Senator Grassley Shines Spotlight on Whistleblower Protection in the Pharmaceutical Industry and Seeks Data From Drugmakers on Treatment Of Whistleblowers

Great news Whistleblowers! U.S. Senator Charles Grassley, principal sponsor of the 1986 Amendments to the False Claims Act (FCA), co-sponsor of the Whistleblower Protection Act of 1986, and lead sponsor of the Fraud Enforcement and Recovery Act of 2009, and a personal champion of the effort to eradicate Medicare and Medicaid fraud, has brought renewed attention to how the major players in the pharmaceutical industry educate their employees on their rights under the FCA, including the right to be free from retaliation for initiating a false claims lawsuit, and the avenues available for exercising those rights.

Whistleblowers play the central role in ensuring corporate compliance with their ethical and financial obligations to the government and the American public. As false and fraudulent claims in the pharmaceutical industry continue to eat deeper into Medicare and Medicaid funds and threaten to derail health care funding in the U.S., the crucial role of whistleblowers in exposing health care fraud and abuse is receiving renewed attention from Washington. Recent studies indicate that 90% of health care fraud cases are uncovered and prosecuted by whistleblowers, leading to a recovery of over $ 3 billion from false claims lawsuits in the last three years.

Sen.  Grassley, who has long recognized the role of employees in uncovering enormous health care fraud in the pharmaceutical sector, commenced a laudable effort on June the 28th to verify the compliance of 16 major pharmaceutical companies with laws protecting their direct employees and indirect employees (employees of agents and contractors) and other whistleblowers from retaliation for exposing fraud on the government and taxpayers.  Sen. Grassley’s letters to the 16 pharmaceutical companies request updated data on their compliance with the law requiring a written FCA policy and employee training and education on the FCA, including the whistleblower provisions and anti-retaliation protections of the FCA, as well as State civil or criminal laws on exposing health care fraud and protecting the whistleblower.

Sen. Grassley’s efforts are meant to make it easier for individuals with knowledge or evidence of fraud to come forward without risking their career in the process, as well as to ensure that corporate policies have been updated to reflect changes in the law, and truly further the goals of the FCA by educating employees on the FCA and encouraging them to expose health care fraud. According to the senator, “drugmakers have a public responsibility to safeguard the tax dollars that pay for their products,” and to promote “a culture where those who speak up about possible fraud are rewarded rather than retaliated against.”

The 16 pharmaceutical companies targeted by the Senator are:

• Abb0tt Laboratories
• AstraZeneca Pharmaceuticals LP
• Amgen Inc.
• Boehringer Ingelheim Corporation
• Bristol-Myers Squibb Company
• Eisai Corporation of North America
• Eli Lilly and Company
• Forest Laboratories, Inc.
• GlaxoSmithKline
• Johnson & Johnson
• Hoffmann-La Roche, Inc.
• Merck & Co., Inc.
• Novartis P Corporation
• Pfizer, Inc.
• Sanofi-Aventis, and
• Takeda Pharmaceuticals North America, Inc.

They are expected to respond by the 20th of July with specific information on:

• Changes or updates to corporate policy on educating employees about the FCA
• Employee education on the whistleblower anti-retaliation provisions of the FCA, including avenues for filing false claim lawsuits
• Corporate process for handling employee complaints about possible FCA violations
• Performance of the corporate FCA compliance program in encouraging employees to come forward with allegations of possible FCA violations
• Corporate policies to ensure fair treatment of employee complaints of possible FCA violations
• Any complaints of unfair treatment or retaliation made by whistleblowers
• Any modification of FCA compliance policy in light of the extension of whistleblower protections to contractors and agents.

If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

Relevant Links:

Bloomberg News July 1, 2010 report
Press release from Senator Grassley’s office on the letters

Learning Tree International Charged Government for Courses That Never Occurred, Will Pay $4.5 Million

On April 7, 2010, the Department of Justice announced the settlement of a False Claims Act case involving Learning Tree International Inc. The company has agreed to pay the federal government $4.5 million to resolve allegations that it improperly invoiced federal agencies in advance for information technology training courses that were never actually provided.

Under its contract with the General Services Administration (“GSA”), Learning Tree sells information technology training courses to the federal government in multi-course packages known as “vouchers” or “passports.” To prevent the United States from paying for training services that are not actually rendered, the contract specifically requires that Learning Tree invoice the government only after services are provided.

The settlement resolves allegations that Learning Tree knowingly invoiced federal agencies in advance for multi-course training packages before employees of the purchasing agencies had attended the full number of courses available under each. The government further alleged that upon expiration of the training packages, Learning Tree retained federal funds that the company received in connection with unused courses without providing a refund or credit. As a result, Learning Tree received federal funds for training courses that were not, in fact, provided.

“Government contractors must deal fairly and honestly with the United States,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “When federal funds are being misused, we will take action to protect the taxpayers.”

If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

Medical Device Manufacturer Lied About Internal Heart Defibrillators, Will Pay Over $296 Million

On April 5th, 2010, the Department of Justice reported the settlement of a False Claims Act involving Guidant LLC.  The medical device manufacturer has agreed to pay over $296 million to resolve allegations that it lied to the Food & Drug Administration (FDA) to cover up fatal errors in three of its implantable cardioverter defibrillators. These lifesaving devices are used to detect and respond to abnormal hearth rhythms that, if left untreated, can result in death within minutes.

Guidant pleaded guilty to withholding information from the FDA regarding catastrophic failures in three of its devices: the Ventak Prizm 2 DR (Model 1861) and the Contak Renewal (Models H135 and H155). Specifically, Guidant admitted to: (1) making a materially false statement in a required submission to the FDA with regard to the Ventak Prizm 2DR device; and (2) failing to notify the FDA of a “correction” to the Contak Renewal devices, which the company made to reduce a risk to health caused by the devices. As a result of these offenses, the agreement calls for Guidant to pay a combined criminal penalty in excess of $296 million.

“The guilty plea today should serve as a reminder and deterrent to those who would break the laws requiring honesty and cooperation with government regulators whose mission is to protect the health and safety of the public,” said Frank J. Magill, Acting U.S. Attorney in this case for the District of Minnesota . “The health care laws are as important as ever. When medical device and pharmaceutical companies fail to live up to their legal obligations, serious criminal consequences will follow.”

Today’s entry of a guilty plea by Guidant LLC and the proposed resolution would represent the largest criminal penalty ever imposed on a device manufacturer for violating the Food Drug and Cosmetic Act,” said Commissioner of Food and Drugs Margaret A. Hamburg, M.D. “The FDA will continue to commit enforcement resources to seeking this type of criminal resolution and stiff sanctions when device manufacturers fail to adhere to the statutory and regulatory requirements that exist to ensure the safety and efficacy of their products.”

If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

Alpharma to Pay $42.5 Million for Kickbacks and Misinformation Campaign Over Morphine-Based Drug

On Tuesday, March 16th, the Justice Department announced the settlement of a False Claims Act case involving the pharmaceutical company Alpharma Inc. The drug manufacturer, now a subsidiary of King Pharmaceuticals Inc. of Bristol, Tennessee, agreed to pay $42.5 million to resolve allegations with its marketing of the morphine-based drug Kadian.  Between January 1, 2000 and December 29, 2008, Alpharma was found to have bribe health care providers to promote and/or prescribe Kadian, and also made false claims about the safety and efficacy of the drug.

“Health care decisions must be based solely upon what is best for the individual patient and not on which pharmaceutical company is paying the doctor the biggest kickback,” said Rod J. Rosenstein, U.S. Attorney for the District of Maryland.

The lawsuit was initiated by a whistleblower, Debra Parks, through the qui tam provisions of the False Claims Act, which allows private citizens to expose fraudulent behavior with government money and share in any recovery. Of the $42.5 million recovered in the case, Ms. Parks will receive $5.33 million.

If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

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