Back in 2003 Karl Schumann filed a whistleblower suit alleging that as an executive with benefits company Medco, he learned that Bristol-Myers Squibb and AstraZeneca paid kickbacks to Medco to buy and recommend brand name drugs.  The federal government investigated for six years and decided not to participate.

In January 2013 the trial court dismissed Karl’s case because he wasn’t the “original source” of the allegations.  They had been reported in other lawsuits and in the news media.

Last Monday the Third Circuit upheld the dismissal, agreeing with the trial court that Karl was not an original source as required of False Claims Act whistleblowers.  What’s more, the court stated that the requirement of “direct and independent knowledge” imposes two separate requirements.  “Direct knowledge” is first-hand knowledge seen with the whistleblower’s own eyes and obtained solely by the whistleblower.

“Independent knowledge” means knowledge that’s not “dependent on public disclosure” by someone else.

The court ruled that Karl failed the requirements.  Karl’s lawyer says he’s disappointed in the outcome.

The case is U.S. ex rel. Schumann v. AstraZeneca, Case No. 12-1489.