There are many junctures in the U.S. healthcare system that enable fraudulent activities, and one of the biggest has to do with pharmaceutical companies. The U.S. Food and Drug Administration (FDA) and the Department of Justice (DOJ) do all that they can to detect and prosecute pharmaceutical fraud, waste, and abuse. However, the federal government often needs the help of whistleblowers to bring evidence of fraud or other misconduct in the pharmaceutical industry, whether it's involving pharmaceutical companies or drug manufacturers, to the agencies’ attention.
If you think that you have evidence of pharmaceutical fraud and are considering becoming a pharmaceutical whistleblower, here are four things to know.
1. What Pharmaceutical Fraud Looks Like
Like with many other forms of fraud, pharmaceutical fraud can come in a huge variety of forms, with fraudsters coming up with new ways of deceitfully lining their pockets every year.
However, some leading types of pharmaceutical fraud that we have seen in the past have been:
- Drug companies bribing doctors to prescribe the prescription drug or medical device they produce (illegal kickbacks)
- Marketing drugs for off-label use (off-label marketing)
- Manufacturing, selling, or distributing drugs that are below standard or that have been adulterated (tainted drugs, violating the Current Good Manufacturing Practice regulations)
- Lying about compliance measures for the Quality Systems Regulations (QSRs)
- Overcharging for drugs in the 340B drug discount program
- Using false or misleading data in marketing campaigns
- Creating drug compounds that are commercially available elsewhere
- Omitting, misrepresenting, or withholding information in disclosures to the FDA
- Incorrect benchmark prices to Medicare or Medicaid that pharmaceutical companies report
Because obtaining evidence of these kinds of misconduct often requires an insider’s access in a pharmaceutical company, pharmaceutical whistleblowers are usually employed by companies that manufacture, sell, or market prescription drugs.
2. Retaliating Against a Whistleblower is Prohibited
Because so many whistleblowers get access to the incriminating information through their employment relationship, one of the most pressing concerns in whistleblower law is how to protect them from workplace retaliation. That is why nearly every whistleblower statute includes provisions that forbid whistleblower retaliation or discrimination.
It is important to note, though, that the details differ between many of these laws, and those details can have a huge impact in your workplace rights and what you can recover if your employer violates them after you report pharmaceutical fraud.
The good news for pharmaceutical whistleblowers is that many instances of pharmaceutical company fraud, waste, or abuse are covered by the federal False Claims Act (31 U.S.C. §§ 3729 et seq.) because they implicate a federal healthcare programs, like Medicare or Medicaid, or a government contract. The False Claims Act’s anti-retaliation provision, 31 U.S.C. § 3730(h), is among the most potent out of all of the federal whistleblower laws.
This provision does not just cover retaliation that leads to your discharge. It also forbids workplace:
- Harassment
- Discrimination
- Demotion
- Suspension
Your employer violates the Act’s anti-retaliation provision if they even threaten to retaliate against you for reporting pharmaceutical fraud.
If your employer retaliates anyway, the Act provides legal recourse in the form of a wrongful retaliation or termination lawsuit. Unlike other, similar lawsuits, those that stem from False Claims Act retaliation can recover:
- Back wages, plus interest
- A civil penalty equal to twice your back wages
- Other losses, like emotional distress or lost reputation, caused by the retaliation
- Court costs and attorneys’ fees associated with the retaliation lawsuit
In addition to what is essentially three times the wages that you would have earned, you can also get reinstated to your former position or recover front pay if you no longer want to work there.
3. You Could Recover a Substantial Whistleblower Award
The False Claims Act is also one of the most lucrative whistleblower statutes, providing awards of between 10 and 30 percent of what is recovered in the case.
Most other whistleblower statutes provide similar percentages to the people who proffered the information that led to the lawsuit. What the False Claims Act can recover, though, is very different.
The False Claims Act is different from other whistleblower laws in that it imposes treble damages against defendants who have defrauded a government program or committed fraud on a government contract. That means three times the amount of the fraudulently-obtained money can be recovered.
Additionally, the False Claims Act imposes a civil penalty for each fraudulent statement or act committed. The amount of this penalty is based on inflation, and is between $13,508 and $27,018 in 2024 (28 C.F.R. § 85.5). If the pharmaceutical company made many false claims over the course of the fraudulent scheme that you have found, those civil penalties can accumulate very quickly.
Even if you only get 10 percent of the proceeds of your case, the award can still be significant and potentially even life-changing.
4. What You Can Expect if You Move Forward
Whistleblower cases are unique in that there are three parties involved, rather than just two:
- The whistleblower
- Law enforcement
- The defendant committing the misconduct
They begin when you find something that makes you suspect that pharmaceutical fraud, waste, or abuse is happening. After digging deeper and becoming more convinced that your suspicions are accurate, the best step is to hire a whistleblower lawyer.
“An experienced whistleblower lawyer will have guided numerous clients in the past through the extremely delicate investigation that you are about to embark upon. A lawyer will have a far better understanding of the risks that you are about to face, how to avoid them, and how to obtain as much strong evidence as possible to support your case. They can also reduce the amount of stress that you will feel throughout this difficult and uncertain process.” – Dr. Nick Oberheiden, pharmaceutical whistleblower attorney and founding partner of the national law firm Oberheiden P.C.
Once you and your legal team have put together enough evidence to make a compelling case, the next step is generally to file a qui tam lawsuit in federal court. This lawsuit is filed under seal, so the target of your investigation is not aware of its existence.
While it is under seal, federal law enforcement agents – typically from the DOJ or the FDA – will investigate your claim. Based on their investigation, they will decide whether to intervene in your case or not.
If they decide to intervene, the case will be unsealed, the agency will take over the investigation and the prosecution, and you will take a smaller role assisting the government.
If they decline to intervene, the case will remain under seal and you can decide whether to advance on behalf of the government, prosecuting your case without their help.
From start to finish, this process can take multiple years.
