Blowing the Whistle on Big Pharma in South Carolina
The largest drug manufacturers, collectively known as “Big Pharma,” are not immune to whistleblowers when fraud and malfeasance are the order of the day. In 2015 alone, $96 million in settlements and judgments involved claims against the pharmaceutical industry. In 2014, the amount was $1.1 billion when it came to resolving False Claims Act cases involving pharmaceutical companies.
Make no mistake—many of the drugs available to us today extend and improve our lives and are truly wonder drugs. But it is good to remember that drug companies are in it to make money. Under an ethical capitalist system, this is good. But when the individuals who run the companies go astray in their pursuit of profits, fraud and wrongdoing can follow. That’s where the role of the whistleblower comes in.
Who Are “Big Pharma”?
Five of the ten largest drug companies in the world are located in the U.S. The ten biggest pharmaceutical companies are, in order:
- Pfizer (USA)
- Novartis (Switzerland)
- Sanofi (France)
- Roche Holding (Switzerland)
- Merck & Co. (USA)
- GlaxoSmithKline (UK)
- AstraZeneca (UK)
- Eli Lilly & Co. (USA)
- Abbott Laboratories (USA)
- McKesson (USA).
These ten companies control trillions of dollars and employ hundreds of thousands of people. If you take any prescription drugs on a regular basis, there’s a good chance that your drugs are either manufactured by or were developed by one of these ten largest corporations.
Illegal Actions that Violate Federal Laws
Violations of federal laws that whistleblowers most commonly encounter almost always involve money and payments in some form, such as kickbacks and pricing fraud:
- Off-label marketing. Medicare and Medicaid do not pay for drugs that are prescribed for uses other than what has been approved by the FDA. While in some cases doctors are allowed to prescribe drugs for off-label usage, they are not supposed to hide the real reason for the prescription so that Medicare and Medicaid will pay. Pharmaceutical companies who push for the prescribing of their drugs for off-label usages often employ some form of illegal kickbacks.
- Illegal kickbacks. It is against the law for pharmaceutical companies to provide any kind of financial incentives to doctors or hospitals to prescribe certain drugs. Financial incentives can include cash bonuses; free vacations, meals, and other entertainment; payments to attend conferences; excessive payments to serve on boards; unrestricted grants or research funding; phony drug trials; and free samples that doctors sell to patients.
- Best-price fraud. If a pharmaceutical company wants to sell its drugs to Medicaid, it must promise to charge the lowest price based on other sales. However, sometimes companies use a price to sell to Medicaid that is higher than their actual best price through a series of discounts and rebates.
- 340B drug pricing program overcharges. Related to best-price fraud is 340B drug pricing program overcharges. This program requires drug manufacturers to grant large discounts to hospitals and other providers that serve a significant number of poor, disadvantaged, or uninsured patients.
- Pharmaceutical benefits manager (PBM) fraud. PBMs were originally created to help insurance companies manage and administer their prescription drug plans and the resultant claims. Kickbacks, and illegal rebates and discount arrangements with pharmaceutical companies, along with switching medications and canceling prescriptions to hide failures to meet contracts, are among some of the FCA frauds that can be committed and prosecuted. One famous PBM whistleblower case involved Medco Health Solutions. A recovery of $185 million was the final result.
Other kinds of pharmaceutical fraud and wrongdoing that do not appear as often under False Claims Act cases are:
- Selling adulterated drugs
- Unreported manufacturing deficiencies where the drugs are produced
- Not reporting side effects and other adverse events to the FDA, such as birth defects and suicidal behavior
- Providing the FDA with false data for drug trials
- Less common violations of federal laws concerning the sale of drugs, such as selling drugs without a license, or anyone other than the drug’s manufacturer re-importing any exported drugs.
False Claims Act Cases Involving Pharmaceutical Corporations
One study of documents from 2000 to 2010 found that False Claims Act cases brought against pharmaceutical companies amounted to 25 percent of all FCA cases during that time. The past few years have seen a number of significant settlements. The following occurred in 2015:
- Daiichi Sankyo Inc., which has its U.S. headquarters in New Jersey, was alleged to have made false claims involving Medicaid that involved kickbacks to physicians. They paid $39 million.
- AstraZeneca LP and Cephalon Inc. were alleged to have paid out less than they were supposed to under the Medicaid Drug Rebate Program. The companies settled with the U.S. for $26.7 million (AstraZeneca) and $4.3 million (Cephalon). Both companies also forked over $23 million to state Medicaid programs.
- PharMerica Corporation was alleged to have asked for, and received, kickbacks from Abbott Laboratories in exchange for pushing the drug Depakote for nursing home patients. PharMerica is the second-largest nursing home pharmacy in the U.S. They settled with the U.S. for $9.25 million.
In one huge 2014 settlement, Johnson & Johnson and two of its subsidiaries paid $1.1 billion to resolve FCA claims involving the drugs Risperdal, Invega and Natrecor. It was alleged that they promoted these drugs for uses not approved by the FDA as safe. The settlement was one of the largest for health care fraud in U.S. history.
And, in a 2014 South Carolina case, a judge struck down a defense crucial to drug companies trying to avoid state lawsuits. The ruling underlined that the secrecy conditions of federal whistleblower suits can create exceptions to state statutes of limitations involving how long someone has to bring a case. That includes the state of South Carolina. The ruling is good news for all of us who pay taxes.
Help for Whistleblowers, from Louthian Law
If you have knowledge concerning fraud against the government, an experienced whistleblower attorney like the ones at the Louthian Law Firm can assess your case and help you file the necessary disclosure statement. In some instances, the government will intervene (take part in your lawsuit).
One of the most important reasons to contact a qualified whistleblower attorney is that you are much more likely to meet with success if your claim is clear, concise and substantive. The Louthian Law Firm can help you structure your claim in such a way that the government will be more likely to intervene in your case, possibly increasing the chances that you will recover reward money. Even if the government doesn’t decide to intervene, it might still be advisable to pursue your case without government involvement, with our strong support through every step of the process.
For a free, confidential evaluation of your case, call the Louthian Law Firm today at (803) 454-1200 or fill out the online contact form. Louthian Law Firm. Seeking truth. Securing justice.