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Whistleblowers and Health Fraud Cases in the Pharmaceutical Industry

December 6, 2010

According to a recent article in the Wall Street Journal (WSJ), pharmacy companies such as Merck, Pfizer, Bristol-Myers Squibb, and Eli Lilly, paid a total of over $6 billion in settlements for federal whistleblower-initiated cases between 2001 and 2009.

The New England Journal of Medicine reports that currently 90% of health care fraud cases are "qui tam" actions, where whistleblowers with knowledge of alleged fraud initiate the litigation on behalf of the government. In a qui tam case, if the action leads to a financial award, the whistleblower stands to collect part of the recovery.

In a special report by the New England Journal of Medicine, twenty-six pharmacy industry whistleblowers were interviewed to investigate what motivated them to speak out about the whistleblowing experience, and how it changed them. The report found that even though the median monetary reward was $3 million, the overall sentiment was that the payoff was not worth the personal cost.

According to the report, most whistleblowers found that they discovered the wrongdoing within the company after starting a new job, or being promoted to a new job within the company. Eleven employees stated that they initially refused to participate in wrongdoing, and all but four of the eleven said that they took their complaints to higher management within the company before going to authorities. Five of these employees were fired as a result.

The whistleblowers reportedly stated that they were driven to report the wrongdoing within the company for public safety concerns, altruism, or integrity, as well as a sense of self-preservation and justice. None of the whistleblowers claimed that the possibility of a financial reward was a motivating factor. Of the employees interviewed, one employee didn't want to be responsible for someone dying from a drug, another didn't want to get blamed for wrongdoing, and one other employee claimed that standing up against a company engaging in fraudulent practices is the employee's responsibility and duty.

According to the WSJ, all of the employees who were interviewed received a large part of the lawsuit settlements, ranging from around $100,000 to $42 million. The majority of the whistleblowers perceived their monetary recovery to be small in comparison to the vast amount of time they spent on the case, and the damage and disruption to their professional careers.

In cities throughout Orange County, California and Southern California, contact our Anaheim employment attorneys at Howard Law, PC today.

'I Didn't Want to Be Responsible for Somebody Dying': Whistleblower, The Wall Street Journal, May 13, 2010

Whistle-Blowers' Experiences in Fraud Litigation Against Pharmaceutical Companies, The New England Journal of Medicine, May 13, 2010

Related Web Resources:

U.S. Department of Justice

United States Department of Labor