Whistleblowing in the Pharmaceutical Industry in the United States - Brown, LLC

Whistleblowing in the Pharmaceutical Industry in the United States

May 16, 2023

The importance of whistleblowing in the pharmaceutical industry

Perhaps one of the most critical industries to blow the whistle in is in the pharmaceutical industry where lack of quality controls and/or falsification of approval methods can lead to catastrophic life altering consequences to scores of people. In the past certain pharmaceutical products deliberately downplayed risks of their products such as pulmonary embolism incidents, or its link to cancers, and consequently physicians and consumers could not make educated decisions about whether the benefit of the product outweighed its side effects.  People died.  People suffered strokes and other embolic events. People withered from cancers that had they had known about the risks would have steered clear of the product.  So not only did big pharma fail in its cardinal function in improving people’s lives, they ripped those lives from them for the sake of profits and concealing the truth.  There’s no way to combat this conduct early without the assistance of insiders who know what is truly going on and stepping forward invoking whistleblower statutes.  

When the products are purchased by a government insurance program like Medicare or Medicaid or Tricare, it is considered Medicare fraud if the company conceals quality issues or approval issues and it can be remedied through the False Claims Act whistleblower statute.  Compound that with the ability to allege that the pharmaceutical company may have fundamentally lied to its shareholders in falsely stating that a product was approved or is passing quality inspections when it’s not, and the insider has the ability to file an SEC whistleblower case anonymously with the use of an SEC whistleblower law firm.  One such example tangentially involved the Roundup NHL link in which an insider disclosed falsification of earnings due to the product – which even though is now owned by a pharmaceutical company Bayer, is an industrial weed killing product.  

Examples of pharmaceutical fraud and their consequences

There are many different types of pharmaceutical fraud. Pharmaceutical fraud refers to fraudulent activities related to the production, distribution, or sale of pharmaceutical products. This can include a range of illegal or unethical actions, such as misrepresenting the safety or efficacy of a drug, falsifying data in clinical trials, or engaging in kickbacks and other illegal practices to promote the use of certain drugs.

Examples of pharmaceutical fraud can include:

  • Marketing a drug for a use that has not been approved by regulatory authorities – Off Label Promotion, Off Label Marketing
  • Concealing or downplaying the risks associated with a drug
  • Offering bribes or kickbacks to healthcare providers to encourage them to prescribe a particular drug
  • Falsifying data in clinical trials to make a drug appear more effective or safer than it actually is
  • Engaging in price gouging or other anti-competitive practices

Pharmaceutical fraud can have serious consequences for public health, as it can lead to the use of unsafe or ineffective drugs, unnecessary healthcare costs, and actual harm to the patients.  Oftentimes when there’s pharmaceutical fraud depending on the popularity of the product there can be hundreds of millions of dollars at stake for the company, for the whistleblower lawsuit and as a possible pharmaceutical whistleblower reward so it’s important to speak with a pharmaceutical fraud lawyer to know your rights.

Falsification of the FDA approval process for new drugs

One type of pharmaceutical fraud is the falsification of the FDA approval process for a New Drug Application (NDA).  This is prohibited and can dovetail into a mass tort when people are injured by the signature injuries that were suppressed in the initial application.   There is always some degree of gamesmanship when applying for an NDA and some techniques inhibit transparency. For example, some companies deliberately run their product testing on people in countries in which there are privacy laws that hinder a full audit trail. 

In the example of a control group with 1000 people sampling the product, eliminating the placebo sample, individuals who exhibit side effects are all supposed to be fully reported. But for example, if someone has an embolism while on the product, the pharmaceutical company will look for other factors that could have caused the embolic event, such as family history, long flights, etc and attribute the event to the external factors and ask for the individual to be excluded from the census, without equally finding and out and still including other similarly situated individuals with the same factors. There’s many ways during this process for companies to thumb the scale and if falsification of the approval process creates a dirty chain that the government would not have paid for the product had it gone through proper approvals which could implicate False Claims Act liability as well as SEC whistleblower liability for publicly traded companies.

Adulteration and quality control issues in pharmaceutical manufacturing

Another type of pharmaceutical fraud process is with adulteration and quality control. The manufacturers most maintain and adhere to CGMP. CGMP is the Current Good Manufacturing Practice regulations enforced by the FDA.  Testing methods to audit the quality of the drugs are agreed upon through the approval process with the FDA. If the company deviates from the agreed upon testing method it could trigger liability. If the company adulterates the product to pass agreed upon testing it could trigger liability and if the company releases quarantined lots without retesting there may be liability. Falsification of the results without testing, or with a failed test also are grounds to hold companies liable.  A consistent theme amongst all the whistleblower streams is the maintenance of a reliable audit trail is critical to ascertain what happened when, and the destruction of the trial may lead to certain negative inferences against the company.  

False Claims Act settlements

Some of the biggest False Claims Act settlements we’ve seen have been insiders, especially sales representatives, who blow the whistle on off-label promotion of a product or know about kickbacks. Off label promotion or off label marketing is when the product was approved for one medical use, but there may be indicia that has not been fully vetted about another quality of the product that may be desirable for individuals. For example, a product to treat prostate enlargement may incidentally grow hair back, but unless expressly approved by the FDA for hair restoration, the pharmaceutical company is prohibited from marketing it in that manner. As an example, GlaxoSmithKline agreed to pay $3 billion to settle FCA claims related to off-label promotion, false claims, and other allegedly illegal practices. The settlement included $1 billion in criminal fines and forfeiture and $2 billion in civil damages, making it one of the largest healthcare fraud settlements in history which also entitled the whistleblowers to a whistleblower reward exceeding $100 million.  

Kickbacks are prohibited under the False Claims Act and the Anti-Kickback Statute (AKS). Kickbacks in the pharmaceutical industry could be direct payments in exchange for prescribing the product, but most of the time it takes an indirect complexion, such as furnishing free trips or elaborate speaking fees to induce the use of the product. Many pharmaceutical companies walk a very thin line and internally try to justify the conduct by offering seminars and information with lavish free accommodations and to supposedly obtain provider feedback, when in fact no feedback is actually given, or if it is, no one genuinely monitors it. The pharma company may offer multiple junkets to their best prescribers with seminars that largely regurgitate the same content. All of these symptoms may be indicative of a ruse concealing the fact that the conduct is tantamount to a kickback. Oftentimes the kickbacks go hand in hand with off label promotion.  

All in all, the system relies on pharmaceutical whistleblowers to do the right thing and expose problems that may place the population at large at risk. Millions of people may be impacted by pharmaceutical products and if it’s unhealthy or may be unhealthy it’s critical to end the practice and alert the authorities and speak to a pharmaceutical fraud lawyer. Yes, there have been hundreds of millions of dollars of whistleblower awards that have gone to pharmaceutical insiders, but the money is secondary to people’s lives – so when you have the chance to do the right thing, you should do the right thing. Some of the best pharmaceutical whistleblower law firms like Brown, LLC offer free confidential consultations and are only paid if they win your case, so if you see something, say something, and go over your options on how to make it right – it’s just too important to keep quiet about – pharmaceutical fraud is an area of law where silence could kill.