A law firm boldly announced this week that recent case law dealt “a significant blow to those seeking to premise [False Claims Act] suits on violations of current Good Manufacturing Practices.” Do they know something we don’t? Thankfully the answer is “No”!
Big pharma makes billions of dollars in profits each year. Despite all their money and profits, their record as good corporate citizens is terrible. That includes compliance with FDA manufacturing safety regulations called current Good Manufacturing Practices or “cGMP.”
So why did they write that article and why pharma’s premature claim of victory? Glad you asked.
First, the lawyers that wrote the article work for a giant law firm (1900 lawyers) that represents big pharma. Of course they want to dissuade possible whistleblowers from filing a claim.
Beyond the obvious bias of the writers, let’s examine their “evidence.”
Earlier this month, a federal judge in San Francisco dismissed a whistleblower case filed against Gilead Sciences, Inc. The case involved HIV / AIDS drugs manufactured by the company.
The whistleblowers in this case were a husband and wife, Jeff and Sherilyn Campie. Employed by Gilead, the Campies believed that Gilead had violated cGMP regulations.
The Campies filed their suit in March, 2011 pursuant to the federal False Claims Act. Although the government declined to intervene, the Campies courageously decided to pursue the fight on their own.
For those who may be new to whistleblower claims, the False Claims Act is a Civil War era law that allows whistleblowers to file suit on behalf of the government. If the suit is successful, the whistleblower is awarded a percentage of whatever monies the government receives from the wrongdoer.
To qualify for an award, one must have original source knowledge of a fraud involving a government program. Medicaid and Medicare are both healthcare insurance programs that receive federal dollars. That means whistleblower awards are often available in Medicare fraud cases.
Because the drugs in question were approved for use by Medicare drug and because the Campies possessed inside information, the first hurdles for filing a case were met.
Not every violation of FDA regulations is a violation of the False Claims Act, however. A recent federal appeals court decision suggests that a mere cGMP violation without more is insufficient for purposes of the False Claims Act. To qualify, there must be both a violation and a contaminated or adulterated product.
Let’s use an example. In our hypothetical, Big Giant Pharma makes penicillin. Of the many cGMP regulations, lets assume one says that a sample batch must be pulled from the production line and tested every 15 minutes. To cut costs, Big Giant Pharma only tests every 20 minutes.
In the above example, Big Giant Pharma is breaking the law and Medicare pays the company millions of dollars per year. Unless there is a problem with the drugs produced, however, there probably isn’t a False Claims Act whistleblower case. Sure, the FDA can fine the company for not following regulations but patients are still getting safe, quality drugs.
At its core, the False Claims Act is an anti-fraud statute. Although the government is always free to enforce its own laws, whistleblowers are limited to certain actions.
In this case, the Campies said Gilead changed its manufacturing practice without proper approvals. A cGMP violation? Of course. Were the drugs worthless? No. (Worthless services or products can also give rise to a False Claims Act.)
Ultimately, the court dismissed the Campies’ whistleblower suit on very technical grounds. The decision is hardly a victory for big pharma, however, and certainly is not a death knell for future cGMP whistleblower claims.
We applaud Jeff and Sherilyn Campie for their diligent efforts. At the end of the day, however, we were not surprised that the Justice Department refused to intervene in their lawsuit nor were we surprised when the case was dismissed.
Notwithstanding this case, our belief in cGMP violations and the False Claims Act remains unshaken. We invite people with inside knowledge of both cGMP violations AND worthless or adulterated products to step forward. Pharmaceutical cases have resulted in some of the largest whistleblower awards in history. Some industry insiders have received tens of millions of dollars.
Anyone with inside information of fraud or adulterated products can bring a claim. This includes quality assurance personnel, factory workers and executives. Awards can be paid to whistleblowers anywhere in the world.
All inquiries are protected by the attorney – client privilege and kept completely confidential.
MahanyLaw – America’s Whistleblower Lawyers