Whistleblower Law Blog : Whistleblower Lawyer & Attorney : LaBovick Law Firm, Florida : Federal False Claims Act, Qui Tam

Doesn't it just astound you how drug companies can continue to get busted on breaking the law and then pay mind-boggling, incredibly large fines and STILL have the capacity to break the law again?

Pretend you actually owned a drug company.  Even if it wasn't your drug company that was previously caught manipulating doctors, selling off label, and generally breaking any rule or regulation you wish, simply to drive sales - wouldn't another drug company's punishment be enough to scare you away from doing those same actions? Obviously the answer is a resounding NO. I continue to ask myself, how can this be?  This GSK $3 billion settlement proves to me that drug sales over time are so incredibly profitable that breaking the law and paying huge fines is of no consequence to the drug companies!   As a shareholder in large companies it would bother me tremendously to learn that our company is either acting illegally or unethically within the medical community.  

However, we see no shake-out in major shareholders from those drug companies. It will be interesting to see if any large shareholders pull out of GSK now that this settlement has been announced. Institutional shareholders make their decision as to whether to retain the stock of any investment solely based on the level of profit and return on investment over time. They will not consider the moral legal or ethical obligations they have to their shareholders to invest in only those stocks that play by the rules. 

So here is the lesson that we, the public, must learn about corporate behavior:  when thinking about corporate behavior, the only consideration is the bottom line!  There is no room in a corporation's behavior or in an institutional investment strategy for legal, moral or ethical obligations to be upheld unless those decisions negatively impact the profit.  Otherwise, if paying $3 billion makes you $27.5 billion then everyone is happy, right?

As the powerless muddled masses who look at the world around us, we need to support the only social system that protects us (normal, working class people) from them (powerful corporations who can pay $3 billion fines with a smile on their face).  The only weapon the average US Citizen has against the large corporate entity is the power of the jury trial. That is it! No other system keeps law breaking corporate entities in check. Obviously billion dollar fines don't scare them.  If we lose our right to go to court to redress our grievances we will lose our ability to protect ourselves and our loved ones from the profit-motivated amoral decisions of the large corporation. 

Something to think about!

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Two billion dollar days for the US Attorney in a row! On January 6, Johnson & Johnson settled a U.S. probe into their anti-psychotic drug, Risperdal, for $1,000,000,000! According to the Bloomberg news, J&J is going to resolve their long running dispute over Risperdal for a whopping $1 billion. This settlement should cover all the damages each individual state has against J&J as well as the US government’s federal claims. Given GlaxoSmithKlein just settled a claim for $3.2 billion, this settlement shouldn’t hurt J&J too badly. Johnson & Johnson is the largest health product company in the world. If Glaxo can pay $3 billion and that doesn’t count the civil claims against them for Avandia, certainly J&J is better off settling for $1 billion now. The civil settlement may not have included a possible plea deal against Johnson for criminal penalties! Now that is HARSH! They are going to pay $1 billion and STILL pay a criminal price for their allegedly illegal sales practices. The investigation against Risperdal has been going on since 2004. The allegation is that the company was “off label” marketing the drug. That means the drug was being marketed for uses that were not approved by the FDA.

In this case, the Whistleblowing Qui Tam Plaintiff could earn $150,000,000!

Interestingly, the civil cases against J&J for Risperdal have been varied, with two states finding for against the company while two other states found for the company. We will see how this settlement effects the pending civil litigation in the future.

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Avandia cases are getting ready to settle or explode:

GlaxoSmithKlien is ready to either pay out or be bleed to death in Avandia cases. Recently they agreed to pay $3 Billion dollars to the Feds to avoid criminal and civil penalties and a trial. That case dealt, at least in part, with improper marketing of their defective drug, Avandia. Over the past few years Plaintiff lawyers have gathered and filed over 30,000 Avandia injury cases in a multidistrict litigation. This is because Avandia was supposed to control diabetes but was actually causing heart attacks. Glaxo knew of the heart attack danger but covered it up. Now Glaxo has settled over 10,000 of 30,000 cases in the MDL but is still fighting the remaining 20,000 claims. So far, (above the $3 billion dollars they paid the government), Glaxo has paid about $700,000 in claims to injured patients.

Now the court is getting impatient with Glaxo. The Judge recently gave Glaxo 75 days to settle up at least 85% of the remaining cases or they would be set for trial. It seems pretty obvious to all of us attorneys involved with Avandia, that after paying a $3 BILLION dollar fine and $700 MILLION in damages, Glaxo KNOWS Avandia was a bad drug and should settle the remaining cases.

We will see that Glaxo actually does, but my bet is their bank account is a lot deeper then the remaining cases. If they can pay the government and the first set of plaintiffs 3 billion 700 million dollars, they can settle up with the rest of the poor people they injured!

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HEY WHISTLEBLOWERS! Are you interested in making a huge amount of money? I am betting there are plenty of drug company executives and sales people who are salivating at the possibility of turning their employer into the government for illegal marketing schemes. Over the past few years, the health and drug industry has been busted for multiple violations of federal law and paid huge money in Qui Tam whistleblower cases.

The numbers on some of the cases are staggering. In many health care provider cases, the payouts have been in the hundreds of millions of dollars to settle Qui Tam Whistleblower lawsuits. When this happens, the Whistleblower is entitled to between 15% and 30% of the total funds recovered by the government.

Recently, the mega drug maker GlaxoSmithKline agreed to pay $3 BILLION dollars to the Federal Government to avoid civil and criminal penalties which government prosecutors alleged were created when Glaxo orchestrated an illegal marketing scheme for a group of their most popular drugs. The allegations included ripping off the Medicaid social funds program and promoting off label use for the drugs. This is the largest settlement between a drug company and the government related to illegal marketing practices in US HISTORY! It certainly beats the pants off the 2009 settlement Pfizer paid of $2.3 billion.

This new agreement will close a long running chapter in Glaxo’s history. The US Attorney in Colorado and Massachusetts shared the investigation and prosecution of this mega case. The charges included off-label promotion of Wellbutrin a well known anti-depressant and included the Government’s investigation into the often mentioned defective diabetes drug, Avandia. You may remember Avandia being taken off the market last year by the FDA unless it was given as a drug of last report! This was because it was causing heart attacks instead of helping with diabetes, a somewhat consequential problem for Glaxo. Avandia was promoted as a safe drug when Glaxo knew that Avandia was causing heart attacks and strokes.

I am sure my Qui Tam clients are dreaming about being the Qui Tam Whistleblower’s in a $3 BILLION DOLLAR pay out case. Even at the statutory minimum payout of 15% the Whistleblower in this case should receive a nice check for $450,000,000.00!!! Now that is a good day at the office! The best part of it all is that a company that was breaking the law was brought to justice!

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