Excellent article by A Midwestern Doctor here. Well worth a read.
Many do not know this but Whistleblowing in the Pharmaceutical Industry is not very rare.
Whistleblowers can collect up to 30% of the fine or levy against the Pharmaceutical Company for Fraud and other Violations. This occurs in other Industries as well.
While some no doubt are motivated by more than money we can not ignore the fact there is a reward at the end for the successful whistleblower.
For example Brooks Jackson lawsuit against Pfizer could prove quite rewarding should she win, which is not to say she is not motivated by a more noble reason.
Of course, whistleblowers suffer quite a few hardships and rewards are not guaranteed , and even if they win it can take some time, so most Whistleblowers must have some means that allows them to live without much income during the process
Anyways, lets review some examples of more significant rewards from this article, and later some history taken from the article.
https://thedissenter.org/supreme-court-may-take/
Recent Awards
GlaxoSmithKline, a major pharmaceutical corporation, was hit with a record $3 billion fine in 2012 after marketing their drugs for “unauthorized uses” and cheating the US government’s Medicaid program. The result was a whistleblower reward of $250 million, which four individuals split.
Pharmaceutical corporation Johnson & Johnson entered into a $2.2 billion settlement with the US government in 2012 to end a lawsuit involving allegations related to fraud and kickback schemes perpetrated to sell three drugs: Risperdal, Natrecor, and Invega. A whistleblower received a $167 million reward.
In an ongoing case
A medical researcher filed a qui tam lawsuit against Roche Holdings in 2014 for claims involving Tamiflu, an oral antiviral prescription drug that Roche marketed and sold as a seasonal influenza treatment. The lawsuit alleges that the government purchased 50 million courses of Tamiflu based on false claims about the drug’s effectiveness.
Roche lost the latest round in the case in September when a federal district court judge denied the pharma company’s motion to dismiss. The lawsuit says that the federal government and state governments spent about $1.5 billion to stockpile Tamiflu as part of its Pandemic Influenza Preparedness Plan.
https://www.forbes.com/sites/erikakelton/2020/11/20/whistleblower-cases-are-a-warning-to-covid-19-vaccine-makers/?sh=600b16e47049
Now lets look at some more history.
President Abraham Lincoln signed the first False Claims Act in 1863 during the US Civil War. It became known as the “Lincoln law."
What the “Lincoln law” did was empower individuals to “prosecute fraud with or without the government’s participation.” Offending contractors could be fined $2,000 for each misrepresentation or false claims they made when requesting payment from the government.
The law was gutted by Congress in 1943 because the Justice Department claimed it did not need the assistance of whistleblowers when prosecutors already knew about the fraud. As Republican Senator Chuck Grassley recalled, this led to “absurd results that only hurt the taxpayer.”
Grassley, an advocate for the law, said it “basically meant that all whistleblower cases were blocked, even cases where the government only knew about the fraud because of the whistleblower.”
In 1986, Grassley helped to ensure that amendments to the False Claims Act were passed to restore power to private citizens to bring whistleblower lawsuits. It ensured that whistleblowers would receive a reward in return for risking their career or legal jeopardy. However, in order to convince President Ronald Reagan to sign the amendments into law, Grassley and other senators had to overcome institutional opposition within the Justice Department.
Jay Stephens and Stuart Schiffer, two senior DOJ officials, opposed restoring the False Claims Act. Stephens contended the Justice Department was doing a good enough job against defense contractor fraud and a stronger law would hamper their work, according to Mueller.
“The law,” Stephens said, “was an anachronism from a time when the United States had no central investigative force; now that the DOJ and the FBI existed, most qui tam whistleblowers were parasitic ‘bounty hunters’ who interfered with legitimate law enforcers and ultimately provided little useful evidence of wrongdoing.”
The counter to Justice Department officials was that the restoration of the False Claims Act was necessary to protect whistleblowers from retaliation. The amendments were needed to prevent a complacent and complicit Justice Department from entering into “sweetheart deals with powerful contractors.”
Justice Department officials remained opposed, even though Reagan declined to veto the amendments. In 1989, they argued to the US Supreme Court that the law was unconstitutional.
Bill Barr, who later became attorney general under Trump, was the assistant attorney general. He contended the False Claims Act represented a “devastating threat to the executive’s constitutional authority and to the doctrine of separation of powers.” He objected to how Congress empowered citizens to help stimulate government action against fraud.
“There has been a massive upsurge in qui tam actions—over 150 suits have been filed,” Barr cried. “These actions have disrupted the civil and criminal enforcement activities of the Department.”
“They have also undermined the executive’s ability to administer complex procurement contracts and, in some cases, have caused serious national security concerns. The 1986 Amendments have also spawned the formation of full-time ‘bounty hunting’ groups—ersatz departments of justice—that go about prosecuting civil fraud actions in the name of the United States.”
Barr was worried about groups representing whistleblowers, who could collect up to thirty percent of any recovery, because their effectiveness put the Justice Department to shame. He was ultimately unsuccessful in persuading the Supreme Court to neuter the False Claims Act.
So 1986 was a good year for Pharmaceutical Whistleblowers. This was also the same year that Vaccine Manufacturers received a liability waiver under the National Childhood Vaccine Injury Act , so no doubt is related, the former a bone thrown to those who were not too enthused about giving them a liability waiver , perhaps thinking it would help keep Big Pharma honest.
All that happened really was Big Pharma jacked up the price of their drugs to pay the big fines after the Whistleblowers were let loose. So the shareholders lost some dividends. Big Whoop. For every dollar they paid after getting caught they made 10. Just another cost of doing business.
Now lets fast forward
Under President Donald Trump, the National Whistleblower Center reported that US government recoveries under the law hit a “ten-year low.” Nearly $2.9 billion was recovered, but only $767 million of that money was a result of lawsuits by the government. Whistleblower lawsuits, however, yielded over $2.1 billion.
Barr was at it again in his position as Trump’s attorney general. The Justice Department dismissed an increased number of false claims cases for reasons that Grassley believed had nothing to do with the merits of the cases. It seemed prosecutors were intent to discourage whistleblowers and undermine efforts to root out serious fraud.
Bloomberg Law reported that the Justice Department moved to dismiss “at least 14 cases involving pharmaceuticals.” Eleven of the cases were brought by the National HealthCare Analysis Group, which alleged “violations of anti-kickback laws that prohibit improper marketing of drugs to medical professionals.” They were viewed as a “bounty hunting” group.
The National Whistleblower Center called attention to the fact that the Justice Department was attempting to dismiss a case against the pharmaceutical corporation known as Gilead Sciences. A whistleblower accused the corporation of “manufacturing drugs with contaminated ingredients from China” and unusually the Justice Department maintained it would be too costly to pursue the lawsuit.
Grassley and a bipartisan group of senators tried in 2021 to correct the issue of dismissals by the Justice Department by creating a test. Prosecutors would be required to “identify a valid government purpose and a rational relation between dismissal and accomplishment of that purpose.”
A whistleblower would then have the ability to challenge dismissal by “demonstrating that the dismissal is fraudulent, arbitrary and capricious, or illegal." But Big Pharma succeeded in blocking the amendments from inclusion in the 2021 infrastructure bill that passed. It was a major loss for whistleblowers.
“By raising false flags about these amendments and locking progress through complex and endless court cases,” the National Whistleblower Center warned, an “anti-whistleblower victory—which could open the floodgates for future attacks on these highly successful whistleblower protections”—was secured by lobbyists.
It might be interesting to see what the Supreme Court has had to say about Whistleblower cases
2014
Washington, D.C. June 19, 2014. Today, the U.S. Supreme Court issued a landmark whistleblower decision in the case of Lane v. Franks. The Court held that truthful testimony before a federal Grand Jury is “clearly” protected speech under the First Amendment.
The Supreme Court in an unanimous decision recognized the “importance” of protecting speech when “public corruption” is at issue, acknowledging that corruption cases “often require testimony” from government employees willing to blow the whistle on their managers. Demonstrating an awareness of the dilemma facing employees who witness fraud, the Court held that the failure to protect whistleblowers from retaliation “would place public employees who witness corruption in an impossible position, torn between the obligation to testify truthfully and the desire to avoid retaliation and keep their jobs.”
In a statement issued today, Stephen Kohn, Executive Director of the National Whistleblower Center, said: “Given the widespread use of Grand Jury proceedings to investigate securities, banking and tax fraud, today’s ruling will have widespread impact. It will have a direct and major impact on the willingness of public employees to expose corruption in government.”
“The right of every American citizen to truthfully testify about criminal activities, including fraud in government contracting, is a cornerstone to a democracy. Criminals – even if they are high-ranking elected officials or billionaire bankers, cannot retaliate against any person who truthfully testifies about their crimes,” Kohn said.
“Retaliating against whistleblowers who provide truthful information about potential federal crimes to federal law enforcement is already an obstruction of justice.
The Supreme Court has clarified that it is also unconstitutional. This ruling gives a green light to all public employees who have information concerning official corruption and fraud, and want to expose these crimes,” Kohn added.
In its amicus brief before the Supreme Court, the National Whistleblower Center cited to Supreme Court cases from 1884 and 1895, and pointed out that the Court had historically protected a citizen’s “duty and right” to testify in criminal proceedings.
https://www.whistleblowers.org/news/supreme-court-issues-decision-on-key-whistleblower-rights-case/
Well thats promising, but where are the government Whistleblowers today? Where are the Pfizer and Moderna Whistleblowers?
How are they being muzzled?
Now here is an interesting case before the Supreme Court now
Jan 13 (Reuters) - The U.S. Supreme Court on Friday agreed to consider reviving two lawsuits accusing pharmacy operators of overbilling government health insurance programs for prescription drugs, a dispute that could have broad implications for whistleblowers and the government's ability to go after fraud.
The key question in both cases is whether companies can shield themselves from whistleblower fraud lawsuits by pointing to an "objectively reasonable" interpretation of the law that supports their conduct - regardless of whether they actually believed that interpretation in good faith at the time.
That is what both Safeway Inc and SuperValu Inc, which was acquired by Rhode Island-based United Natural Foods Inc (UNFI.N) in 2018, argued in lawsuits filed by whistleblowers accusing them of defrauding Medicare and Medicaid. The Chicago-based 7th U.S. Circuit Court of Appeals agreed, granting judgment in favor of the companies. The whistleblowers appealed to the Supreme Court.
Both lawsuits claim that the pharmacy operators billed Medicare and Medicaid for prescription drugs based on artificially high sticker prices, while charging most customers paying for the drugs out of pocket much lower prices through discount programs.
The whistleblowers said that federal law required pharmacies to bill Medicare and Medicaid based on "usual and customary" prices that they actually charge customers. They also said both companies knew they were defrauding the government and worked to conceal their pricing practices.
The 7th Circuit agreed that the companies had overcharged the government. But it found they could not be held responsible for fraud because their billing practices were supported by an "objectively reasonable" interpretation of the law - even if they did not actually believe that interpretation and consciously intended to deceive the government.
The U.S. Justice Department had urged the Supreme Court to take the case and reverse the 7th Circuit, saying the appellate court's rulings frustrated the intention of a federal law called the False Claims Act that allows whistleblowers to sue for fraud on behalf of the government.
https://www.reuters.com/legal/us-supreme-court-weigh-key-standard-whistleblower-fraud-cases-2023-01-13/
Lets hope SCOTUS took this case on to smack down that ridiculous 7th Circuit Courts decision and not something more nefarious, such as to weaken the ability of whistleblowers to sue for fraud.