Corporate Counsel Daily, Data inconsistencies in resubmitted grant application not deemed material to NIH funding decision, (Apr 9, 2025)

By Jeffrey H. Brochin, J.D.

The fact that the National Institutes of Health (NIH) continued to fund university’s research projects even after a 2020 grant progress report provided corrected patient response data, constituted strong evidence that the data inconsistencies were not material to the agency.

A federal District Court in the District of Columbia has granted the Motion to Dismiss filed by Johns Hopkins University (JHU of Hospital) in a False Claims Act (FCA) lawsuit brought by a Relator who claimed that the Hospital defrauded the government by way of false claims in its grant application for $11 million in bone marrow transplant research funding. The Complaint and its accompanying documents failed to raise a plausible inference that the submitted efficacy data was material to the overall decision by the agency for the research grant funding, (U.S. ex rel. Fuchs v. Johns Hopkins University, No. 20-cv-3242 (DLF) (D.D.C. Mar. 31, 2025)).

Initial application rejection. The instant case concerns a May 2017 grant application submitted by JHU (and Children’s National) to obtain NIH funding for bone marrow transplant research. The application proposed four projects, two of which—Project 3 and Project 4—gave rise to the Relator’s claims. On initial submission, Project 3 and Project 4 received comparatively low scores by NIH reviewers, and the application was not approved.

In June 2018, JHU resubmitted a 1,107-page application (Resubmission) proposing the same four projects, and in April 2019, the Resubmission was approved, resulting in an NIH commitment to providing approximately $11 million over five years to fund 16 clinical trials proposed under the grant.

Conflict of Interest concerns. The Relator, a professor of oncology and immunology at the JHU School of Medicine, served as co-leader for Project 4, an investigator for Project 3, and a contributor to the grant application. Six months after NIH funded the grant, the Relator suggested changes to one of the clinical trials approved as part of Project 4. Other investigators expressed concerns that his proposal raised potential conflicts of interest arising from his connections to a for-profit business. Although his proposed changes were adopted in part, he was removed as an investigator from the trial. In June 2020, he wrote a letter to JHU’s Research Integrity Office detailing concerns about the Resubmission, and after his letter was ignored, he filed the instant FCA lawsuit.

Relator’s fraud claims. Among the Relator’s claims of fraud related to the NIH grant application, were data inconsistencies included in the Resubmission. For example, it was hypothesized that after leukemia patients received bone marrow transplants, infusions of T lymphocyte cells taken from the marrow donor could trigger an immune response or prevent relapse. The Resubmission asserted that “preliminary data” in an ongoing study indicated that T cell therapy had induced remission in 87.5% of relapsed patients, which was “unprecedented for any cell therapeutic” for post-transplant leukemia patients. However, project investigators at a May 2017 conference of the International Society of Cell & Gene Therapy presented a paper claiming that only three out of five (or 60% of) relevant patients had achieved remission. JHU noted that the 87.5% rate was subsequently corrected in a 2020 progress report to NIH.

In another example, the Relator pointed out that investigators proposed injecting post-transplant leukemia patients with donor T cells within 44 days of transplant, to determine whether the therapy would prevent or delay relapse. (Relapse risk is heightened in the period immediately following transplant.) However, the Relator alleged that investigators failed to comply with the proposed trial design and manipulated the sample of enrolled patients by enrolling post-transplant patients who had already gone several months without experiencing negative health events, thereby constituting a “highly selected, favorable patient cohort” resulting in “clinically meaningless” data.

Presentment and false claims. The court noted that to allege a presentment or false statement claim under the FCA, a relator must show that (1) JHU submitted a claim or made a statement to the government (falsity); (2) the claim or statement was false (materiality); and (3) JHU knew the claim or statement was false (scienter).

As to the materiality element, the court found that even accepting that the preliminary patient data was false—which the court assumed without deciding—the Relator failed to plausibly allege that it was material to NIH’s funding decision. Comments on the Resubmission showed that fully-informed NIH reviewers did not view the preliminary data as material, nor did they heavily rely on efficacy projections in approving the grant. One reviewer noted that “it is not expected that durable remissions will be achieved in 80% of [treated] patients,” reflecting an understanding that the 87.5% remission rate was not expected to be maintained. The reviewers’ notes also showed that the agency understood safety determinations to be the central contribution of the first phase (Arm A), and efficacy to be a secondary concern. Accordingly, the court found that those inconsistencies cited by the Relator were not material to the agency’s decision to approve the research grant funding.

Continued funding. The court also noted that the NIH continued funding after the 2020 grant progress report provided corrected patient response data, was strong evidence that the data inconsistencies were not material to the agency. The court referenced precedent holding that “if the government pays a particular claim in full despite its actual knowledge that certain requirements were violated, that is very strong evidence that those requirements are not material.” Although Project 3’s grade improved following the Resubmission, taken as a whole, and even in the light most favorable to the Relator, the Complaint and incorporated documents failed to raise a plausible inference that the efficacy data was material to the overall grant, which included four discrete projects consisting of 16 ongoing and anticipated clinical trials.

Based on the foregoing, the court concluded that requisite elements of an FCA claim were not plausibly pleaded, and JHU’s Motion to Dismiss was granted.

The case is No. 20-cv-3242 (DLF).

Judge: Friedrich, D.

Attorneys: Christopher Bowmar Mead (Schertler Onorato Mead & Sears LLP) for Ephraim Fuchs, M.D. Michael J. Vernick (Akin Gump Strauss Hauer & Feld LLP) for Johns Hopkins University. Erin Steele, Jacquelyn E. Papish, and John E. Kelly (Barnes & Thornburg LLP) for Childrens National Medical Center.

Companies: Johns Hopkins University; Childrens National Medical Center

Cases: CaseDecisions FCANews FraudNews GCNNews QuiTamNews DistrictofColumbiaNews