On July 30, 2013, Pfizer Inc., one of the world’s largest pharmaceutical companies, announced its finalized agreement to pay $491 million to the U.S. government in order to resolve accusations that the company and one of its subsidiaries defrauded the U.S. healthcare system. Under the settlement, Pfizer will pay $257 million in order to resolve civil allegations that Wyeth Pharmaceuticals Inc., owned by Pfizer, engaged in illegal marketing that led to false claims being brought to Medicare and similar healthcare programs. Pfizer will pay the other $234 million of the settlement in order to cover criminal fines and penalties.
According to allegations in the lawsuit, Wyeth Pharmaceuticals had illegally marketed a transplant drug named Rapamune for uses that had not been approved by the U.S. Food & Drug Administration (FDA). Patients use Rapamune in combination with other drugs following kidney transplants. However, Wyeth’s advertising campaigns advocated the drug for unapproved applications, such as use after liver, lung, heart, pancreas, and islet transplants. According to a U.S. attorney, this type of off-label marketing endangers patients and erodes the population’s confidence in the FDA. In 2002, the FDA required Wyeth to place a “black box warning,” the most stringent type of warning required by the agency, on the Rapamune product label. This warning would advise people of the risks inherent in using Rapamune after liver transplants. One year later, the FDA required a similar type of warning with regard to the use of Rapamune after lung transplants. Nevertheless, claims up to 90% of Wyeth’s Rapamune sales were allegedly for “off-label” uses.
The $491 million settlement resulted from two qui tam lawsuits filed against Wyeth Pharmaceuticals Inc. Under provisions of the False Claims Act, private citizens with knowledge of fraud committed against the government can file a qui tam lawsuit on behalf of the United States. The individual filing the lawsuit is known as the relator or whistleblower. Healthcare whistleblowers, such as the persons who brought the lawsuits against Wyeth, serve an important role in exposing and eradicating healthcare fraud. Many whistleblowers have personal knowledge of deceptive practices because they work for the companies that submit false claims to the Government. By relating their knowledge to the appropriate authorities, these individuals can assure that healthcare programs can achieve their intended benefits to Americans with the greatest need of federal assistance.
In the first case, the False Claims Act whistleblowers were Marlene Sandler and Scott Paris. They jointly filed a lawsuit in Pennsylvania that alleged aspects of off-label marketing. At the time, the Government declined to intervene and the relators commenced to litigate the case on their own. Two years later, a second qui tam whistleblower, Mark Campbell, came forward. Mr. Campbell is a former Wyeth sales representative who worked for the company for twenty years. Throughout the tenure of his employment, he became aware of Wyeth’s off-label marketing practices. After he filed his lawsuit against Wyeth in the U.S. District Court for the Western District of Oklahoma, the Department of Justice intervened in the Sandler and Paris action. The Government then transferred the matter to the Oklahoma court and consolidated the two cases. The three Medicare fraud whistleblowers have aligned their interests and cooperated to help the investigation into Wyeth’s actions.
Because the whistleblowers took on a personal risk in bringing allegations against their employer and they devoted their time in relaying information vital to the case, they will obtain a significant proportion of the settlement. False Claims Act whistleblowers typically receive 15% to 25% of settlements. That means that Ms. Sandler, Mr. Paris, and Mr. Campbell will all potentially receive millions of dollars from Pfizer Inc.
