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Whistleblower Law;
How To File A Whistleblower Lawsuit against your company; Step by step process for how whistleblower lawsuit are pursued
Examples where pharmaceutical companies  paid multimillion dollar penalties for alleged fraudulent marketing activities.             

Is your company cheating the Government?
Turn them in: You stand to earn millions of dollars :

WhistleBlower Law And The Pharmaceutical Industry
(Qui Tam Provisions Of The False Claims Act; by Kenneth J. Nolan, P.A.)

Whistleblower Q&A

How much money can I make if I file a whistleblower lawsuit and I win?
A: Some recent whistle blowers have received $100,000,000 or more.  Of course, the lawyers get one third of that.  If you lose, you will get nothing.  In general, the mega million dollar payouts are involved in industries where big money is involved such as pharmaceuticals, insurance and defense contracting.

   Here is a recent newspaper report about a gouip of Florida
   pharmacists who filed a whistle blower lawsuit against a drug
   Owners of Key West pharmacy split $26 million settlement his is the
   fourth large case the pharmacy owners have benefited from. They have
   earned more than $70 million and have gotten the government more
   than $700 million, said their attorney James Breen []
Editor's Note: In this instance the Whistleblowers pocketed $26 million of
   the $150 million settlement that large drug company payed out; these are
   the same whistleblowers who pocketed  $70 million in 3 other lawsuits.

I think my company is cheating the government.  Should I file a
whistleblower lawsuit?
A: This is a personal decision.  Filing whistleblower lawsuits require a courage and taking a huge risk.  There is a chance that you will lose the lawsuit and have to find a new job.  Also, word will get out that you are a whistleblower and you may become an outcast in your industry.

Q: I thought that it is forbidden to punish or retaliate against people who file whistle blower lawsuits against their company?
A: Technically this is true.  However in the real world companies find creative ways to make life so hard for you that you quit on your own accord. 

Q: Can I file a whistleblower lawsuit on my own?
A: No - you need a lawyer who specializes in this area.  These suits can drag on for years and they are considered to be too difficult for most
lawyers unless they specialize in Qui Tam or Whistleblower law.

How Do I Initiate a Whistleblower lawsuit?

1 - Documentation
If an employee believes they have seen false claims or kickback
behavior and desires to report his employer, their first step would
usually be to legally document proof and gather evidence.  [ They
typically keep copies of all voicemails, e-mails and other paperwork
they feel document inappropriate activity].

2 - Anatomy Of A Case
The whistleblower cannot simply report false claims behavior to the
government. They need to find a
Qui Tam lawyer, with experience in
the False Claims Act arena, to prepare a case.  The case must be
worked up in detail in order to increase the chances of the government
review of the case.  These cases are typically taken on contingency. 
That is, the lawyer does not get paid, unless the case is successful and
the whistleblower gets paid. 

Assuming the whistleblower has sufficient content, cases take anywhere from 3 weeks to 1 year to work up. The attorney, along with the
whistleblower, prepare a book of facts called a "disclosure memorandum"
which includes witness briefs and documents that will serve as
background information for filing the case.  This step in the process
usually involves hiring consultants in order to assure that the
inappropriate activity giving rise to violations of the False Claims Act
can be substantiated.

3 -Government Intervention
The case is then provided to the Department of Justice and the local
United States Attorney's office. They then have a period of time in
which they, and other offices such as the Inspector General of the
Department of Health and Human Services, can investigate the alleged fraud.  The FBI also investigates false claims cases, as well as agents
from the FDA and the Defense Criminal Investigative Service.  Prior to
making the decision of whether or not to intervene, the government
typically chooses to discuss the circumstances with the whistleblower,
and conduct its own investigation.

The government typically takes one in every five
qui tam cases that
are filed.  However many lawyers take the cases the government
does not, because they feel that they have enough information to
move forward without the fruits of a government investigation.  [ In fact,
a case involving off-label sales of Neurontin  that is currently being litigated is not a government case].

4 - Qui Tam Actions Are Filed Secretly
Whistleblower lawsuits are filed "under seal" in federal court.  This means that neither the company the case is being filed against nor anyone else
other than the government is informed. Q
ui Tam cases based on the
same or similar allegations cannot be filed more than once. The team
that is first to file the case will be the only team that can prosecute. 

Once the government decides to intervene or not, the seal is lifted,
the company is informed of the allegations against it and a lawsuit
proceeds like any other civil lawsuit. 

How do you get your money if you win the case?
Most cases are resolved with a Settlement Agreement. 
The government will present the allegations provided by the
whistleblower, together with the fruits of its own investigation, and  then
negotiate reimbursement.  Typically the government is looking for
repayment of damages, meaning repayment of the money that the
government overpaid due to the fraudulent actions of the pharmaceutical
company.  If the company does not settle, then the case proceeds just
like any other civil lawsuit.

Can My Company Fire Me If They Find Out
I have A Whistleblower Lawsuit against them?
The government dictates that an employee who is discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of  lawful acts done by the employee on behalf of the employee or others In furtherance of an action" under the FCA is entitled to "all
relief necessary to make the employee whole."

That means that if you can prove you were fired or denied promotion or punished in any way after the suit is filed your company would be sued again and you would be entitled to "two times the amount of back
pay, interest on the back pay, and compensation for any special
damages sustained as a result of the discrimination, including litigation
costs and reasonable attorneys' fees."

However people don't want to return to work in a company where they've blown the whistle so this is not a big issue.

About the author:
Kenneth J. Nolan P.A. has significant experience litigating whistleblower
cases.  Mr. Nolan is a nationally recognized attorney who specializes in 
*qui tam/ False Claims Act recoveries. Mr. Nolan has recently been
selected for the Bar Register of Preeminent Lawyers.  He has also been
selected as a "Leading American Attorney" by his peers. 
See also: History of whistleblower Law | Typical illegal practices

History Of The Whistleblower Law:

The purpose of the Qui tam provisions of the False Claims Act is to
encourage private individuals who are aware of fraud being
perpetrated against the government to bring such information forward. 

The law goes back to 1863 when it was enacted as a watchdog over
Federal government expenditures for the Civil War.  The law made
Civil War profiteers pay heavily for defrauding the government, while
at the same time incentivizing the reporting of such activities by
people who came to be known as "whistleblowers"

The whistleblower (
qui tam) provisions of the Federal False Claims
Act (FCA) is a powerful, but little-known, law that gives average men
and women substantial financial rewards and protection for exposing
intentionally false or fraudulent claims for federal funds.

What are the Financial Rewards to Whistle Blowers?
The whistle blowers are entitled to a considerable portion of the money
recovered (between 15% and 30%) in these cases.  [ Sometimes, the
whistle blowers' rewards are in the greater than $100 million
neighborhood as in the Lupron/TAP case ].

Having learned about the whistle blower law, in recent years,
increasing numbers of principled sales reps, managers, vice presidents,
physicians, and others with inside information have initiated
multi-million-dollar FCA lawsuits against pharmaceutical companies
that have allegedly defrauded Medicare, Medicaid, and other federal
healthcare programs. 

Famous Pharmaceutical Whistleblower Lawsuits

In 1987, 33 cases were filed; in 2002, they rose to 320.
Qui tam
recoveries in cases in which the U.S. government intervened were a
mere $200,000 in 1987, but rose to $1.04 billion in 2002--many of
them pharmaceutical-related.

As the FCA statute becomes more widely understood and used,
recoveries to the government and
qui tam whistleblowers or
"relators" (the technical term for individuals who file suit) will surely rise.

Off-Label, Kickbacks, Bribes
As FCA lawsuits have shown repeatedly, some pharmaceutical
representatives have knowingly engaged in illegal sales and marketing
practices: offering kickbacks to doctors, HMO and hospital formularies
for choosing or recommending their products over others; artificially
inflating average wholesale prices; concealing "best prices"; violating
FDA limits on the marketing of drugs off-label; providing free samples
of injectable drugs that doctors can prescribe at a profit; paying for
phony drug trials; and giving doctors sham speaker and consultant
fees, grants, honoraria, preceptorships, all-expense-paid trips, and
other inducements to use or recommend their products.

Several pharmaceutical companies currently face Department of
Justice probes of their sales and marketing practices, while others
have already paid substantial criminal and/or civil fines.

In October, 2001, after a corporate executive and a doctor blew the
whistle, TAP Pharmaceutical Products, Inc., the joint venture of Abbott
Laboratories and Takeda Chemicals of Japan, agreed to pay $875
million in civil and criminal penalties and pled guilty to a criminal charge
of conspiring with doctors to submit false claims to government insurers
for Lupron.

The case involved an alleged kickback scheme which included free
samples and educational grants. In addition, TAP allegedly maintained
an artificially high reported price for Lupron, on which government
payments were calculated.

At least six physicians who received free samples of Lupron and billed
the government for reimbursement were indicted, along with TAP
employees, including three district managers. For their respective roles
in exposing the TAP scheme, one whistleblower received $17.2 million;
the other, $77.9 million.

In January, 2001, after a Bayer marketing executive filed a successful
FCA lawsuit, Bayer agreed to pay $14 million to the federal government
and 45 states to settle a
qui tam lawsuit, alleging that the company
engaged in average wholesale price manipulation practices that induced
doctors and home health agencies to use its drugs and led to inflated
reimbursement claims to Medicaid.

The whistleblower received $1.6 million. Again, in April 2003,
Bayer agreed to pay $257 million in criminal fines and civil recoveries
to settle allegations of fraud against Medicaid in connection with the
marketing of Cipro and Adalat CC. The whistleblower's estate received
$34.2 million.

In October, 2002, A national account executive for Parke-Davis received
a relator's share of $5.9 million for blowing the whistle on his company's
concealing the $250,000 in cash discounts (concealed as "unrestricted
educational grants") that it gave to a managed care company to get
Lipitor on the plan's formulary.

The government alleged that Pfizer underpaid Medicaid rebates by more
than $20 million. Pfizer, parent company of Parke-Davis, agreed to
pay $49 million to settle the allegations.

In June, 2003, AstraZeneca agreed to pay $355 million in criminal
fines and civil liabilities as a result of its pricing and marketing of its
drug Zoladex. The company was alleged to have set the average
wholesale price for Zoladex at level far higher than the prices physicians
actually paid for it, creating a financial inducement for doctors to
prescribe it, and that the company failed to report the discounts as
"best prices" as the basis for calculating Medicaid rebates.

A vice president for sales at one of AstraZeneca's competitors blew
the whistle on it and received a relator's share of $47.6 million.

In May, 1999, Genentech pled guilty to a criminal charge and paid a
$30 million fine, admitting that it had unlawfully attempted to expand
the market for Protropin for burns and certain kidney disorders, when t
he drug had only been approved by the FDA for long-term treatment
of growth failure in children. In addition, it paid a civil settlement of
$20 million to reimburse government expenditures under Medicaid

In 1996, Dr. David Franklin filed a
qui tam lawsuit on behalf of the United
States, alleging that Parke-Davis engaged in the illegal marketing and
off-label promotion of Neurontin, causing physicians to prescribe it for
uses that the FDA had not approved. The lawsuit also alleged that
Medicaid programs had been wrongfully paying for these off-label
uses, resulting in millions of dollars of fraudulent payments.

In 2004, the Neurontin lawsuit was settled.  Pfizer had to pay a
$430 million fine.  The whistleblower pocketed a $26.6 million reward.

There are currently multiple, ongoing government investigations
looking into pricing and marketing practices that may violate the
Federal Anti-Kickback Statute, "repackaging arrangements" that abuse
the Medicaid Rebate Program, questionable pharmacy benefit manager
practices, and illegal manipulating of average wholesale price.

The thread running through all of these cases is illegal practices at
pharmaceutical companies causing extremely costly FCA lawsuits,
none of which would have occurred if companies had carefully followed
federal law.

Companies that violate the FCA are liable for a civil penalty, plus
three times the amount of damages which the government sustains.
For example, if a drug manufacturer caused false claims of $10 million
to the Medicaid program, it would be potentially liable for up to
$30 million, plus a civil penalty of from $5,500 to $11,000 for each
drug claim that was submitted for reimbursement.

At the same time, it must be substantiated by a separate disclosure
memorandum, served on the government, containing all facts and
circumstances known to the relator concerning the false claims.

Eventually, the government will either proceed with the action or
decline to do so. If it proceeds, it has "primary responsibility for
prosecuting the action." If the government declines, the relator has
the right to continue on his or her own.

If the government intervenes, the relator is entitled to 15 to 25 percent
of the total recovery, depending upon the extent to which her or she
"substantially contributed to the prosecution of the action."

If the government declines to intervene, the relator is entitled to 25 to
30 percent of the total recovery. Under either scenario, the relator is
entitled to reasonable attorneys' fees and costs.

In response to the flood of industry scandals and lawsuits, many
pharmaceutical companies have developed aggressive compliance
information, training, and enforcement programs to avert fraud for
each segment of its supply chain.

Once in place, such a program may lessen the potential penalties
that companies would face if a violation occurs--but only if companies
can demonstrate that they are serious about regularly training and
updating all of their employees about fraud and abuse, and taking steps
to weed out those employees still engaged in kickback activity.

Failure to implement such a preventive strategy could result in monetary
penalties and a government-mandated Corporate Integrity Agreement
(CIA), which is often expensive and burdensome to comply with.
Currently, six pharmaceutical companies have entered into CIAs as a
result of False Claims Act settlements. 

qui tam lawsuits, False Claims Act settlements, and voluntary
compliance should be no surprise, as the handwriting was on the wall
years ago. In 2001, the pharmaceutical industry banned together
through the Pharmaceutical Research and Manufacturers of America
(PhRMA) to adopt a voluntary Code on interactions with physicians.

Adopted on April 18, 2002, the new Code went into effect for PhRMA's
members on July 1, 2002. While the effectiveness of a voluntary
code may be questionable for some people, it marked a first step in
the recognition that compliance with the Federal Anti-Kickback Statute
has increasing importance.  An introduction to the thought process
behind the formulation of the code as well as the text of the code is
available online at .

In addition, in April, 2003, the U.S. Department of Health and
Human Services, Office of Inspector General released its final
"Compliance Program Guidance For Pharmaceutical Manufacturers,"
referred to hereafter as "Guidance." The Guidance notes that the
PhRMA Code, adopted in 2002, provided useful and practical advice
for reviewing and structuring relationships with physicians, and that "adherence to the Code will substantially reduce the risk of fraud
and abuse and help demonstrate a good-faith effort to comply with
the application federal healthcare program requirements."

The Guidance "explains the value of compliance programs and details
specific elements that pharmaceutical manufacturers should consider
when developing and implementing an effective compliance program,"
Inspector General Janet Rehnquist said at the time of its release.

The Guidance identified three major potential fraud and abuse risk
areas for pharmaceutical manufacturers: (1)integrity of data furnished
by manufacturers for Medicaid Rebate calculations, Medicaid Best Price
calculations, and reporting Average Wholesale Price; (2)kickbacks and
other illegal remuneration--sham grants, phony educational conferences,
phony advisory boards, excessive payments for physician's consulting
and research services, and offering inappropriate entertainment,
recreation, travel, meals, gifts, gratuities, and other business courtesies
to physicians and other healthcare providers in order to influence the
prescribing of drugs; and (3)compliance with laws regulating drug
samples, ensuring that sales representatives are not offering free samples
to physicians or others to induce them to prescribe or purchase a
product, with the understanding that the sample is not for indigent use
but for the physician or other to bill for the same. The text of the
Guidance is available online at [ 56 page document
- may take a moment to load ]

Much of the conduct addressed in the Guidance is ancient history, as
the deterrent effect of the six or so successful
qui tam lawsuit
settlements has certainly taken place.

Nevertheless, since the statute of limitations for FCA actions is six
years, and many cases have been under seal for years, more cases
are sure to come. The Guidance may be the best indicator of the
breadth of the types of conduct which will be exposed in the future.

In the end,
the best defense a pharmaceutical company can have
against FCA action and government enforcement against it is a good
offense: creating a corporate culture that actually encourages--even
financially rewards--whistleblowers within its organization to come
forward internally before they would even consider filing a FCA

Again and again, it has been shown that one of the greatest motivations for people to blow the whistle is that they
have been ignored
by higher-ups, demoted, or even fired
at the mere suggestion
of correcting obvious, intentional abuses within their company.

Wise pharmaceutical companies can save themselves millions of
dollars, untold bad publicity for themselves and the industry as a
whole, and unwanted government oversight if they turn whistleblowers
into friends--before they become their foes.

About the author:
Kenneth J. Nolan P.A. has significant experience in *qui tam/ False
Claims Act recoveries. Mr. Nolan has recently been selected for the
Bar Register of Preeminent Lawyers. According to Martindale-Hubbel, it
is the only directory of its kind to feature the nation's most esteemed
legal practices. He has also been selected as a "Leading American
Attorney" by his peers.
See Also: History of whistleblower Law | Typical illegal practices
See Also: Kenneth J. Nolan Home Page
See Also: Frequently Asked Questions Regarding False Claims Act

*Qui tam = A unique mechanism in the law that allows persons and
identities with evidence of fraud against federal programs or contracts
to sue the wrongdoer on behalf of the government.
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