A pharmaceutical whistleblower is someone who reports suspected fraud or misconduct involving a drug manufacturer, pharmacy, pharmaceutical distributor, pharmacy benefit manager (PBM), or another organization in the pharmaceutical industry. Pharmaceutical whistleblowers are often current or former employees, sales representatives, scientists, healthcare professionals, contractors, or others with firsthand knowledge of the conduct.
When the misconduct causes false claims to be submitted to Medicare, Medicaid, or another government program, an eligible whistleblower may be able to file a qui tam lawsuit under the False Claims Act.
What is Pharmaceutical Fraud under the False Claims Act?
Companies engaged in pharmaceutical fraud may be liable under the False Claims Act for Medicare and Medicaid fraud in any case where the government loses money directly or indirectly. The False Claims Act’s “qui tam” whistleblower provision gives private citizens (such as pharmaceutical whistleblowers) the power to sue companies on behalf of the government.
Examples of fraud reported by pharmaceutical whistleblowers
- Kickbacks and inducements: Paying physicians, hospitals, pharmacists, or others to prescribe or favor certain drugs.
- Off-label marketing: Promoting drugs for uses not approved by the FDA in ways that cause false claims to be submitted for government reimbursement.
- Drug pricing fraud: Misreporting Best Price, Federal Ceiling Price, or other pricing benchmarks used by Medicare, Medicaid, or other government programs.
- 340B overcharges: Overcharging for drugs purchased through the federal 340B Drug Pricing Program.
- Substandard or adulterated drugs: Manufacturing, selling, or distributing drugs that do not meet required standards for quality, purity, or strength.
- False or withheld FDA data: Providing inaccurate safety or effectiveness data, or withholding required information, to obtain approval to market a drug or medical device.
- Patient assistance foundation schemes: Using donations or assistance programs to steer patients toward a manufacturer’s drugs.
- Drug switching: Substituting one medication for another without required notice or consent, potentially for financial gain.
Thanks to whistleblowers filing qui tam lawsuits, pharmacy benefits management companies have come under increasing scrutiny for pharmaceutical fraud.
Phillips & Cohen has brought “qui tam” whistleblower cases alleging pharmaceutical fraud in a variety of ways, including off-label marketing, kickback schemes, and other Medicare and Medicaid fraud practices.
Those pharmaceutical whistleblower cases – such as our record-setting cases against GlaxoSmithKline and Pfizer Inc. — have stopped illegal and improper marketing and sales practices that were harmful to patients’ health and possibly their lives. Pharma companies paid huge sums to settle those cases, and our clients received hefty whistleblower rewards for exposing and helping to stop those harmful practices.
How whistleblowers report pharmaceutical fraud
While this process can vary depending on the specifics of the case and jurisdiction, here are some general steps a pharmaceutical whistleblower might expect:
- Compile Evidence: Gather evidence of the fraud or misconduct.
- Consult a Pharmaceutical Fraud Attorney: Find an attorney experienced in whistleblower cases.
- File a Qui Tam Lawsuit: File a sealed qui tam lawsuit in federal court, with the assistance of your attorney.
- Government investigation: The government reviews the allegations while the qui tam complaint remains under seal.
- Government decision and unsealing: The government decides whether to intervene or decline to participate. After that decision, the court generally unseals the complaint, and the case may continue whether or not the government intervenes.
What protections and rewards may be available to pharmaceutical whistleblowers?
The protections and potential rewards available to a pharmaceutical whistleblower depend on the law and circumstances involved. Under the False Claims Act, employees, contractors, and agents may be protected from retaliation for lawful efforts to investigate, report, or stop suspected fraud. This protection may apply when someone is fired, demoted, suspended, threatened, harassed, or otherwise discriminated against because of protected whistleblowing activity.
A qui tam complaint is initially filed under seal while the government investigates. This keeps the complaint nonpublic during that period, although the case and the whistleblower’s identity may later become public.
If a qui tam case results in a government recovery, an eligible whistleblower generally may receive between 15% and 30% of the amount recovered, depending on whether the government intervenes and other factors. Learn more about whistleblower rewards.
How do pharmaceutical fraud whistleblower cases benefit the public?
Pharmaceutical fraud whistleblower cases benefit the public by recovering taxpayer funds, promoting drug safety, and holding companies accountable for misconduct. They also enhance transparency and encourage ethical industry practices, ultimately safeguarding public health and resources.
Why have pharmaceutical whistleblower cases become more significant in recent years?
Pharmaceutical whistleblower cases have gained significance in recent years due to heightened public scrutiny of the industry, increased regulation, and the potential for substantial financial recoveries. Concerns about drug pricing, safety, and the misuse of public funds have contributed to a greater focus on exposing pharmaceutical misconduct. Additionally, whistleblower programs and legal protections have improved, making it safer and more rewarding for individuals to come forward with information about fraud and wrongdoing in the industry.
Phillips & Cohen’s top pharmaceutical fraud whistleblower cases:
- GlaxoSmithKline paid $3 billion to settle a number of qui tam cases, including an off-label marketing case brought by Phillips & Cohen that resulted in the government recovering more than $1.5 billion out of the total settlement. It was the largest healthcare fraud settlement ever.
- Pfizer paid $1.8 billion to settle a qui tam case and a related criminal fine involving the off-label marketing of Bextra, a prescription painkiller. Pfizer settled other whistleblower cases at the same time, pushing the total settlement to $2.3 billion. The Pfizer settlement set a record at the time as the largest healthcare fraud settlement and now is second only to the Glaxo settlement.
- TAP Pharmaceuticals paid $875 million to settle a qui tam case we brought, a separate qui tam lawsuit and a related criminal charge involving illegal kickbacks to doctors.
- Cephalon Inc paid $425 million to settle a criminal charge and qui tam lawsuits filed by Phillips & Cohen and two other pharmaceutical whistleblowers involving the off-label marketing of Actiq, Gabitril, and Provigil.
We also have had successful qui tam whistleblower cases against other pharma companies such as Omnicare Inc., Alpharma Inc., Jazz Pharmaceuticals Inc. and Ortho-McNeil-Janssen Pharmaceuticals Inc.
Speak with a pharmaceutical whistleblower lawyer
If you have information about possible pharmaceutical fraud involving Medicare, Medicaid, or another government program, Phillips & Cohen offers free, confidential consultations. Our attorneys can discuss what you know, explain the laws that may apply, and help you understand potential next steps. Contact Phillips & Cohen