiff States.
16 22. The average amount paidby Gilead through FOCUS is approximately $175,000 for
17 projects involving "discrete activities" that are implemented in a 12-month period. The chief
18 discrete activity (andGilead's primary andmost profitable, self-serving objective for FOCUS) is
19 referred to as "linkage to care." Recipients of Gilead's FOCUSmoney are expected to meet specific
20 metrics that are set primarilyby Gilead's commercialsales division.
21 23. Gilead's primary FOCUS objective, linkage to care, increases the prescription of
22 Gilead's Relevant Drugs.
23 24. The objective ofincreasing the number of prescriptions ofRelevant Drugs is driven by
24 Gilead's commercial affairs department, which hasits ownset of commercial-related FOCUS goals.
25 This objective is so critical to the FOCUS program that managers along with directors in Gilead's
26 commercial affairs department meet and together rank FOCUS recipients into various tiers
27 according to the recipient's success in meeting sales performance goals. This tiered ranking
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1 determines which recipients ofFOCUSmoney will have their financing cut, increased, eliminated,
2 or renewed.
3 25. Thus, through FOCUS, Gilead operates a nationwide scheme to illegally induce and
4 influence prescribers and those in a position to influence prescribers, to write prescriptions for Gilead's
5 Relevant Drugs for the treatment of HCV and HIV.
6 26. FOCUS is specifically designed to capture funds from public investment or third-
7 party reimbursement, such as payments from Medicare, Medicaid, and health insurance.
8 27. Gilead has submitted or caused others to submit false claims for the Relevant Drugs
9 in violation of the FCA and the Plaintiff States' false claims statutes, because Gilead illegally
10 marketed the Relevant Drugs through FOCUS, in violation of the Anti-Kickback Statute and similar
11 statutes applicable to each of the Plaintiff States.
12 28. The Anti-Kickback Statute (and the Plaintiff States' analogous statutes) prohibits a
13 for-profit pharmaceutical company such as Gilead from offering any remuneration, directly or
14 indirectly, to induce health care professionals to prescribe drugs, treatments, or services.
15 29. Compliance with the Anti-Kickback Statute is a prerequisite to the right to receive or
16 retain reimbursement from federal and state-funded health care programs.
17 30. The Anti-Kickback Statute is designed to ensure that physicians make clinical
18 decisions based upon informed, impartial medical judgment unaffected by personal financial motives.
19 Gilead, through its FOCUS program, has knowingly and routinely violated that fundamental
20 principle by creating a captiverelationship with physicians, hospitals, and health centers through the
21 payment of unlawful remuneration, in violationof the Anti-Kickback Statute (and similar statutes
22 applicable to the Plaintiff States).
23 31. Claims submitted by any Healthcare Provider that received FOCUS money, for any
24 of the Relevant Drugs, are tainted by illegal kickbacks that Gilead has paid in violation of the Anti-
25 Kickback Statute and are therefore ineligible for reimbursement by the Medicare Program, Medicaid
26 Program, and any other federal or state-funded health care program.
27 32. Gilead has submitted, or caused others to submit, such kickback-tainted claims.
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1 33. The majority of patients who are prescribed Gilead's Relevant Drugs by Healthcare
2 Providers accepting Gilead's money submitreimbursement requests through federal and state health
3 care programs such as Medicare and Medicaid.
4 34. Each time that Gilead submitted, or caused others to submit, claims to the
5 Government or any Plaintiff State for Relevant Drugs prescribed by or through Healthcare Providers
6 receiving unlawful remuneration tlirough FOCUS, it violated the FCA and the Plaintiff States' false
7 claims statutes.
8 35. As a consequence, the United States and the Plaintiff States have been damaged in a
9 significant amount.
10 36. For each violation, Gilead must pay the entire amount it received from Medicare and
11 Medicaid, without offset for the value of medication received by the patient.
12 37. As set forth herein, Gilead's actions alleged in this Complaint also violate the
13 California False Claims Act, Cal. Gov't Code §§ 12650-12656; Colorado Medicaid False Claims
14 Act, Colo. Rev. Stat § 25.5-4-303.5 et seq.; District of Columbia False Claims Act, D.C. Code § 2-
15 381.01 etseq.\ Florida False Claims Act, Fla. Stat. Ann. §§ 68.081 et seq.; Georgia False Medicaid
16 Claims Act, Ga. Code Ann. § 49-4-168 et seq.; Illinois Whistleblower Reward and Protection Act,
17 740 111. Comp. Stat. § 175/1 et seq. \ Louisiana Medical Assistance Programs Integrity Law, La.
18 Rev. Stat. § 437 et seq.; Maryland False Health Claims Act, Md. Code Ann., [Health-General] § 2-
19 601 et seq.; Massachusetts False Claims Act, Mass. Gen. Laws ch. 12, § 5 e/ seq.; Michigan
20 Medicaid False Claims Act, Mich. Comp. Laws. § 400.601 et seq.; Minnesota False Claims Act,
21 Minn. Stat, § 15C.01 ; Nevada statute concerning Submission of False Claims to State or
22 Local Government, Nev. Rev. Stat. § 357.010 et seq.; New Jersey False Claims Act, N.J. Stat. Arm.
23 § 2A:32C-1 et seq.; New York False Claims Act, N.Y. State Fin. § 187 e/ seq.; North Carolina
24 False Claims Act, N.C. Gen. Stat. § 1-605 et seq.; Rhode Island False Claims Act, R.I. Gen. Laws
25 § 9-1.1-1 et seq.; Tennessee False Claims Act, Tenn. Code Ann. § 4-18-101 et seq.; Texas Medicaid
26 Fraud Prevention Law, Tex. Hum. Res. Code Ann. § 36.001 et seq.; Virginia Fraud Against
27 Taxpayers Act, Va. Code § 8.01-216.1 et seq.; and Washington State Medicaid Fraud False Claims
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1 Act, Wash. Rev. Code § 74.66.005 et seq.
2 38. Based on these provisions, RelatorAllenKuo seeks to recoverall available damages,

3 civil penalties, andother relieffor federal and state-law violations alleged herein.
4
U. PARTIES
5
39. The Relator Allen Kuo is a citizen of California and has been a volunteer at Glide
6
Memorial Church in San Francisco ("Glide") since 2012. As a Glide volunteer, Relator spent his
7
time volunteering in the health clinic's cleanneedle exchange program, bringing patients into the
8
health clinic for HCV and HIV screenings, serving meals in the kitchen, and volunteering at Glide's
9
yearly Legacy Gala.
10
40. In summerof 2015, Relator learned that new ownership (HealthRIGHT 360) had
n
taken control of Glide's health clinic. The health clinic, presently known as the Tenderloin Health
12
Services, provides services related to the screening and treatment of HCV and HIV. Following the
13
change in ownership, Relator saw dramatic increases in Gilead marketing material throughout Glide,
14
including in the offices of clinic staff. Such marketing materials included Gilead-branded posters,
15
Gilead-branded pens, and Gilead-branded pillboxes.
16
41. In the fall of 2016, Relator accompanied a patient to the Tenderloin Health Services
17
clinic to gather informationabout HCV screening. During this visit, the health systems coordinator
18
discussed various treatment options, all ofwhich were Gilead-branded treatments.
19
42. Relator learned that the newly branded-clinic was receiving money through Gilead' s
20
FOCUS scheme.
21
43. Relator undertook a targeted investigationinto what he believedto be improper
22
remuneration that Gilead was providing in violation of the Anti-Kickback Statute. Through his
23
independent investigation, Relator has uncovered non-public information supporting the claims set
24
forth herein. Relator's independent research and investigation has generated information that is
25
independent of and materially adds to any publicly-disclosed allegations and transactions.
26
27
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1 44. Relator is an "original source" of information within the meaning of 31 U.S.C.
2 § 3730(e)(4)(B) and all applicable state statutes for the Plaintiff States. Before filing this action,
3 Relator has voluntarily provided to the Government and the Plaintiff States the information on which
4 the allegations or transactions alleged herein are based.
5 45. Defendant Gilead Sciences, Inc. ("Gilead") is a Delaware corporation with its
6 headquarters and principal offices located at 333 LakesideDrive, Foster City, California, 94404.
7 Gilead is a worldwide company that develops and markets drugs, includingseveral drugs used in the
8 treatment of HIV and HCV that are sold in substantial quantities within this judicialdistrict,
9 including, without limitation, Sovaldi, Harvoni, Epclusa, Emtriva, Viread, Truvada, Stribild, Atripla,
10 Complera, Genvoya, and Descovy (collectively, and with any other drug, pharmaceutical, or biologic
11 manufactured, distributed, or sold by Gilead that was supplied, or for which a prescription was
12 written, by a health care provider receiving improper remuneration from Gilead as alleged herein
13 (the "Relevant Drugs").
14 m. JURISDICTION AND VENUE
15 46. This Court has jurisdiction over the subject matter of this action pursuant to
16 28 U.S.C. § 1331, 28 U.S.C. § 1367, and 31 U.S.C. §§ 3730(b)(1) and 3732, the last of which
17 specifically confers jurisdiction on this Court for actions brought pursuant to 31 U.S.C. §§ 3729 and
18 3730. In addition, 31 U.S.C. § 3732(b) specifically confers jurisdiction on this Court over the state
19 law claims.
20 47. Under 31 U.S.C. § 3730(e), and under the comparable provisionsof the PlaintiffState
21 statutes, there has been no statutorily relevant public disclosure of the "allegations or transactions"
22 in this Complaint. Moreover, whether or not such a disclosure had occurred, Relator would qualify
23 as an "original source" of the information in this Complaint, even had such a public disclosure
24 occurred. Relator has direct and independent knowledge of the information on which the allegations
25 herein are based; such knowledge materially adds to any publicly-disclosed allegations or
26 transactions; and Relator voluntarily provided the information to the Government before filing this
27 action.
28

1 48. This Court has personal jurisdiction over Gilead pursuant to 31 U.S.C. § 3732(a)j
2 which authorizes nationwide seivice of process. Moreover, Gilead maintains minimum contacts with
3 the United States, and it can be found in and transacts business in this District.
4 49. Venue is proper in this District pursuant to 28 U.S.C. §§ 1391(b) and 1395(a), and
5 31 U.S.C. § 3732(a), because Defendant can be found in and transacts business in this District. At all
6 times relevantto this Complaint, Defendantregularly conducted substantial business withinthis

7 District, maintained employees in this District, and made significant sales withinthis District.
8 Defendant maintains its corporate headquarters in this District.
9 50. Many of the predicate acts underlying the false claims allegations herein occurred in
10 this District, and particularly in the Cityand County of SanFrancisco.
11
IV. FEDERAL AND STATE-FUNDED HEALTH CARE PROGRAMS
12
A. Medicare
13
51. Medicare is a federally-funded health insurance program primarily benefitting the
14
elderly. Medicare was created in 1965 when TitleXVIII ofthe Social Security Actwas adopted.
15
52. The Medicare program has four parts: Part A, Part B, Part C, and Part D. Medicare
16
Part A ("Part A"), the Basic Plan of Hospital Insurance, covers the cost ofinpatient hospital services
17
and post-hospital nursing facility care. Medicare Part B, the Voluntary Supplemental Insurance Plan,
18
covers the cost of services performed byphysicians and certain other health careproviders, both
19
inpatient and outpatient, ifthe services are medically necessary anddirectly and personally provided
20
by the provider. Medicare Part C covers certainmanaged care plans. Medicare Part D provides
21
subsidized prescription drug coverage for Medicare beneficiaries.
22
53. Medicare provides benefits for patients with HCV and HIV under Parts B and D.
23
54. Medicare Part B covers a one-time HCV screening test ifit is ordered by a primary
24
caredoctoror health-care practitioner. Outpatient services like office visits, lab tests, and physician
25
services are also covered underMedicare Part B. In some situations. Medicare covers repeat HCV
26
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1 screening once a year if the person is considered high-risk for contracting HCV. A person is
2 considered high-risk for contracting HCV if they meet at least one of the following conditions:
3 • He/she was born between 1945 and 1965;
4 • He/she had a blood transfusion before 1992; or
5 • He/she currently uses illicitinjections drugs, or has a past history of illicit

6 injection drug use.
7 55. A person pays nothing for an HCV test if his or her doctor accepts Medicare
8 assignment, meaning that the provideragrees to accept the cost Medicare has approved for the test
9 as full payment and to not charge the patient above that amount.
10 56. For coverage of other medication needed to treat HCV and HIV, Medicare
11 prescription drug coverage is available under Medicare Part D. Accordingto the AmericanJournal of
12 Managed Care ("AJMC"), all Medicare Part D plans cover Sovaldi, and 98% of plans cover Harvoni.
13 Medicare Part D generally covers the remainingRelevant Drugs.
14 57. The Medicare program is administered through the Department of Health and
15 Human Services ("HHS") and Centers for Medicare and Medicaid Services ("CMS").
16 58. The introduction of Gilead's Relevant Drugs, including, without limitation, Sovaldi
17 and Harvoni, have had a significant and substantial financial impact on Medicare. According to the
18 Senate Investigation, spending under Medicare Part D alone before rebates on Sovaldi in 2014was
19 greaterthan any individual drug paid for by Medicare Part B or Part D programs during 2013. Pre-
20 rebate spendingunder Medicare Part D on Harvonithrough the first six months of 2015 wasgreater
21 than any individualdrug paid for by Medicare.
22 59. In 2014, the Government, through the Medicare program, spent $4.8 bilHon on HCV
23 drugs prior to rebates, of which $31 billion was spent on Sovaldi. The Government, through
24 Medicare, also spent $700 miUion on Harvoni, which had been on the marketfor onlytwelve weeks
25 after the Food and Drug Administration approved it in October2014. According to the report
26 written for the Senate Investigation, Medicare's pre-rebate spending for HCV drugs in 2015 had
27
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1 already reached $4.6 billionby the end ofJune, more than 95% of which was attributable to Gilead
2 drugs ($3.7billionfor Harvoni, and $669 millionfor Sovaldi).
3 60. In the 18 months that Gilead's drugs had been on the market, Medicare monthly
4 spending on HCV treatment increased more than six-foldfrom $116.4 million in January 2014 to
5 $793.2 million in June 2015. Medicare average pre-rebate monthly spending on HCV drugs grew to
6 $765 million duringthe first six months of 2015. Approximately 96% of the Government's spending
7 was for two of Gilead's Relevant Drugs. By way of comparison, Medicare pre-rebate spending on
8 HCV drugs for calendar year 2013 was $393 million, of which $238 million wasspent on direct-acting
9 antivirals (DAAs) (e.g.j Incivek, Olysio, Sovaldi, and Victrelis).
10 B. Medicaid
11 61. Medicaid was created in 1965 under Title XIXof the Social Security Act. Funding for
12 Medicaid is shared between the federal Government and states participating in the program,
13 including all PlaintiffStates. Thus, under Title XIXof the Social Security Act, 42 U.S.C. § 1396 et
14 seq., federal money is distributed to certain states. The states, in turn, provide certain medical
15 services to the poor.
16 62. Federal Medicaid regulations require each state to designate a single state agency
17 responsible for the Medicaid program. The agency must create and implement a "plan for medical
18 assistance" that is consistent with Title XIXand with the regulations of the Secretary of HHS ("the
19 Secretary"). After the Secretary approves the plan submitted by the state, the state is entitled each
20 financial quarter to reimbursement for a percentage of its expenditures madein providing specific
21 types of "medical assistance" under the plan. 42 U.S.C. § 1396b(a)(l).
22 63. Individuals may be "dual ehgible" for both the Medicare program (as the primary
23 insurer) and the Medicaid program (asthe secondary insurer).
24 64. The Plaintiff States provides funding for health care benefits to certain individuals,
25 based either on the person's financial need, employment status, or other factors. To the extent those
26 programs are covered by that State's False Claims Act, those programs are referred to in this
27 Complaint as "state-funded health care programs."
28
^11-
1 65. As set forth in the Committee of Finance's Investigative Report, "the financial
2 impact of Gilead'sline ofHCV drugs on state Medicaid programs has been dramatic." Shortlyafter
3 Harvoni was approved by the FDA, the National Association of Medicaid Directors (NAMD) wrote
4 to Congress on October 28, 2014that "the challengeSovaldi and other new hepatitis C medications
5 pose for the Medicaid program is the intersectionof a high-cost therapy and a potentially large
6 population eligible for therapy."
7 66. According to the Committee of Finance's Investigative Report, the collected data
8 show that outlays for Sovaldi ranked it among the top five pharmaceutical spending items for 33
9 different state Medicaid agencies. Fourteen states reported that Sovaldi was the top pharmaceutical
10 cost for the FFS, MCO, or combined programs. Fifteen more reported that Sovaldi was the second
11 highest cost. Four more states reported that Sovaldi ranked third, fourth, or fifth in their
12 pharmaceutical spending for 2014.
13 67. Even states that benefit fi-om rebates from Gilead have expressed that the rebates are
14 insufficient. The Texas Health & Human Services CommissionMedicaid/CHIP Deputy Director,
15 Andy Vasquez, stated in an August 14,2015 letter to Senators Ron Wyden and Charles E. Grassley:
16 The rebate revenue from manufacturers lessens the impact of second
generation HCV drugs on the state's Medicaid budget. However, given the
17
exorbitant price of these medications, the rebates are insufficient and these
18
drugs jeopardizethe solvency of the state's Medicaid and public health
programs. Manufacturers lowering the price at which these drugs are sold to
19 providers would be more beneficial than rebates to the Texas Medicaid
program and would also benefit its state-funded health program.
20
68. In the absence of acceptable rebate offers from Gilead, and to manage costs of Sovaldi
21
and Harvoni—which command the vast majority of pharmaceutical spending to treat HCV—more
22
than half of the nation's state Medicaid programs, including many of the PlaintiffStates, developed
23
prior authorization ("PA") criteria. These PA criteria restrict access to HCV drugs to control costs.
24
69. Many states, including Plaintiff States, reacted to the high costs of Sovaldi and
25
Harvoni by restricting access to the sickest patients and requiring that patients be under the care of
26
hepatologists or other specialists prior to receiving the drugs.

27
28
-12
1 V. APPLICABLE LAW
2 A. The Federal Anti-Kickback Statute Prohibits a For-Profit Pharmaceutical Company

From Offering Financial or Other Incentives to Induce Health Care Professionals to
3 Prescribe Treatments Or Induce Those in a Position to Influence Prescribers
4 70. Enacted in 1972, and expanded extensively over the past 45 years, the federal health
5 care Anti-Kickback Statute ("Anti-Kickback Statute"), 42 U.S.C. § 1320a-7b(b), arose out of
6 Congressional concern that payoffs to those who can influence health care decisions will result in
7 goods and services beingprovided that are medically unnecessary, of poor quality, or even harmful to
8 a vulnerable patient population. The Anti-Kickback Statute, as set forth in the language of the
9 statute, prohibits illegal kickbacks and other forms of impermissible remuneration.
10 71. The Anti-Kickback Statute also seeks to prevent the overall increase of healthcare
11 costs to federal healthcare programs due unnecessary or over-priced services or items.
12 72. To protect the integrity of federal health care programs from these difficult-to-detect
13 harms, Congress enacted a prohibition against the payment of kickbacks in any form, regardless of
14 whether a particular kickback actually causes overutilizationor poor quality of care—or even if the
15 services or items provided arguably benefit physicians, providers, or patients.
16 73. The Anti-Kickback Statute prohibits any person or entity from makingor accepting
17 payment or other remuneration to induce or reward any person for referring, recommending, or
18 arranging for the purchase of any item for which payment may be made under a federally-funded
19 health care program. 42 U.S.C. § 1320a-7b(b).

20 74. The Anti-Kickback Statute defines impermissible "payments" broadly as including
21 "any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or
22 covertly, in cash or in kind." 42 U.S.C. § 1320a-7b(b)(l). In addition to the more obvious types of
23 remuneration (for example, cash payments, gifts of cars, free vacations), the statute also prohibits
24 less direct or obvious forms of impermissible payments.
25 75. The Department of Health and Human Services ("HHS") Office of Inspector
26 General ("GIG") is tasked with protecting the integrity of Medicare, Medicaid, and other HHS
27 programs, and has offered a great deal of interpretive guidance and has issued regulations concerning
28
-13-
1 marketing activities in the context ofthe Anti-Kickback Statute.In this capacity, the HHS OIGhas
2 expressed particular concern for certain types of kickbacks.
3 76. The HHS OIG has issuedregulations creating "safe harbors" to protect certain
4 payments that otherwise would be prohibited by the Anti-Kickback Statute. The burden is on the
5 party seekingto benefit from the safe harbor to demonstrate that the transaction falls within the
6 protection of the safe harbor.
7 77. In this case, there is no Anti-Kickback Statute safeharborallowing Gilead to provide

8 the remunerationto HealthcareProviders through FOCUS .
9 78. The HHS OIG has specifically expressed concern about payments (in any form,
10 whether direct or indirect) madepurposefully to induce or reward the referral of federal health care
11 business. In a May5, 2003notice, the HHS OIG identified certain arrangements or practicesthat
12 present a heighteneddangerfor abuse. See OIG Compliance Program Guidance for Pharmaceutical
13 Manufacturers, 64 Fed. Reg. 23731, 23734 (May5, 2003). The letter advised that "[pharmaceutical]
14 manufacturers shouldidentify any remunerative relationship betweenitself (or its representatives)
15 and persons or entities in a position to generate federal health care business for the [pharmaceutical
16 manufacturer directly or indirectly."
17 79. The letter states that " [p]ersons or entities in a position to generate federal health
18 care business include, for example, purchasers, benefit managers, group purchasing organizations
19 (GPOs), physicians and certain allied health care professionals, and pharmacists." Id. at 23724
20 80. The letter further advised that, in determining whether a paymentconstitute an illegal
21 kickback:
22 the next step is to determine whether any one purpose of the remuneration
may be to induce or reward the referral or recommendation of business
23 payable in whole or in part by a Federal health care program. Importantly, a
awful purpose will not legitimize a payment that also has an unlawful
24 purpose.
25 Id. at 23724 (emphasis in original).

26 81. The OIG letter identified several "aggravating" factors. They includewhether the
27 payment or arrangement has the potential to:
28
-14-
1 a) Interfere with or skewclinical decision-making, or undermine the clinical

integrity of a formulary process;
2
b) Increase costs to federally-funded health care programs;
3
c) Heighten the riskof overutilization or inappropriate utilization of the
4 product/treatment; or
5 d) Raise patient safety or quality of care concerns.
6 Id. at 23724.
7 82. A pharmaceutical company (in this case Gilead) providing money to Healthcare
8 Providers through its FOCUS scheme implicates the aggravating circumstances identified by the
9 HHS OIG.
10
B. Compliance With the Federal Anti-Kickback Statute Is a Prerequisite to a Provider's
11 Right to Receive or Retain Reimbursement from Federal and State-Funded Health Care
Programs
12
83. Compliance with the Anti-Kickback law is a precondition to participation in federal
13
and state-fiinded health care programs. With regard to Medicare and Medicaid, for example, each
14
participant must sign an agreement with his or her state.
15
84. Although there are variations in the agreements among the states, such agreements
16
typically require the prospective Medicare and Medicaid participant to agree that they will follow all
17
legalrequirements, which include compliance with anti-kickback laws and regulations. In many
18
states, the Medicare and Medicaid claim form itself contains a certificate of compliance with all
19
aspects of the Medicare or Medicaid program, including compliance with federal laws.
20
85. In sum, either pursuant to agreement or certification, the terms set forth in claims
21
forms, or in another manner, those who participate and receive funds through a federal or state-
22
funded health care programmust certifythat they have complied with the applicable federal rules
23
and regulations, including the Anti-Kickback Statute.
24
86. Any party convicted under the Anti-Kickback Statute must be excluded from
25
participating in federal health care programs not allowed to bill for services rendered or items
26
provided) for a term of at least fiveyears. 42 U.S.C. § 1320a-7(a)(l).Even without a conviction, if the
27
28
- 15-
1 Secretary of HHS finds that a participanthas violated the statute, the Secretarymayexclude that
2 person or entity from the federal health care programs for a discretionary period (inwhichevent the
3 Secretary must also direct the relevant State agencies to exclude that participant from the State
4 health program), and mayconsiderimposing administrative sanctions of $50,000 per kickback
5 violation. 42 U.S.C. § 1320a-7(b).
6 87. Thus, compliance with the Anti-Kickback statute and comparable state anti-kickback
7 statutes is a prerequisite to Gilead's right to receive or retain reimbursements from Medicare,
8 Medicaid, and other federal and state health care programs for its Relevant Drugs.
9 88. Claims for Medicare and Medicaid payment relating to Gilead's Relevant Drugs that
10 are tainted by kickbacks prohibited by the Anti-Kickback Statute and similar state anti-kickback
11 statutes are false or fraudulent under the False Claims Act and the false claims acts of the Plaintiff
12 States. Because of its violations of the Anti-Kickback Statute and comparablestate laws, Gilead was,
13 during all relevant times, ineligible to participate in government health care programs, including
14 Medicare and Medicaid. The Government and the PlaintiffStates would not have paid any claimsfor
15 Relevant Drugs prescribed by or through FOCUS had they known of Gilead's unlawful kickbacks,
16 payments and remunerations. See 31 U.S.C. §§ 3729(a) & (b); 42 U.S.C. §§ 1320a-7b(b), (f) & (g).
17
VI. FACT ALLEGATIONS
18
A. Gilead's FOCUS Program is a Nationwide Scheme Targeting Vulnerable Groups
19
89. Beginning on or aboutJanuary 1,2010, Gilead Sciences unlawfully provided money
20
and other remunerations to well over 230 Healthcare Providers that prescribe Gilead's Relevant
21
Drugs. At least one Healthcare Provider that unlawfully received FOCUS money as allegedherein is
22
located in every Plaintiff State. These Healthcare Providers include healthcare organizations,
23
hospitals, health centers, academic institutions, community organizations, primary care clinics, STD
24
clinics, and others across the United States.
25
90. As of 2015, Gilead through its FOCUS scheme paid unlawful remuneration to at least
26
100 Healthcare Providers in eighteen (18) cities across the United States that treat HIV and HCV.
27
28
-16-
1 These HealthcareProviders are in a position to decide betweenGilead's Relevant Drugs and their
2 competitors.
3 91. Gilead paying Healthcare Providers violates the Anti-Kickback Statute. No safe
4 harbor allows Gilead to provide this money and influence prescribers and those in a position to
5 influence prescribers. In 2015, in California alone, Gilead paid unlawful remuneration through its
6 FOCUS scheme to over 15 Healthcare Providers.
7 92. Defendant's monetary payments and other unlawful remuneration continue today to
8 these and other California Healthcare Providers. Such unlawful remuneration is paid to directly
9 influence prescribers and/or those in a positionto influence prescribers to favor Defendant's
10 Relevant Drugs. This money skews clinical decision making and corrupts the doctor-patient
11 relationship.
12 93. Patients who have just been diagnosed with the life altering and life-threatening
13 disease of either HIV/AIDS or HCV are at their most vulnerable. Moreover, prescribers and those in
14 a position to influence prescribers are also especially susceptible to influence because they are
15 responsible for the extremely difficult task of informingpatients of their diagnoses and
16 recommending treatment. Given that HHS OIG has specificallyflagged "skewing clinical decision
17 making" as an aggravating factor as to whether a payment constitutes an illegal kickback, vulnerable

18 populations such as HIV and HCV positive patients are especially entitled to unadulterated and
19 unbiased care.
20 94. Upon information and belief, beginning on or about January 1, 2010, and continuing
21 until present day, Gilead Sciences continues to unlawfully provide money to Healthcare Providers
22 across the United States. These Healthcare Providers are located nationally, and particularly in cities
23 located in each of the Plaintiff States.
24 B. Gilead's Payments Made Through FOCUS Violate the Anti-Kickback Statute Because
They Constitute Remuneration to Entities in a Position to Prescribe or Influence
25 Prescribers ofMedication, and Such Payments Do Not Fall Within One of the Statutory
or Regulatory Safe Harbors
26
27 95. Beginning on or about January 1,2010, every dollar paid to a Healthcare Provider through
28
-17-
1 FOCUS constitutes a remuneration to the institution in violation of the Anti-Kickback Statute.
2 96. Irrespective of how FOCUS money is allegedly designated, these institutions receive
3 substantial financial benefit directly from a for-profit pharmaceutical company that is self-interested in
4 identifying and treating HCV and HIV positive patients with its Relevant Drugs.
5 97. Each institution, whether it is a healthcare organization, hospital, health center, academic
6 institution, or community organization, is in a position to establish policies to influence its doctors and
7 staff.
8 98. Gilead makes it a point to require all prescribers and those in a position to influence
9 prescribers to be aware that Gilead is subsidizing the hospital and paying their doctors. Gilead even goes
10 so far as to honor specific doctors that it pays as "Champion Doctors." As such, each institution accepts
11 Gilead's money knowing that the money comes directly from Gilead.
12 99. To cite one case in point where Defendant through FOCUS successfully influenced
13 hospital leadership and clinic staff, UCLA Health affirmed in response to a July 2015 proposal seeking
14 "$497,905" that the Chief Medical Officer, the Primary Care Executive Committee chairman, a Division
15 of Hepatology doctor, a Professor of Medicine at the Division of Infectious Diseases, the Chief of the
16 Department of Clinical Microbiology, and two members of the IT Medical Executive Committee "have
17 met" regarding Gilead's payment and "support" it.
18 100. Gilead's FOCUS payments undermine and corrupt the clinical integrity of the formulary
19 process to favor Defendant's Relevant Drugs over others when addressing "linkage to care."
20 101. Relator witnessed first-hand how Gilead is able to exert influence over individual health
21 care providers and staff on the frontlines of care. In the fall of 2016, Relator accompanied a patient to
22 the Tenderloin Health Services clinic to gather information about HCV screening. During this visit, the
23 health systems coordinator at the clinic discussed various HCV treatment options, all of which were
24 Gilead-branded treatments.
25 102. Upon information and belief, beginning on or about January 1,2010, and continuing until
26 present day, this practice of top-down influence is the type of institutional influence that Gilead exerts
27 on all recipients of FOCUS money. This trickle-down effect from senior leadership creates an
28
-18-
1 environment within the institution that favors Gilead's Relevant Drugs over competitors.
2 1. FOCUS Payments Subsidize Doctors' Salaries
3 103. Gilead's FOCUS business model is a scheme that creates a captive relationship
4 betvi^een Gilead and those who prescribe or influence prescribers of Gilead's Relevant Drugs. To gain
5 influence over prescribers and those in a position to influence prescribers, FOCUS money is used to
6 subsidize the salaries of doctors and staff.
7 104. For example, in November 2016, the Professor of Medicine at the Division of
8 Infectious Diseases at UCLA Health mentioned in paragraph 99 (the "UCLA Champion Doctor")^
9 confirmed that FOCUS money is used, among other things, to subsidize doctors' and staffsalaries.
10 Particularly troubling was the UCLA Champion Doctor's acknowledgment that FOCUS money
11 wouldno longerbe allowed to subsidize the salaries of prescribers in UCLA's secondyear renewal of
12 FOCUS money. From this statement, it is evident that prior to Gilead's new restriction, FOCUS
13 money was paid directly to subsidize the salaries of prescribers in flagrant violation of the Anti-
14 Kickback Statute.
15 105. As a result of this policy change by Gilead, the UCLA Champion Doctor confirmed to
16 Relator that he elected to become a non-prescribing physician and he was therefore eligible to receive
17 FOCUS money in UCLA's second year. His role then began to be called a "Champion Doctor."
18 106. Irrespective of Gilead's policy change at UCLA Health to no longer allow FOCUS
19 payments to be paid to prescribers, Gilead's subsidizationof any doctors' or staff salariesthrough

20 these FOCUS payments constitutes a direct remuneration to the UCLA Health institution in
21 violation of the Anti-Kickback Statute.
22 107. Moreover, Gilead's FOCUS payment to doctors in the "Champion" role is more
23 problematic than other forms of white coat marketing because Gilead does not merely advertise
24 without disclosing the true nature of the economic relationships between Gilead and providers.
25
26 ^To avoid publicly naming at this time doctors or other personnel at Healthcare Providers who may not
have fully comprehended the illegality of Gilead's kickbacks, only the roles of such doctors or personnel
27 are used in this complaint. Relator will provide the names of such individuals upon request with
appropriate confidentiality protections as the Court may deem just and proper.
28
-19-
1 Rather, Gilead's FOCUS scheme creates a fundamental policy change at the institutional level
2 skewing clinical decision-making and practices in favor of Gilead's Relevant Drugs. Accordingly,
3 Gilead's version of white-coat marketing corrupts an institution from the top-down.
4 108. Specifically, Gilead pays part of the salaries of "Champion Doctors" at Healthcare
5 Providers who are charged with advocating change and exercising administrative discretion across
6 the entire institution. In fact, the UCLA Champion Doctor acknowledged that as a "Champion
7 Doctor" he was charged with meeting various C-suite leaders several times a year, and different
8 hospital leaders on a monthly basis.
9 109. These remunerations by Gilead are intended to increase screenings of HCV and HIV
10 for the purpose of increasing "linkage to care" that results in the prescribing of Gilead's Relevant
11 Drugs. This linkage directly and substantially benefits Gilead at the expense of patients; the
12 Government, which bears the financial burden of funding Medicare Part B, Medicare Part D, and
13 Medicaid; and the taxpayers.
14 110. "Champion Doctors" ordinarily occupy senior positions at hospitals that are
15 recipients of FOCUS money. As a result, subordinate physicians, clinicians, and other providers
16 (such as ordering physicians and nurses) will be influenced in their clinical decision-making to favor
17 Gilead's Relevant Drugs. This leads to the over-prescription of Gilead's Relevant Drugs even when
18 not clinically appropriate, and misallocating Government resources for the direct benefit of Gilead.
19 111. Gilead places itself and its own financial interests and commercial program objectives
20 in the middle of the Healthcare Providers' internal decision-making processes, by which such
21 institutions screen and provide treatment for HIV and HCV positive patients. Gilead's paying
22 "Champion Doctors" compromises clinical decision making for prescribers and those in a position to
23 influence prescribers. Specifically, it makes them biased toward prescribing Gilead's Relevant
24 Drugs.
25 112. Upon information and belief, Gilead fails to report its payments or subsidies of
26 doctors' salaries through FOCUS for inclusion in the Open Payments Database maintained by the
27 Centers for Medicare & Medicaid Services. As required by the Affordable Care Act, the Open
28
-20-
1 Payments Database collects information about payments that drug companies make to physicians
2 and teaching hospitals.
3 113. In another example, atJohns Hopkins University School of Medicine, beginning in

4 and around January 1, 2015, and continuing through April 30, 2017, FOCUS provided $34,650 to pay
5 the salary of a case manager specifically designated to provide linkage-to-care services to persons
6 diagnosed with HCV at the Department's STD Clinic and community health centers in Baltimore,
7 Maryland. Again, since Gilead pays the case manager's salary, Gilead's Relevant medication is more
8 likely to be prescribed even whennot clinically appropriate or economically prudent.
9 114. The payment of doctors' salaries constitutes what the HHS OIG considers to be
10 "aggravating" circumstances that potentially interfere with or skewclinical decision-making. Gilead

11 influences doctors' decision-making bypaying a portion oftheir salaries with FOCUSmoney while
12 they are treating patients or overseeing treating/ordering physicianswho have the ability to prescribe
13 Gilead's Relevant Drugs to treat patients. Bycreating this captive relationship with health care
14 providers and doctors, Gilead's purpose is clear: increase the sales of Gilead's Relevant Drugs by
15 inducing prescribers, or those in a position to influence prescribers, to prescribe and treat patients
16 with Gilead's Relevant Drugs.
17 115. Gilead only pays for screenings of diseases, HIV and HCV, that it also has medication
18 that can be prescribed. Gilead pays no money to ensure linkage to care for anydiseases except those
19 for whichGilead has medications. Gilead's FOCUS schemeonlytargets patients that can become
20 Gilead customers.
21 116. Given the fact that Gilead has many competitors for their HIV and HCV treatment
22 medications, this money paid by Gilead: (a) gives them an unfair commercial advantage over their
23 competitors, (b) illustrates the commercial intent of the program, (c) compromises chnical decision
24 making, (d) jeopardizes patient safety because HIV and HCV positive patients are prescribed
25 defendant's RelevantMedication even when not clinically appropriate or economically prudent, and
26 (e) increases the cost to the federal and state health care programs because Gilead's medication are
27 overprescribed.
28
-21 -
2 until present day, such payment arrangements are typical and representative of the unlawful
3 remunerations that Gilead provides to most, if not all FOCUS money recipients throughoutthe
4 United States. These Healthcare Providers are locatednationally, and particularly in citieslocatedin
5 each of the Plaintiff States.
6
2. FOCUS Payments Subsidize Patient Travel Expenses
7
118. As part of FOCUS, Gilead pays for patient travel to Healthcare Providers receiving
8
FOCUS money. By providing patient travel, Gilead increases the number of patients who are
9
prescribed the Relevant Drugs. This practice explicitly violates the HHS OIG's anti-kickback
10
guidance.
11
119. Upon information and belief, at the Venice Clinic in Los Angeles, California, FOCUS
12
money paid for patient travel to and from medical appointments.
13
120. As another example, in connection with Project Heal at the University of Illinois,
14
FOCUS money was used to payfor patient travel to doctor's appointments. According to an
15
Associate Director at Project Heal (the "Project Heal Associate Director"), during Project Heal's
16
first year receiving FOCUS money, Gilead paid for Chicago Transit Authority ("CTA") cards that
17
were used to pay for patient bus rides to medical appointments.
18
121. Gilead's payment for patient travel in connection with FOCUS violates the Anti-
19
Kickback Statute and comparable statutes applicable in the Plaintiff States.
20
122. The HHS OIG has expressly stated that pharmaceutical companies are not permitted
21
to offer rides to federal health care program beneficiaries. On December 7, 2016, the HHS OIG
22
amended the safe harbors to the Anti-Kickback Statute. These rules updated "the existing safe harbor
23
regulations and enhance[d] flexibility for providers and others to engage in health care business
24
arrangements to improve efficiency and access to care while protecting programs and patients from
25
fraud and abuse." (See OIG Advisory Opinion: Medicare and State Health Care Programs: Fraud and
26
27
28
-22-
1 Abuse; Revisions to the Safe Harbors Under the Anti-Kickback Statute and Civil Monetary Penalty
2 Rules Regarding Beneficiary Inducements, 81 Fed. Reg. 88368 (Dec. 7, 2016))
3 123. Specifically, the OIG issued a regulation creating a safe harbor to protect certain "free
4 or discounted local transportation services that meet specified criteria." {Id. at 88368.) However, to
5 qualify under the new safe harbor, the transportation must be made by an "eligible entity." (81 Fed.
6 Reg. at 88380.) The OIG intended an "eligible entity" to exclude "individuals or entities ... that
7 primarily supply health care items (including, but not limited to . . . phaiTnaceutical companies)."
8 {Id.) Pharmaceutical companies are explicitly excluded because they are "more likely to offer
9 transportation to their patients in exchange for referrals." {Id.; 42 C.F.R. 1GO 1.952(bb) & note
10 thereto)
11 124. The OIG opinion states, in pertinent part, that "allowing individuals and entities that
12 primarily supply health care items to offer transportation to patients presents a heightened risk of
13 using such transportation to generate referrals, potentially in a way that increases costs for patients
14 and Federal health care programs." (81 Fed. Reg. at 88381.) Further, the OIG has stated that:
15
Offers by a pharmaceutical manufacturer to transport patients to physicians
16 who are the manufacturer's referral sources could influence that referral
source's decision to prescribe one drug over another. For example, a
17 physician might be influenced to prescribe an expensive branded infusion
drug in preference to a less expensive drug, if the manufacturer of the more
18 expensive drug offered transportation to the patients who received it so they
could get to their appointments with the physician. Such a program could both
19 influence the physician to choose a particular item and increase costs to
Federal health care programs—two factors cited by Congress to consider
20 when developing safe harbors—^without necessarily increasing quality or
patient choice.
21
{Id.)
22
125. Gilead's conduct, including the payment for rides through their FOCUS scheme,
23
contravenes the OIG Guidelines and violates the Anti-Kickback Statute. Gilead knew about these laws,
24
rules and guidelines, but the company willfully violated them to influence patients, prescribers, and
25
those in a position to influence prescribers to increase the sales of its Relevant Drugs.
26
27
28
-23-
1 126. Gilead's paying for patient travel Healthcare Providers that are federal health care
2 program beneficiaries increases the risk of over-utilization or mis-utilization of Gilead's Relevant
3 Drugs, because treating providers are more likely to prescribe Gilead's Relevant Drugs to patients.
4 Paying for patient travel increases costs to federal health care programs because it skews clinical
5 decision-making and clinical integrity for treating providers. Such improper remuneration
6 jeopardizes patient safety and quality of care because FOCUS money increases and is more likely to
7 be renewed based on the total number of patients screened and linked to care (i.e., prescribed
8 Gilead's Relevant Drugs).
9 127. Gilead's conduct in this regard directly violates the OIG transportation guidelines and
10 therefore violates the Anti-Kickback Statute.
12 until present day, such patient escort arrangements are typical and representative of the unlawful
13 remunerations that Gilead provides to most, if not all recipients of FOCUS money throughout the
14 United States. These Healthcare Providers are located nationally, and particularly in cities located in
16 3. FOCUS Payments Fund Modifications to Providers' Medical Soft>vare
17 129. As stated in the FOCUS program's "Four Pillars of Routine Screening," Gilead views
18 Electronic Medical Record ("EMR") modification to constitute an integral part of its efforts to identify
19 potential patients for its Relevant Drugs. Gilead believes that EMR modification promotes the
20 normalization and sustainability of FOCUS's first pillar to integrate testing into normal clinic
21 workflow by prompting for HCV and HIV testing, automating processes, populating lab-orders, and
22 tracking performance.
23 130. In practice, Gilead requests and pays recipients of FOCUS money to implement
24 software modifications to their existing EMR systemto promote aggressive "opt out" HCV and HIV
25 testing, often beyond the scope of what is recommended for screening by the Centers for Disease
26 Control and Prevention (CDC).
27
28
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1 131. Through FOCUS, Gilead pays for hospitals and other providers to modifytheir
2 existing EMR systems with the goal of castingthe widest possible net to identify patients to use
3 Gilead's Relevant Drugs. Gilead does so without regard for patient safety, and for the primary
4 purpose of generating sales of Gilead's Relevant Drugs, at the expense of federal and state health
5 care programs.
6 132. Gilead has a significant financial interest in paying for EMR customization. In
7 particular, Gilead pays for EMR customization so that it provides an "opt-out" mechanism for
8 testing and produces automated orders for HCV and HIV testing, thus ensuring the maximum
9 number of future customers can be identified and linked to care. This is harmful to patients because
10 those who are not at risk of HCV or HIV and not needing to be tested are still nonetheless tested
11 because of FOCUS' emphasis on screenings and onerous opt outs.
12 133. By payingfor EMR customization and upgrades, Gilead provides unlawful
13 remuneration in violation of the Anti-Kickback Statute and deepens the Healthcare Providers'
14 captive relationship with Gilead.
15 134. Gilead's payment for EMR modification is an aggravating circumstance under HHS
16 OIG regulations and guidelines. First, by instituting an aggressive "opt-out" mechanism for testing
17 and creating an automated order for HCV and HIV testing, Gilead suppresses and limits clinical
18 decision-making by doctors as to whether ordering such a test is clinically appropriate, based on
19 each patient's unique circumstances. Unless there is an "opt-out," every patient is automatically
20 ordered to receive an HCV and HIV test, regardless of whether the patient is at-risk for these
21 diseases, and whether paying for such tests by federal and state funds is cost-efficient.
22 135. This suppression ofclinical decision-making is markedly evident in UCLA Health's

23 2015 application to Gilead's Request for Full Proposal. In response to Gilead's request for details on
24 how UCLA's project model is alignedwith and will address the first "Pillar of Routine Screening"
25 for "Testing integrated into normal clinic or work flow," UCLA stated:
26 We propose to fully integrate testing into clinic flow by automating the process of
patient identification and test ordering. The electronic medical record system willhave a
27
testing algorithm incorporated such that patients meeting the eligibility criteria (age, no
28
-25-
1 prior test) will automatically have an HCV test added to the visit order of laboratory
tests. The provider will have an opportunity to opt-out of HCV testing, but we hope that
2
the inclusion of a 'Best Practice Advisory' similarto others included in the electronical
3
medical record system will help to normalize the process and promote uptake.
Furthermore, rather than staffing the testing process or using processes not already
4 included within the health system, m hope toreinforce theidea that HCVscreening is not
something exceptionalfrom otherservices ojfered. These changes will help to reinforce
5
providerperceptions that HCVscreening is a routineparty ofcarefor ^hahy-boomers\ which
6
willhelp improve efficiency of the test order.
7 136. This so called "Best Practice Advisory" adopted by the institution to meet Gilead's
8 "first pillar" clearlyinterferes with clinical decision-making because it dissuades the providers from
9 exercisinghis/her own professional medicaljudgment as to which patients should be screened.
10 137. In addition, the likelihood of a provider choosing to "opt-out" of testing is inherently
11 low, because the renewal of FOCUS money is closely tied to specific deliverables and results of the
12 prior year. Therefore, patients who should not be tested for HCV and HIV are still tested nonetheless
13 because Healthcare Providers receiving Gilead's money have a financial incentive to get as many
14 tests done as possible in a calendar year to ensure future money through FOCUS.
15 138. Upon information and belief, Healthcai'e Providers understand that the more tests they
16 give, the greater likelihood that Gilead will renew or increase FOCUS money to them.
17 139. Gilead's paying for EMR modifications, including the establislmient of an aggressive
18 opt-out testing protocol, increases costs to federal health care programs. Medicare Part B covers one
19 time HCV and HIV screening tests if they are ordered by a primary care doctor or health-care
20 practitioner.
21 140. Gilead's EMR modifications increases the number of potential HCV and HIV
22 treatment candidates—while simultaneously creating a large financial burden on Medicare and
23 Medicaid, which pays for such screenings—all without physician input into whether such tests are
24 actually appropriate under the circumstances.
26 until present day, such arrangements are typical and representative of the unlawfiil remunerations that
27 Gilead provides to most, if not all recipients of FOCUS money throughout the United States. These
28
-26-
1 Healthcare Providers are located nationally, and particularly in cities located in each of the Plaintiff
2 States.
3
4. FOCUS Payments Provide Health Care Providers With Other Unlawful
4 Remuneration
5 142. In addition to the foregoing, upon information and belief, Gilead pays or provides
6 personnel to facilitate the writing of prescriptions for Gilead's Relevant Drugs at Healthcare
7 Providers that receive FOCUS money.
8 143. According to the UCLA Champion Doctor, outside of expressly using FOCUS funds
9 to pay for treating physicians, Gilead places no other restrictions on the use of FOCUS funds. These
10 funds can be used for a wide range of expenses including but not limited to the salaries for staff (i.e.,
11 treatment coordinators, data analysts, nurses, etc. \ indirect administrative costs, dissemination of
12 program results, program and lab supplies, upgrades to electronic medical records software and other
13 lab equipment, transportation vouchers, and even rent.
14 144. Similarly, to increase the likelihood that a Healthcare Provider receives FOCUS
15 money, FOCUS Regional Leads, who work very closely with each entity on their request for money,
16 instruct them to modify the descriptions of certain line items to make them appear to be legitimate
17 uses despite knowing the funds will in-fact be used for impermissible expenses.
18 145. The UCLA Champion Doctor, who worked very closely with FOCUS Regional Lead
19 Rene Bennett to prepare UCLA's request for money, expressed his personal belief that FOCUS
20 coordinators' own success at Gilead is dependent on FOCUS money being provided to recipients.
21 146. In that same vein, the Project Heal Associate Director told Relator that the FOCUS
22 Regional Lead she worked with will often modify a line item request to pass FOCUS's review
23 committee despite the FOCUS Regional Lead knowing the money would not be used for those
24 specific items.
25 147. This egregious practice of FOCUS Regional Leads "doctoring" budgets described by
26 the Project Heal Associate Director, despite knowing the Healthcare Provider's actual intended use
27
28
-27-
1 may constitute an unlawful remuneration, establishes Gilead's direct knowledge that the money is
2 being spent on impermissible items.
3 148. Upon information and behef, beginning on or about January 1, 2010, and continuing
4 until present day, such arrangementsare typical and representative of the unlawfulremunerations that
5 Gilead provides to most, if not all, Healthcare Providers receiving FOCUS money throughout the
6 United States. These Healthcare Providers are located nationally, and particularlyin cities located in
8 C. Commercial Affairs Drive Gilead's FOCUS Scheme
9 149. Gilead is a multi-billion-dollar, Fortune 500 company with annual revenues exceeding
10 $30 billion per year. Gilead's success is driven byits HIV andHCV drugfranchises. Gilead has a
11 sophisticated internal legal staff The company was well aware of its obligations under the Anti-
12 Kickback Statute, the FCA, and the analogous state statutes applicable in the PlaintiffStates. To
13 furtherenrich themselves at the expense of the Government and doctor-patient relationships, Gilead
14 knowingly and willfully violated the law to increase the sales of its Relevant Drugs and boost its
15 profits.
16 150. Although FOCUS is purported to fall under Gilead's Government Affairs Department,
17 Relator's investigation has uncovered non-public aspects of the scheme that are clearly driven by
18 commercial sales metrics that is independent ofand materially adds to any publicly-disclosed allegations
19 and transactions. The fact that Gilead's Commercial Affairs department sets commercial goals that are
20 used to determine the distribution of FOCUS funds violates HHS OIG restrictions because the HHS
21 OIG has specifically expressed concern about payments (in any form, whether direct or indirect) made
22 purposefully to induce or reward the referral of federal health care business. {See OIG Compliance
23 Program Guidance for Pharmaceutical Manufacturers, 64 Fed. Reg. 23731, 23734 (May5, 2003).)
24 151. Gilead is clearly self-interested in what the HealthcareProviders prescribe to HIV and
25 HCVpositive patients. Moreover, because HIVand HCV make up the overwhelming majority of
26 Gilead's annual revenue, there is an extremely strong commercial motivation to maintain or increase
27 its market share for their HIV and HCV drug franchises.
28
-28-
1 1. Conforming to Gilead's Scheme With an Emphasis on "Linkage to Care"
2 152. FOCUS money is not without restrictions. Rather, this money comes with strings, and
3 these strings are expressly dictated by Gilead.
4 153. Before receiving FOCUS money, Gilead requires a Healthcare Provider to complete a
5 Request for Full Proposal wherein the applicant is required to describe exactly how each applicant
6 intends to conform to Gilead's version of best practices for identifying, screening, and linking patients
7 to care.
8 154. In short, Gilead requires conformity by each institution to Gilead's own FOCUS project
9 model in exchange for receiving money. This exertion ofinfluence over each Healthcare Provider creates
10 a heightened danger for abuse in favor of Gilead's own business interests.
11 155. Gilead makes billions each year through sale of its HCV drugs. Given Gilead's dominant
12 though decreasing market share for HCV treatment, Gilead's primary objective through FOCUS is
13 ensuring "linkage to care." This is essential to protect market share and corresponding revenue.
14 156. Gilead's intent to induce or reward the referral or recommendation of business is
15 demonstrated through the "Linkage to Care" section of Gilead's Request for Proposal wherein applicants
16 are asked to dedicate more than tM'ice the length compared to any other section to describe how patients
17 identified with HCV will be referred to and linked to care.
18 157. Specifically, Gilead declares in its Request for Proposal that "FOCUS emphasizes strong
19 linkage to care in all partnerships. Please describe how you are proposing to identify and link individuals
20 with HCV to care. FOCUS defines linkage to care (LTC) as at a minimum, a first medical appointment
21 that was kept within 90 days. Describe how you will track each patient to ensure referral for and linkage
22 to care ensuring that at least the first and second medical appointments are kept. Describe how you will
23 use your Electronic Medical Record to facilitate identification, linkage, tracking, and confirmation of
24 care. Please provide a visual flow diagram of your proposed LTC plan."
25 158. Linkage to care is so critical to FOCUS that Gilead demands Healthcare Providers in
26 Gilead's Request for Proposal form not only write twice as much about their linkage to care strategy as
27 any other component, but also prepare a "visual flow diagram."
28
-29-
1 159. As one example, in response to Gilead's request for details on how UCLA's project model
2 is aligned with and will address the "Linkage to Care," UCLA's 2015 proposal states in part:
3 The Hepatitis C treatment coordinator—a clinical nurse with experience in patient case
management—will receive specific training in the clinical management of HCV,
4
treatment indications (and contraindications), and patient scheduhng, and will work
5
closely with hepatology and infectious disease services. Positive HCV results will be
triaged (through the EMR) to the provider as well as the treatment coordinator....
6
The treatment coordinator will also develop and ensure that all those notified of positive
7 HCV results receive a patient-centric information packet/support tool including
information on what test results mean, expectations, next steps, available treatment
8
options, as well as the coordinator's contact information. After the notification process is
9 complete, the treatment coordinator will ensure that the patient is referredfor HCV care
and an appointment has been set with the hepatology or infectious diseases clinic....
10
{See Exhibit A, pp. 11-12, emphasis added.)
11
160. As evidenced by UCLA's response, one of the key responsibilities of the Hepatitis C
12
treatment coordinator is ensuring the patient is referred to a specialist (hepatology and/or infectious
13
disease) who can prescribe HCV medications.
14
161. Because treatment coordinators are aware of Gilead paying for tests, they will be
15
influenced to favor defendant's Relevant Drugs when discussing treatment options with HCV positive
16
patients, consistent with Relator's first-hand experience at the Tenderloin Health Services clinic.
17
162. UCLA Health comprises anumber of hospitals and an extensive primary care network in
18
the Los Angeles region.
19
163. Upon information and belief, all patients screened for HCV at UCLA Health are referred
20
to specialists within the UCLA Health network.
21
164. Upon information and belief, the specialists within the UCLA Health network are aware
22
of the money given by Gilead through FOCUS and are thereby influenced to prescribe Gilead HCV
23
medication over alternative treatments.
24
165. Upon infomiation and belief, beginning on or about January 1, 2010, and continuing
25
until present day, such referrals and linkage to care arrangements and resulting prescriptions of
26
Gilead's Relevant Drugs are typical and representative of the influence exerted through the unlawful
27
28
-30-
1 remuneration that Gilead provides to most, if not allFOCUS recipients throughout the United States.
2 These Healthcare Providers are located nationally, and particularly in cities located in each of the
3 Plaintiff States.
4 2. Gilead's Commercial Department Ranks or "Tiers" Healthcare Providers

Receiving FOCUS Funds Based on Commercial Sales Goals and Prioritizes FOCUS
5 Funds to Those Providers That Earn Higher Tier Rankings
6 166. Gilead's commercial sales department uses the FOCUS Program as a Trojan horse with
7 the specific intention to drive up sales of Relevant Drugs and maintain Gilead's market share.
8 167. According to Relator's intei"view withLora Branch, a FOCUS Regional Lead in Chicago,
9 Gilead ranks its FOCUS Healthcare Providers that receive money into tiers, with tier 10 being the highest
10 ranking. Healthcare Providers with higher tier rankings have priority to receive FOCUS funds or have
11 money given to them in the future.
12 168. Ms. Branch confirmed to Relator that important to an institution's tier ranking are the
13 percentage and total number of patients who are screened and subsequently "linked to care" (i.e.
14 prescribed Gilead's Relevant Drugs) from that institution. Ms. Branch further acknowledged that these
15 performance benchmarks are driven by Gilead's commercial goals for FOCUS established by Gilead's
16 commercial sales department.
17 169. Ms. Branch confessed that FOCUS program managers, together with executives in
18 Gilead's commercial sales department, rank FOCUS Healthcare Providers into various tiers
19 according to each institution's performance in meeting these commercial sales goals.

20 170. The number of Gilead's Relevant Drug prescriptions by a FOCUS recipient determines
21 whether Gilead elects to provide future FOCUS money. This is disclosed at the onset to all Healthcare
22 Providers.
23 171. For example, under the "Total Awards" section of Gilead's Request for Proposal Form,
24 Gilead reminds Healthcare Providers that Gilead "will award a limited number of partnerships with the
25 option to submit a proposal for year two funding depending on the results ofyear one" "Linkage to
26 care" is important to whether or not the second-year results in more money from Gilead.
28
. -31 -
until present day, the ranking of FOCUS recipients into tiers is representative of Gilead's commercial
intent to most, if not all, Healthcare Providers receivingFOCUS moneythroughout the United States.
These health care providers are located nationally, and particularly in cities located in each of the
4 Plaintiff States.
5 3. FOCUS Praised by Gilead's Chief Operating Officer for Driving Sales
6 173. Gilead is losing its once overwhelmingly dominant HCV market share as competitors
7 begin to introduce alternative HCV treatments.
8 174. Through FOCUS, Gilead entrenches itself with Healthcare Providers who receive money
9 from Gilead through FOCUS. In exchange, Gilead inserts itself on the "frontlines" of treatment when
10 these new patients test positive for HCV or HIV/AIDS.
11 175. Gilead's Commercial Affairs department relies upon FOCUS so much in protecting
12 Gilead's HCV drug market share that during a quarterly earnings call in July 2017, Chief Operating
13 Officer Kevin Young—in response to an investor question concerning Gilead's sustainability in the HCV
14 market—"praised Gilead's FOCUS Program" for having "increased the number of patient testing,
15 especially among baby boomers" {i. e., thereby increasing Gilead's "linkage to care" goal under FOCUS
16 and thereby mitigating the downward trend resulting from the decreased market for Gilead's HCV
17 drugs).
18 176. Gilead creates a captive relationship between themselves and all Healthcare Providers
19 receiving FOCUS money. In exchange for giving money, Gilead induces prescribers, and those in a
20 position to influence prescribers, to favor Gilead's Relevant Drugs even when alternatives are readily
21 available, effective, and less expensive.
22 177. The illegal kickback enterprise scheme Gilead perpetrates through FOCUS increases the
23 costs of HCV and HIV treatment under federal and state healthcare programs.
24 178. The illegal kickback enterprise scheme Gilead perpetrates through FOCUS results in
25 unnecessary, potentially harmful over-prescription or mis-utilization of Gilead's Relevant Drugs
26 contrary to the interests of patient health and safety.
27 179. The illegal kickback enterprise scheme Gilead perpetrates through FOCUS also
28
- 32 -
undermined the policies underlying Medicare Part B, Medicare Part D, and Medicaid by unlawfully and
significantly increasing financial burdens of the State and Federal health care programs paying for HCV
and HIV screenings when not clinically appropriate and treatments for Gilead's expensive Relevant
4 Medications.
5 180. The purpose and effect of Gilead's FOCUS money given to Healthcare Providers is to
6 increase prescriptions for its Relevant Drugs, as evidenced by the following: (a) Gilead has high market
7 share for both HIV and HCV treatment; (b) FOCUS money is predicated on Healthcare Providers
8 ensuring more patients are screened and then, above all else, linked to care {i.e., prescribed Relevant
9 Drugs); (c) FOCUS money identifies potential Gilead customers and influences prescribers and those in
10 a position to influence prescribers to choose Gilead's Relevant Drugs; (d) the involvement and influence
11 of Gilead's commercial affairs department on the FOCUS program demonstrates that the FOCUS
12 program is used to protect Gilead's market share in the HCV and HIV markets; and (e) funding
13 restrictions bar any discounts for Gilead's Relevant Drugs, meaning the money can only be used to find
14 new customers for Gilead and to ensure those customers are given care, not that the State or Federal
15 health care programs get a discount for reimbursement for that care when charged for Gilead's expensive
16 Relevant Drugs.
17 181. By the end of the third quarter of 2015, Gilead caused health care providers receiving
18 remuneration under FOCUS to conduct a total of approximately 2 million HIV tests and 200,000 HCV
19 tests.
20 182. By the third quarter of 2015, FOCUS allowed Gilead to identify 15,000 individuals
21 diagnosed with HIV, with 80% of them "linked to care." (Exhibit B, p. 9.) Upon information and belief,
22 Relator believes that most, if not all, of those linked to care were prescribed the use of Gilead's Relevant
23 Drugs with assistance and reimbursement by the federal or state health care programs {e.g., Medicare or
24 Medicaid). Accordingly, Gilead's revenues and profits increased at the expense of both Plaintiff States
25 and the federal government's expense.
26 183. In the same third quarter of 2015, FOCUS enabled Gilead to identify 15,000 HCV-
27 positive patients. Upon information and belief, approximately 80% of these patients were "linked to
28
-33 -
1 care." Upon information and belief,most, if not all, of those linked to care used Gilead's Relevant Drugs
2 with assistance from Medicare and Medicaid, thereby increasing Gilead's revenues and profits at the
3 Government's expense.
4 184. Through FOCUS, Gilead creates a defacto commercial pipeline to generate revenue for
5 its most profitable drug therapy treatments, at the expense of federal and state health care programs.
6 Gilead's payments tiirough FOCUS violate the Anti-Kickback Statute and comparable statutes
7 applicable for the Plaintiff States. Any claims submitted to Medicare or Medicaid for Relevant Drugs
8 prescribed by or thi'ough health care providers receiving Gilead's FOCUS are therefore false claims
9 within the meaning of the FCA and the state false claims acts of the Plaintiff States.
10 185. Upon informationand belief, beginning on or about January 1,2010, and continuinguntil
11 present day, such return on investment analysis, market/financial analysis, or otherwise is typical and
12 representative of Gilead's commercial intent for FOCUS. These Healthcare Providers are located
13 nationally, and particularly in cities located in each of the PlaintiffStates.

14 D. Gilead's Violations of the Anti-Kickback Statute Cause Over-Utilization and Mis-
Utilization of the Relevant Drugs
15
16 186. Whilethere are manyinstances whenHCV medication is appropriate, alternative

17 medications to the Relevant Drugs are readily available, competitively priced, and may cause fewer
18 or less severe side-effects in certain patients.
19 187. For example, Harvoni, Gilead's blockbuster HCV treatment, currently costs $94,500
20 for a 12-week treatment. There aremany circumstances where, despite a patient testing positive for
21 HCV, prescribing Gilead's HCV medication Harvoniis not clinically appropriate. For example,
22 patients with a historyof hepatitis B, liverproblems other than hepatitis, kidney disease, HIV, or
23 heart rhythm problems shouldnot be prescribedHarvoni. Patients undergoing dialysis also should
24 not be prescribed Harvoni.
25 188. Some patients experience severe side effects from Harvoni, includingfatigue,
26 headache, nausea, diarrhea, insomnia, asthenia, cough, myalgia, dyspenea, irritability, and dizziness.
27
28
-34-
1 189. In addition, patients taking amiodrone, Atripla (efavirenz, emtricitabine, and

2 tenofovir), digoxin (digitalis), other drugs to treat hepatitis C, such as simeprevir (Olysio),
3 rosuvastatin, St. John's wort, Stribild, tenefovir when used in combinationwith atazanavir,
4 darunavir, lopinavir, or ritonavir, seizure medicine such as carbamezepine, oxcarbazepine,
5 phenobarbital, phenytoin, stomachacidreducers-cimetidine, esomeprazole, femotidine,
6 lansoprazole, nizatidine, omeprazole, pantoprazole, ranitidine, and tuberculosis medicine such as
7 rifabutin, rifampin, and rifapentine should not be prescribed Harvoni.
8 190. The combination of Harvoniwith the anti-viral mediation Ribavarin is not clinically
9 appropriate for patients with severekidney disease, a hemoglobin bloodcelldisorder such as sickle-
10 cell anemia or thalassemia, if pregnant, or for menwho are sexually active with someone who is
11 pregnant.
12 191. Similarly, Sovaldi can cause fatigue, headache, nausea, insomnia, pruritus, anemia,
13 asthenia, rash, decreasedappetite, chills, influenza-like illness, prexia, myalgia, irritability and
14 diarrhea in some patients.
15 192. When Gilead launched the FOCUS program in 2010, Gilead was the solecompany
16 offering a possible cure for hepatitis C and thus possessed high market share in the relevant market.
17 As such, a provider's options were limited, and indeed manyclinicians chose no treatment, given
18 side effects and risks associated with Gilead's Relevant Drugs. To influence providers to prescribe
19 Gilead's Relevant Drugs, Gilead provided money through FOCUSto doctors' offices, hospitals, and
20 clinics by making them so called "partners."
21 193. Since the introduction of Gilead's Relevant Drugs, other drug companies have
22 entered the market and offer alternative products, many of which are significantly less expensive but
23 equally effective. Many of these competitive products also have fewer and less serious effects.
24 194. Alternativesto Gilead's Relevant Drugs include, but are not limited to, ViekiraPak by
25 AbbieVie Inc.; Zepatier by Merck & Co., Inc.; Epizicom by GlaxoSmithKline; Evotaz by Bristol-
26 Myers Squibb; and PrezcobixbyJanssen Therapeutics.
27 195. Given the fact that alternative medications are competitivelypriced and may cause
28
-35-
1 fewer or less serious side effects in some patients, it is likely that money provided by Gilead is
2 causing prescribers to treat with Gilead's Relevant Drugs, even when not clinically appropriate.
3 196. Because Gilead has tainted the doctor-patient relationship through unlawful
4 remunerations, it is likely that even when not clinically appropriate or economically prudent, doctors
5 will overprescribe Gilead's Relevant Drugs to patients despite the availability of competitively priced
6 alternative medications which may cause fewer or less serious side effects in some patients.
7 197. Upon information and belief, Gilead knowingly and willfully used the FOCUS
8 program to pay unlawful remuneration to providers for the primary purpose of protecting its market
9 share, knowing that competitors offered, or would soon offer, alternatives to the Relevant Drugs.
10
Count I
11 False Claims Act
31 V.S.C.M3729yetseq.
12
198. Relator realleges and incorporates by reference all foregoing allegations as though
13
fully set forth herein.
14
199. This is a claimfor treble damages and penalties under the False Claims Act, 31 U.S.C.
15
§ 3729, etseq.y as amended.
16
200. Through the acts described above, Defendant knowingly, intentionally, and willfully
17
provided improperremunerationto various health care providers through the FOCUS program with
18
the intent to increase commercial sales of Gilead's Relevant Drugs, in violation of the Anti-Kickback
19
Statute.
20
201. Because of Defendant's violations of the Anti-Kickback Statute, Defendant was not
21
entitled to be paidby the Government—through any federally funded health careprogram,
22
including, without limitation. Medicare and Medicaid—for the provision of Relevant Drugs provided
23
(or whose prescriptions were written) by any health care providerreceiving improper remuneration
24
from Gilead as alleged herein.
25
202. Through the acts described above, Defendant knowingly presented, or caused to be
26
presented, false or fraudulent claimsfor payment of Defendant's Relevant Drugs, HCV/HIV
27
28
-36-
1 screening, and prescription-related medication, items, and services to the United States Government
2 for payment or approval.

3 203. Relator cannot at this time identify all of the false claimsfor payment that were caused
4 by Defendant's conduct. The false claims were presented by numerous separateentities across the
5 United States. Relator has no control over, or dealings with, such entities, and has no access to the
6 records in their possession.
7 204. The Government, unaware of the falsity of the records, statements, and claims made
8 or caused to be made by Defendant, paid and continues to pay the claims that the Government would
9 not have paid but for Defendant's illegal conduct.
10 205. Byreason of Defendant's acts, the United States has been damaged, and continues to
11 be damaged, in substantial amount to be determined at trial.
12 206. Additionally, the United States is entitled to a maximum penalty of up to $21,916 for
13 each and every violation alleged herein.
14
Count II
15 California False Claims Act
Cal. Gov't Code §§ 12650-12656
16
207. Relator realleges and incorporates by reference allforegoing allegations as though
17
18
208. This is a claim for treble damages and penalties under the California False Claims Act.
19
209. Through the acts described above. Defendant knowingly, intentionally, and willfully
20
provided improper remuneration to various health care providers through the FOCUS program with
21
22
Statute.
23
24
entitled to be paidby the State of California—through any state-funded program, including, without
25
limitation, Medicaid—forthe provision of Relevant Drugs provided (or whose prescriptions were
26
written) by any health care provider receivingimproper remuneration from Gilead, as alleged herein.
27
28
-37-
1 211. Through the acts described above, Defendant knowingly presented, or caused to be
2 presented, false or fraudulent claims for paymentof Defendant's Relevant Drugs, HCV/HIV
3 screening, and prescription-related medication, items, and services to the State of California for
4 payment or approval.
6 by Defendant's conduct. The false claims were presented by numerous separateentities across the
7 State of California. Relator has no control over or dealings with such entities and has no access to the
9 213. The State of California, unaware of the falsity of the records, statements, and claims
10 made or caused to be made by Defendant, paid and continues to pay the claims that the State of
11 California wouldnot have paid but for Defendant's illegal conduct.
12 214. Byreason of Defendant's acts, the State of Californiahas been damaged, and
13 continues to be damaged, in substantial amount to be determined at trial.
14 215. Additionally, the State of California is entitled to a statutory penalty for each and
15 everyviolation alleged herein to be determined bythe Court in accordance with the relevantstatutes.
16
Count III
17 Colorado Medicaid False Claims Act
Colo. Rev. Stat § 25.5-4-303.5 etseq.
18
19
20
217. This is a claim for treble damages and penalties under the Colorado Medicaid False
21
Claims Act.
22
23
24
25
Statute.
26
27
28
-38-
1 219. Because of Defendant's violations of the Anti-Kickback Statute, Defendant was not
2 entitled to be paid by the State of Colorado—through any state-funded program, including, without
3 limitation, Medicaid—for the provision of Relevant Drugs provided (or whose prescriptions were
4 written) by any health care providerreceiving improperremunerationfrom Gilead, as alleged herein.
5 220. Through the acts described above. Defendant knowingly presented, or caused to be
6 presented, false or fraudulent claims for payment of Defendant's Relevant Drugs, HCV/HIV
7 screening, and prescription-related medication, items, and services to the State of Colorado for
9 221. Relator cannot at this time identify all of the false claims for payment that were caused
10 by Defendant's conduct.The false claims were presented by numerous separateentities across the
11 State of Colorado. Relatorhas no control over or dealings with such entities and has no access to the
13 222. The State of Colorado, unaware of the falsity of the records, statements, and claims
15 Colorado would not have paid but for Defendant's illegal conduct.
16 223. By reason of Defendant's acts, the State ofColorado has been damaged, and
18 224. Additionally, the State of Colorado is entitled to a statutory penalty for each and every
19 violation allegedherein to be determined by the Court in accordance with the relevant statutes.
20
CoimtrV
21 Connecticut False Claims Act
Conn. Gen. Stat. § 4-274 etseq.
22
23
24
226. This is a claim for treble damages and penalties under the Connecticut False Claims
25
Act.
26
27
28
-39-
1 227. Through the acts described above, Defendant knowingly, intentionally, and willfully
2 providedimproper remuneration to various health care providers through the FOCUS program with
3 the intent to increase commercial sales of Gilead's Relevant Drugs, in violation of the Anti-Kickback
4 Statute.
6 entitled to be paid by the State of Connecticut—through any state-funded program, including,

7 without limitation, Medicaid—forthe provision of Relevant Drugs provided (or whose prescriptions
8 were written) by any health care provider receiving improper remuneration from Gilead, as alleged
9 herein.
12 screening, and prescription-related medication, items, and services to the State of Connecticut for
15 by Defendant's conduct. The false claims were presented by numerous separate entities across the
16 State of Connecticut. Relator has no control over or deahngs with such entities and has no access to
17 the records in their possession.
18 231. The State of Connecticut, unaware of the falsity of the records, statements, and
19 claims made or caused to be made by Defendant, paid and continues to pay the claims that the State
20 of Connecticut would not have paid but for Defendant's illegal conduct.
21 232. By reason of Defendant's acts, the State of Connecticut has been damaged, and

23
Count V
24 Florida False Claims Act
Fla. Stat. Ann. § 68.081 etseq.
25
26
27
28
-40-
1 234. This is a claimfor treble damages and penalties under the Florida False Claims Act.
3 provided improper remuneration to various health care providers through the FOCUS program with
5 Statute.
7 entitled to be paid by the State of Florida—through any state-funded program, including, without
8 limitation, Medicaid—forthe provisionof Relevant Drugs provided (or whose prescriptions were
9 written) by any health care provider receivingimproper remuneration from Gilead, as allegedherein.
10 237. Through the acts described above, Defendant knowinglypresented, or caused to be
11 presented, false or fraudulent claimsfor payment of Defendant's Relevant Drugs, HCV/HIV

12 screening, and prescription-related medication, items, and services to the State of Florida for
16 State of Florida. Relator has no control over or dealings with such entities and has no access to the
18 239. The State of Florida, unaware of the falsity of the records, statements, and claims
20 Florida would not have paid but for Defendant's illegal conduct.
21 240. Additionally, the State of Florida is entitled to a statutory penalty for each and every
22 violation allegedherein to be determined by the Court in accordancewith the relevant statutes.
23
Count VI
24 Georgia False Medicaid Claims Act
Ga. Code Ann. § 49-4-168 etseq.
25
26
27
28
-41 -
1 242. This is a claim for treble damages and penalties under the Georgia FalseMedicaid
2 Claims Act.
3 243. Through the acts described above, Defendantknowingly, intentionally, and willfully
5 the intent to increase commercial sales of Gilead's Relevant Drugs, in violation ofthe Anti-Kickback
6 Statute.
7 244. Because of Defendant' s violations of the Anti-Kickback Statute, Defendant was not
8 entitled to be paid by the State of Georgia—through any state-fundedprogram, including, without

10 written) by any health care provider receiving improper remuneration from Gilead, as alleged herein.
11 245. Through the acts described above, Defendantknowingly presented, or caused to be
13 screening, and prescription-related medication, items, and services to the State of Georgia for
17 State of Georgia. Relator has no control over or dealings with such entities and has no access to the
19 247. The State of Georgia,unaware of the falsity of the records, statements, and claims
20 made or caused to be made by Defendant, paid and continuesto pay the claims that the State of
21 Floridawould not have paid but for Defendant's illegal conduct.
22 248. Additionally, the State of Georgia is entitled to a statutory penalty for each and every
23 violation alleged herein to be determined by the Court in accordance with the relevant statutes.
24
25
26
27
28
-42-
1 Count Vn
Illinois Whistleblower Reward and Protection Act
2 740 m. Comp. Stat. § 175/1 etseq.
3 249. Relator realleges and incorporates by reference all foregoing allegations as though
4 fully set forth herein.
5 250. This is a claim for treble damages and penalties under the Illinois Whistleblower
6 Reward and Protection Act.
9 the intent to increase commercial salesof Gilead's Relevant Drugs, in violation of the Anti-Kickback
10 Statute.
12 entitled to be paid by the State of Illinois—through any state-funded program, including, without
17 screening, and prescription-related medication, items, and services to the State of Illinois for
21 State of Illinois. Relator has no control over or dealings with such entities and has no access to the
23 255. The State of Georgia, unaware of the falsity of the records, statements, and claims
25 Illinois would not have paid but for Defendant's illegal conduct.
26 256. Additionally, the State of Illinois is entitled to a statutory penalty for each and every
28
-43-
1 Count Vin
Louisiana Medical Assistance Programs Integrity Law
2 La. Rev. Stat. § 437 etseq.
5 258. This is a claimfor treble damages and penalties under the LouisianaMedical
6 Assistance Programs Integrity Law.
10 Statute.
12 entitled to be paidby the State of Louisiana—through any state-funded program, including, without
13 limitation, Medicaid—for the provisionof Relevant Drugs provided (or whose prescriptions were
14 written) by any health care provider receiving improper remuneration from Gilead, as alleged herein.
17 screening, and prescription-related medication, items, and services to the State of Louisiana for
20 by Defendant's conduct.The false claims were presented by numerous separateentities across the
21 State of Louisiana. Relator has no control over or dealings with such entities and has no access to the

23 263. The State of Louisiana, unaware of the falsity of the records, statements, and claims
25 Louisiana would not have paid but for Defendant's illegal conduct.
26 264. Additionally, the State of Louisiana is entitled to a statutory penalty for each and
27 every violation alleged herein to be determined by the Court in accordance with the relevant statutes.
28
-44-
1 Count IX
Maryland False Health Claims Act
2 Md. Code Ann., [Health-General] § 2-601 etseq.
5 266. This is a claimfor treble damages and penalties under the Maryland False Health
6 Claims Act.
9 the intent to increase commercialsales of Gilead's Relevant Drugs, in violation of the Anti-Kickback
10 Statute.
12 entitled to be paidby the State of Maryland—through any state-funded program, including, without
14 written) by any health care provider receivingimproper remuneration from Gilead, as alleged herein.
17 screening, and prescription-related medication, items, and services to the State of Maryland for
20 by Defendant's conduct. The false claimswere presented by numerous separate entities across the
21 State of Maryland. Relator has no control over or dealings with such entities and has no access to the
23 271. The State of Maryland, unaware of the falsity of the records, statements, and claims
25 Maryland would not have paid but for Defendant's illegalconduct.
26 272. Additionally, the State of Maryland is entitled to a statutory penalty for each and
28
^ -45-
1 Count X
Massachusetts False Claims Act
2 Mass. Gen. Laws Ch. 12, § 5 etseq.
3 273. Relatorrealleges and incorporates by reference allforegoing allegations as though

5 274. This is a claimfor treble damages and penalties under the Massachusetts False Claims
6 Act.
10 Statute.
11 276. Because of Defendant' s violations of the Anti-Kickback Statute, Defendant was not
12 entitled to be paidby the Commonwealth of Massachusetts—through anystate-funded program,

13 including, without limitation, Medicaid—for the provision ofRelevant Drugs provided (or whose
14 prescriptions were written) by any health care providerreceiving improper remuneration from
15 Gilead, as alleged herein.
18 screening, and prescription-related medication, items, and services to the Commonwealth of
19 Massachusetts for payment or approval.
20 278. Relator cannot at this time identifyall of the false claims for paymentthat were caused
22 Commonwealth of Massachusetts. Relator has no control over or dealings with such entities and has
23 no access to the records in their possession.
24 279. The Commonwealth of Massachusetts, unaware of the falsity of the records,
25 statements, and claims made or caused to be made by Defendant, paid and continues to pay the
26 claims that the Commonwealth of Massachusetts would not have paid but for Defendant's illegal
27 conduct.
28
-46-
1 280. By reason of Defendant's acts, the Commonwealth of Massachusetts has been

2 damaged, and continues to be damaged, in substantial amount to be determined at trial.
3
Count XI
4 Michigan Medicaid False Claims Act
Mich. Comp. Laws. § 400.601 etseq.
5
6
7
282. This is a claimfor treble damages and penalties under the Michigan Medicaid False
8
Claims Act.
9
283. Through the acts described above, Defendantknowingly, intentionally, and willfiilly
10
provided improperremuneration to various health care providers through the FOCUS program with
11
12
Statute.
13
14
entitled to be paid by the State of Michigan—through any state-funded program, including, without
15
limitation, Medicaid—for the provision of Relevant Drugs provided (or whose prescriptions were
16
written) by any health care provider receiving improper remuneration from Gilead, as alleged herein.
17
285. Through the acts described above. Defendant knowingly presented, or caused to be
18
presented, false or fraudulent claims for payment of Defendant's Relevant Drugs, HCV/HIV
19
screening, and prescription-related medication, items, and services to the State of Michiganfor
20
payment or approval.
21
286. Relator cannot at this time identify all of the false claimsfor payment that were caused
22
by Defendant's conduct. The false claims were presented by numerous separate entities across the
23
State of Michigan. Relator has no control over or dealings with such entities and has no access to the
24
records in their possession.
25
26
27
28
-47-
1 287. The State of Michigan, unaware of the falsity of the records, statements, and claims
2 made or causedto be made by Defendant, paid and continuesto pay the claims that the State of
3 Michigan would not have paid but for Defendant's illegal conduct.
4 288. Additionally, the State of Michigan is entitled to a statutory penalty for each and
6
Count XII
7 Minnesota False Claims Act
Minn. Stat, § 15C.01 etseq.
8
9
10
290. This is a claimfor treble damages and penalties under the Minnesota False Claims
11
Act.
12
13
14
15
Statute.
16
17
entitled to be paid by the State of Minnesota—through any state-funded program, including,without
18
limitation, Medicaid—forthe provision of Relevant Drugs provided (or whose prescriptions were
19
written) by any health care providerreceiving improperremunerationfrom Gilead, as alleged herein.
20
293. Through the acts described above. Defendant knowingly presented, or caused to be
21
presented, false or fraudulent claims for payment of Defendant's Relevant Drugs, HCV/HIV
22
screening, and prescription-related medication, items, and services to the State of Minnesota for
23
24
294. Relator cannot at this time identify all of the false claims for payment that were caused
25
by Defendant's conduct. The false claims were presented by numerous separate entities across the
26
27
28
-48-
1 State of Minnesota. Relator has no control over or deahngs with such entities and has no access to
3 295. The State of Minnesota, unaware of the falsity of the records, statements, and claims
5 Minnesota would not have paid but for Defendant's illegal conduct.
6 296. By reason of Defendant's acts, the State of Minnesota has been damaged, and
8
Count XIII
9 Nevada - Submission of False Claims to State or Local Government
Nev. Rev. Stat. § 357.010 etseq.
10
11
12
298. This is a claim for treble damages and penalties under the Nevada statute relating to
13
the Submission of False Claims to State or Local Government, Nev. Rev. Stat. §§ 357.010, etseq.
14
15
16
17
Statute.
18
19
entitled to be paid by the State of Nevada—through any state-funded program, including,without
20
21
written) by any health care provider receivingimproper remuneration from Gilead, as alleged herein.
22
301. Through the acts described above, Defendant knowingly presented, or caused to be
23
presented, false or fraudulent claimsfor payment of Defendant's Relevant Drugs, HCV/HIV
24
screening, and prescription-related medication, items, and services to the State of Nevada for
25
26
27
28
49-
3 State of Nevada. Relator has no control over or dealingswith such entities and has no access to the
5 303. The State of Nevada, unaware of the falsity of the records, statements, and claims
7 Nevada would not have paid but for Defendant's illegal conduct.
8 304. By reason of Defendant's acts, the State of Nevada has been damaged, and continues
9 to be damaged, in substantial amount to be determined at trial.
10
Count XIV
11 New Jersey False Claims Act
NJ. Stat. Ann. § 2A:32C-1 etseq.
12
15 306. This is a claim for treble damages and penalties under the New Jersey False Claims
16 Act.
17 307. Through the acts described above. Defendant knowingly, intentionally, and willfully
20 Statute.
22 entitled to be paid by the State of NewJersey—through any state-funded program, including,

23 without limitation, Medicaid—for the provision of Relevant Drugs provided (or whose prescriptions
25 herein.
28
-50-
1 screening, and prescription-related medication, items, and services to the State of NewJersey for
5 State ofNewJersey. Relator has no control over or dealings with such entities and has no access to
7 311. The State of NewJersey, unaware of the falsity of the records, statements, and claims
8 made or caused to be made by Defendant, paid and continues to pay the claims that the State of New
9 Jersey would not have paid but for Defendant's illegal conduct.
10 312. Additionally, the State of NewJersey is entitled to a statutory penaltyfor each and
11 everyviolation alleged herein to be determined by the Court in accordance with the relevantstatutes.
12
Count XV
13 New York False Claims Act
N.Y. State Fin. § 187 etseq.
14
313. Relator realleges and incorporates by reference allforegoing allegations as though
15
16
314. This is a claimfor treble damages and penalties under the New York False Claims
17
Act.
18
315. Through the acts described above. Defendantknowingly, intentionally, and willfully
19
provided improper remuneration to various health care providers through the FOCUSprogram with
20
21
Statute.
22
23
entitled to be paidby the State of New York—through any state-funded program, including, without
24
25
written) by any health care providerreceiving improper remuneration from Gilead, as alleged herein.
26
27
28
-51 -
3 screening, and prescription-related medication, items, and services to the State of New York for
7 State of New York. Relator has no control over or dealings with such entities and has no access to the
9 319. The State of New York, unaware of the falsity of the records, statements, and claims
10 made or caused to be made by Defendant, paid and continues to pay the claims that the State of New
11 York would not have paid but for Defendant's illegalconduct.
12 320. Additionally, the State of New York is entitled to a statutory penalty for each and
14
Count XVI
15 North Carolina False Claims Act
N.C. Gen. Stat. § 1-605 etseq.
16
17
18
322. This is a claim for treble damages and penalties under the North Carolina False
19
Claims Act.
20
21
22
23
Statute.
24
25
entitled to be paid by the State of North Carolina—through any state-funded program, including,
26
without limitation, Medicaid—for the provision of Relevant Drugs provided (or whose prescriptions
27
28
-52-
1 were written) by any health care providerreceiving improper remunerationfrom Gilead, as alleged
2 herein.
5 screening, and prescription-related medication, items, and services to the State of North Carolina for
9 State of North Carolina. Relator has no control over or dealings with such entities and has no access
10 to the records in their possession.
11 327. The State of North Carolina, unaware of the falsity of the records, statements, and
13 of North Carolina would not have paid but for Defendant's illegal conduct.
14 328. By reason of Defendant's acts, the State of North Carolina has been damaged, and

16
Count XVII
17 Rhode Island False Claims Act
R.I. Gen. Laws § 9-1.1-1 etseq.
18
19
20
330. This is a claim for treble damages and penalties under the Rhode Island False Claims
21
Act.
22
23
24
25
Statute.
26
27
28
-53-
2 entitled to be paid by the State of Rhode Island—through any state-funded program, including,
4 were written) by any health care provider receivingimproper remuneration from Gilead, as alleged
5 herein.
6 333. Through the acts described above, Defendant knowinglypresented, or caused to be

8 screening, and prescription-related medication, items, and services to the State of Rhode Island for
12 State of Rhode Island. Relator has no control over or dealings with such entities and has no access to
14 335. The State of Rhode Island, unaware of the falsity of the records, statements, and
16 of Rhode Island would not have paid but for Defendant's illegal conduct.
17 336. By reason of Defendant's acts, the State of Rhode Island has been damaged, and
19
Count XVIII
20 Tennessee False Claims Act
Tenn. Code Ann. § 4-18-101 etseq.
21
22
23
338. This is a claim for treble damages and penalties under the Tennessee False Claims
24
Act.
25
26
27
28
-54-
1 the intent to increase commercial salesof Gilead's Relevant Drugs, in violation of the Anti-Kickback
2 Statute.
4 entitled to be paidby the State of Tennessee—through any state-funded program, including, without
6 written) by any health care providerreceiving improper remuneration from Gilead, as alleged herein.
9 screening, and prescription-related medication, items, and services to the State of Tennessee for
12 by Defendant's conduct.The false claims were presented by numerousseparateentities across the
13 State of Tennessee. Relator has no control over or dealings with such entities and has no access to
15 343. The State of Tennessee, unaware of the falsity of the records, statements, and claims
16 made or causedto be made by Defendant, paid and continuesto paythe claims that the State of
17 Tennessee would not have paid but for Defendant's illegal conduct.
18 344. Byreason of Defendant's acts, the State of Tennessee has been damaged, and
20
Count XIX
21 Texas Medicaid Fraud Prevention Law
Tex. Hum. Res. Code Ann. § 36.001 etseq.
22
23
24
346. This is a claim for double damages and penalties under the Texas Medicaid Fraud
25
Prevention Law.
26
27
28
-55-
4 Statute.
6 entitled to be paid by the State of Texas —through any state-funded program, including,without
7 limitation, Medicaid—for the provision of RelevantDrugs provided (or whose prescriptions were
11 screening, and prescription-related medication, items, and services to the State of Texas for payment
12 or approval.
15 State of Texas. Relator has no control over or dealings with such entities and has no access to the
17 351. The State of Texas, unaware of the falsity of the records, statements, and claims made
18 or caused to be madeby Defendant, paid and continuesto paythe claims that the State of Texas
19 would not have paid but for Defendant's illegal conduct.
20 352. Additionally, the State of Texas is entitled to a statutory penalty for each and every
22
Count XX
23 Virginia Fraud Against Taxpayers Act
Va. Code § 8.01-216.1 etseq.
24
25
26
27
28
-56-
1 354. This is a claim for treble damages and penalties under the Virginia Fraud Against
2 Taxpayers Act.
3 355. Through the acts described above, Defendantknowingly, intentionally, and willfully
4 providedimproper remuneration to various health care providers through the FOCUS program with
6 Statute.
8 entitled to be paid by the Commonwealth of Virginia—through any state-funded program, including,

9 without limitation, Medicaid—for the provisionof Relevant Drugs provided (or whose prescriptions
10 were written) by any health care providerreceiving improper remunerationfrom Gilead, as alleged
11 herein.
13 presented, false or fraudulent claims for paymentof Defendant's Relevant Drugs, HCV/HIV
14 screening, and prescription-related medication, items, and services to the Commonwealth of Virginia
15 for payment or approval.
18 Commonwealth of Virginia. Relator has no control over or dealings with such entities and has no
19 access to the records in their possession.
20 359. The Commonwealth of Virginia, unaware of the falsity of the records, statements, and
21 claimsmade or caused to be made by Defendant, paid and continues to pay the claims that the
22 Commonwealth of Virginia would not have paid but for Defendant's illegal conduct.
23 360. By reason of Defendant's acts, the Commonwealth of Virginia has been damaged, and

25
26
27
28
-57-
1 Count XXI
Washington State Medicaid Fraud False Claims Act
2 Wash. Rev. Code § 74.66.005 etseq.
5 362. This is a claim for double damages and penalties under the Washington State
6 Medicaid Fraud False Claims Act.
7 363. Through the acts described above. Defendant knowingly, intentionally, and willfully
10 Statute.
12 entitled to be paid by the State ofWashington—through any state-funded program, including,

15 herein.

18 screening, and prescription-related medication, items, and services to the State ofWashington for
22 State ofWashington. Relator has no control over or dealings with such entities and has no access to
24 367. The State ofWashington, unaware of the falsity of the records, statements, and claims
26 Washington would not have paid but for Defendant's illegal conduct.
27
28
-58-
1 368. Additionally, the State of Washington is entitled to a statutory penalty for each and
3
Count XXII
4 The District of Columbia False Claims Act
D.C. Code § 2-381.01 et. seq.
5
8 370. This is a claim for double damages and penalties under the District of Columbia
9 False Claims Act.
10 371. Through the acts described above, Defendant knowingly, intentionally, and
11 willfully provided improper remuneration to various health care providers through the FOCUS
12 program with the intent to increase commercial sales of Gilead's Relevant Drugs, in violation of
13 the Anti-Kickback Statute.
15 entitled to be paid by the District of Columbia —^through any state-funded program, including,
16 without limitation, Medicaid—for the provision of Relevant Drugs provided (or whose
17 prescriptions were written) by any health care provider receiving improper remuneration from
18 Gilead, as alleged herein.
21 screening, and prescription-related medication, items and services to the District of Columbia for
23 374. Relator cannot at this time identify all of the false claims for payment that were
24 caused by Defendant's conduct. The false claims were presented by numerous separate entities
25 across the District of Columbia. Relator has no control over or dealings with such entities and has
26 no access to the records in their possession.
27 375. The District of Columbia, unaware of the falsity of the records, statements, and
28
-59-
1 claims made or caused to be made by Defendant, paid and continues to pay the claims that the
2 District of Columbia would not have paid but for Defendant's illegal conduct.
3 376. Additionally, the District of Columbia is entitled to a statutory penalty for each and
4 every violation alleged herein to be determined by the Court in accordance with the relevant
5 statutes.
6
PRAYER FOR RELIEF
7
WHEREFORE, Relator prays for judgment against Defendant as follows:
8
1. That Defendant cease and desist from violating 31 U.S.C. § 3729 etseq.y and the
9
relevant parts of each statute applicable to the PlaintiffStates as set forth above;
10
2. That this Court enter judgmentagainst Defendantin an amount equalto three times
11
the amoimtof damages the United States has sustainedbecause of Defendants' actions, plus a civil
12
penalty of not less than $5,500 and not more than $21,916 for each violation of 31U.S.C. § 3729;
13
3. That this Court enter judgment against Defendant in an amount equal to three times
14
the amount of damages the State of Californiahas sustained because of Defendant's actions, plus a
15
civil penalty for the maximum amount allowed bystatute, for each violation of the California False
16
Claims Act, Cal. Gov't Code §§ 12650-12656;
17
18
the amount of damages the State of Colorado has sustained because of Defendant's actions, plus a
19
civil penalty for the maximum amount allowed by statute, for each violation of the Colorado
20
Medicaid False ClaimsAct, Colo. Rev. Stat §§ 25.5-4-303.5 etseq.\
21
5. That this Court enter judgmentagainst Defendantin an amount equalto three times
22
the amount of damages the State of Florida has sustainedbecause of Defendant's actions, plus a civil
23
penalty for the maximum amount allowed by statute, for each violation of the Florida False Claims
24
Act, Fla. Stat. Ann. §§ 68.081 etseq.y
25
26
the amount of damages the State of Georgia has sustainedbecause of Defendant's actions, plus a civil
27
28
-60-
1 penalty for the maximum amount allowed by statute, for each violationof the Georgia False
2 Medicaid Claims Act, Ga. Code Ann. §§ 49-4-168 etseq.;
3 7. That this Court enter judgment against Defendant in an amount equal to three times
4 the amount of damages the State of Illinois has sustained because of Defendant's actions, plus a civil
5 penalty for the maximum amount allowed by statute, for each violation of the Illinois Whistleblower
6 Reward and Protection Act, 740 111. Comp. Stat. § 175/1 etseq.;
8 the amount of damages the State of Louisiana has sustainedbecause of Defendant's actions, plus a
9 civilpenalty for the maximum amount allowed by statute, for each violation of the LouisianaMedical
10 Assistance Programs Integrity Law, La. Rev. Stat. § 437etseq.]
12 the amount of damages the State of Maryland has sustainedbecause of Defendant's actions, plus a
13 civil penalty for the maximum amount allowed by statute, for each violation of the Maryland False
14 Health Claims Act, Md. Code Ann., [Health-General] § 2-601 etseq.-,
16 the amount of damages Commonwealth of Massachusetts has sustained because of Defendant's
17 actions, plus a civil penalty for the maximum amount allowed by statute, for each violation of the
18 Massachusetts False Claims Act, Mass. Gen. Lawsch. 12, § 5 etseq.\
20 the amount of damages the State of Michigan has sustained because of Defendant's actions, plus a
21 civil penalty for the maximum amount allowedby statute, for each violationof the Michigan
22 Medicaid False ClaimsAct, Mich. Comp. Laws. § 400.601 etseq.\
24 the amount of damages the State of Minnesota has sustained because of Defendant's actions, plus a
25 civil penalty for the maximum amount allowedby statute, for each violation of the Minnesota False
26 Claims Act, Minn. Stat, § 15C.01 etseq.]
27
28
-61 -
2 the amount of damages the State of Nevada has sustained because of Defendant's actions, plus a civil
3 penalty for the maximum amount allowed by statute, for each violation of the Nevada statute
4 concerning Submission of False Claims to State or Local Government, Nev. Rev. Stat. § 357.010 et
5 seq.)
7 the amount of damages the State of NewJersey has sustained because of Defendant's actions, plus a
8 civil penalty for the maximum amount allowed by statute, for each violationof the NewJersey False
9 Claims Act, NJ. Stat. Arm. § 2A:32C-1 etseq.\
11 the amount of damages the State of New York has sustained because of Defendant's actions, plus a
12 civil penalty for the maximum amount allowedby statute, for each violation of the New York False
13 Claims Act, N.Y. State Fin. § 187 etseq.\
15 the amount of damages the State of North Carolina has sustained because of Defendant's actions,
16 plus a civil penalty for the maximum amount allowed by statute, for each violation of the North
17 Carolina False Claims Act, N.C. Gen. Stat. § 1-605 etseq.\
19 the amount of damages the State of Rhode Island has sustained because of Defendant's actions, plus
20 a civil penalty for the maximum amount allowedby statute, for each violation of the Rhode Island
21 False ClaimsAct, R.L Gen. Laws § 9-1.1-1 etseq.\
23 the amount of damages the State of Tennessee has sustained because of Defendant's actions, plus a
24 civil penalty for the maximum amount allowed by statute, for each violation of the Tennessee False
25 Claims Act, Tenn. Code Ann. § 4-18-101 etseq.\
26 19. That this Court enter judgment against Defendant in an amount equal to two times
27 the amount of damages the State of Texas has sustained because of Defendant's actions, plus a civil
28
- 62 -
1 penaltyfor the maximum amount allowed by statute, for eachviolation of the Texas Medicaid Fraud
2 Prevention Law, Tex. Hum. Res. Code Ann. § 36.001 etseq.\
3 20. That this Court enter judgment against Defendantin an amount equalto three times
4 the amount of damages the Commonwealth of Virginia has sustainedbecause of Defendant's actions,
5 plus a civil penalty for the maximum amount allowed by statute, for eachviolation ofthe Virginia
6 Fraud Against Taxpayers Act, Va. Code § 8.01-216.1 etseq.\
7 21. That this Court enter judgment against Defendant in an amount equal to two times
8 the amount of damages the State of Washington has sustainedbecause of Defendant's actions, plus a
9 civil penalty for the maximum amount allowed by statute, for eachviolation of the Washington State
10 Medicaid Fraud False Claims Act, Wash. Rev. Code § 74.66.005 etseq.\
11 22. That this Court enter judgmentagainst Defendantin an amount equalto two times
12 the amount of damages the Districtof Columbia has sustained because of Defendant's actions, plus a
13 civil penalty for the maximumamount allowedby statute, for each violation of the District of
14 Columbia False Claims Act, D.C. Code § 2-381.0 etseq.\
15 23. That Relatorbe awarded the maximum amount allowed pursuant to 31 U.S.C.
16 § 3730(d), and the relevant provisions of each statute applicable to the PlaintiffStates as set forth
17 above;
18 24. That Relator be awarded all costs of this action;
19 25. That the Relator be awarded reasonable attorneys' fees; and

20 26. That Relator recover such further and other relief as the Court deems just and proper.
21
22
23
24
25
26
27
28
-63-
1 DEMAND FOR JURY TRIAL
2 Pursuant to Rule 38 of the Federal Rules of CivilProcedure, Relator hereby demands a trial
3 by jury.
5 Dated: February 6, 2019 Joseph R. Saveri (State Bar No. 130064)

Steven N. Williams (State Bar No. 175489)
6 Nicomedes Sy Herrera (State Bar No. 275332)
Kevin Rayhill (State Bar No. 267496)
7 Kyla Gibboney (State Bar No. 301441)
JOSEPH SAVERI LAW FIRM, INC.
8 601 California Street, Suite 1000
San Francisco, California 94108
9 Telephone: (415) 500-6800
Facsimile: (415) 395-9940
10 Email: jsaveri@saverilawfirm.com
swilliams^saverilawfirm.com
11 nherrera^saverilawfirm.com
krayhill^saverilawfirm.com
12 kgibboney@saverilawfirm.com
13
14
f Toseph R. Saveri /
15
Attorneysfor Plaintijfs
16
UnitedStates ofAmerica; theStates ofCaliforniaj
17 Colorado^ Connecticut^ Florida^ Georgia^ Illinois^
Louisiana^ Maryland^ Michigan^ Minnesota^ Nevada^
18 NewJerseyj New Yorkj North Carolina^ Rhode Island^
Tennessee^ TexaSj and Washington; the Commonmalths
19 ofMassachusetts and Virginia; and theDistrict Of
Columbia, ex rel. Allen Kuo
20
21
22
23
24
25
26
27
28
-64-

Gilead FCA Lawsuit

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Gilead FCA Lawsuit

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Case 3:17-cv-02612-JSC Document 17 Filed 02/06/19 Page 1 of 68

Joseph R. Saveri (State Bar No. 130064)

10 UNITED STATES DISTRICT COURT

26 DO NOT PLACE IN PRESS BOX

FIRST AMENDED COMPLAINT CASE NO. 17-CV-2612

4 A. Overviewof False Claims and Illegal Kickbacks 1

6 C. Gilead's FOCUS Scheme 4

8 III. JURISDICTION AND VENUE 8

9 IV. FEDERAL AND STATE-FUNDED HEALTH CARE PROGRAMS 9

13 A. The Federal Anti-Kickback Statute Prohibits a For-Profit Pharmaceutical

20 B. Gilead's Payments Made Through FOCUS Violate the Anti-Kickback Statute

27 C. Commercial Affairs Drive Gilead's FOCUS Scheme 28

1 D. Gilead' s Violations of the Anti-Kickback Statute Cause Over-Utilization and

10 money recipients to prescribe Gilead's Relevant Drugs by emphasizing "linkage to care."

11 4. Through the provision of unlawful remunerations to Healthcare Providers receiving

14 the Relevant Drugs.

15 5. FOCUS is a Trojan horse for Gilead's CommercialAffairs department to drive sales

13 to influence prescribers to choose Gilead Relevant Drugs over competitors.

15 States, and particularly in the Plaintiff States.

11 statutes applicable to each of the Plaintiff States.

14 indirectly, to induce health care professionals to prescribe drugs, treatments, or services.

16 retain reimbursement from federal and state-funded health care programs.

26 Program, and any other federal or state-funded health care program.

1 Act, Wash. Rev. Code § 74.66.005 et seq.

2 38. Based on these provisions, RelatorAllenKuo seeks to recoverall available damages,

1 44. Relator is an "original source" of information within the meaning of 31 U.S.C.

4 the allegations or transactions alleged herein are based.

13 (the "Relevant Drugs").

14 m. JURISDICTION AND VENUE

FIRST AMENDED COMPLAINT CASE NO. 17-CV-2612

6 times relevantto this Complaint, Defendantregularly conducted substantial business withinthis

4 • He/she had a blood transfusion before 1992; or

5 • He/she currently uses illicitinjections drugs, or has a past history of illicit

hepatologists or other specialists prior to receiving the drugs.

2 A. The Federal Anti-Kickback Statute Prohibits a For-Profit Pharmaceutical Company

9 statute, prohibits illegal kickbacks and other forms of impermissible remuneration.

19 health care program. 42 U.S.C. § 1320a-7b(b).

7 77. In this case, there is no Anti-Kickback Statute safeharborallowing Gilead to provide

25 Id. at 23724 (emphasis in original).

1 a) Interfere with or skewclinical decision-making, or undermine the clinical

7 statutes is a prerequisite to Gilead's right to receive or retain reimbursements from Medicare,

17 making" as an aggravating factor as to whether a payment constitutes an illegal kickback, vulnerable

23 located in each of the Plaintiff States.

1 FOCUS constitutes a remuneration to the institution in violation of the Anti-Kickback Statute.

17 met" regarding Gilead's payment and "support" it.

2 1. FOCUS Payments Subsidize Doctors' Salaries

19 payments to be paid to prescribers, Gilead's subsidizationof any doctors' or staff salariesthrough

21 violation of the Anti-Kickback Statute.

3 Gilead's version of white-coat marketing corrupts an institution from the top-down.

13 Medicaid; and the taxpayers.

2 and teaching hospitals.

3 113. In another example, atJohns Hopkins University School of Medicine, beginning in

10 "aggravating" circumstances that potentially interfere with or skewclinical decision-making. Gilead

2 Rules Regarding Beneficiary Inducements, 81 Fed. Reg. 88368 (Dec. 7, 2016))

2 program beneficiaries increases the risk of over-utilization or mis-utilization of Gilead's Relevant

8 Gilead's Relevant Drugs).

10 therefore violates the Anti-Kickback Statute.

16 3. FOCUS Payments Fund Modifications to Providers' Medical Soft>vare

18 decision-making by doctors as to whether ordering such a test is clinically appropriate, based on

22 135. This suppression ofclinical decision-making is markedly evident in UCLA Health's

22 treatment candidates—while simultaneously creating a large financial burden on Medicare and

24 actually appropriate under the circumstances.

7 Providers that receive FOCUS money.

13 lab equipment, transportation vouchers, and even rent.

8 C. Commercial Affairs Drive Gilead's FOCUS Scheme

1 1. Conforming to Gilead's Scheme With an Emphasis on "Linkage to Care"