One Louisiana doc's made millions blowing the whistle on big pharma. Is that problematic?
On Tuesday, pharma giant Pfizer agreed to a nearly $785 million settlement with the U.S. Justice Department over allegations that the company's Wyeth subsidiary overcharged the federal Medicaid program for the heartburn medication Protonix.
It's far from the first such settlement for either Pfizer or Wyeth, which also settled a $490 million case in 2013 over the marketing for the immunosuppressive med Rapamune (as well as about a half a dozen other cases since 2002).
According to the DOJ, healthcare fraud comprised $1.9 billion of the $3.5 billion in False Claims Act-related recoveries in 2015 and a staggering $16.5 billion of the $26.4 billion recovered under the FCA since the early days of the Obama administration in 2009. And a major component of those healthcare settlements stem from pharma companies.
But as the Financial Times points out, one interesting aspect of this latest case is that one of the whistleblowers who brought forth the suit, New Orleans' Dr. William LaCorte, has made millions by suing a litany of pharma companies in False Claims Act cases over the last 20 years. That includes a big case involving Merck and a heartburn medication back in 2008 which reportedly led to a nearly $40 million payout (before taxes and legal fees), and the Protonix settlement could potentially net even more.
Whistleblowers, or "relators," in False Claims Act cases receive a share of any successful fraud-related settlement, typically in the 15% ballpark. And the existence of so-called "serial whistleblowers" like LaCorte have led some to ask whether this system of payouts can have unintended consequences, such as frivolous lawsuits. One idea that's been floated to counter that possibility is creating lifetime caps on whistleblower payouts.
But whistleblower advocates and fraud watchdogs, such as Taxpayers Against Fraud co-director Patrick Burns, have a very different take on the matter. Centering on the whistleblowers in biopharma fraud cases amounts to "missing the forest for the trees" and tarnishing people "with serial integrity," Burns told BioPharma Dive in an interview.
Burns isn't the type to mince words when it comes to bad behavior in pharma. "Why aren't you talking about serial fraudsters?" he asked. "How many cases has Pfizer been nailed for? How many cases has Wyeth been nailed for? Novartis? DaVita? These are companies with massive credibility problems and cultures of corruption."
"98% of U.S. companies have no apparent integrity problems... But pharma companies are nailed again and again and again. And the question here really has to be, why do these companies have a culture that winks at lying, cheating, and stealing?"
He also points out that the large sums cited as whistleblower payouts are misleading, since they don't include the cost of paying for the whistleblowers' legal teams or taxes, or cases (such as the Pfizer/Protonix one) where there is more than one relator involved. Furthermore, Burns asserts that such cases take years and years to build and it's no easy task to become a whistleblower against multibillion dollar corporations.
Pharma companies, for their part, insist that such fraudulent behaviors are actively discouraged and amount to the actions of a few bad actors. But that also raises the question of whether or not simply fining firms, rather than concurrently pursuing more personal punitive action against the individual fraud perpetrators, is an effective strategy.
Several of the largest False Claims Act settlements on record include biopharma companies like GlaxoSmithKline, Pfizer, Johnson & Johnson, Abbott Labs, and Merck.
- Financial Times Pharma whistleblower takes total payouts close to $100m