Whistleblowers Offered Substantial Rewards for Uncovering Pharmaceutical Manufacturing Problems

Increasingly, federal investigators have been turning their attention to manufacturing deficiencies at some of the world’s largest drug makers. According to one industry report, the number of FDA inspection reports has skyrocketed to an all-time high. This focused attention comes on the heels of a recent report from the US General Accountability Office, which found that the FDA failed to adequately inspect a number of manufacturing facilities around the globe.

The added governmental exposure has shed the light on a number of problems, likely encouraging a weekly parade of drug recalls from pharmaceutical companies. For some companies, they have led the parade of FDA warnings and recalls on a number of occasions. For example, Johnson & Johnson has repeatedly tangled with the FDA, most recently when it was warned by the FDA about problems at its Cordis stent facility. Last year, this same company temporarily closed a large Pennsylvania facility and recalled an estimated 136 million bottles of liquid children’s Tylenol and other pediatric products, after quality controls failed.

However, the real driving force behind this surge of pharmaceutical mea culpas probably has less to do with federal investigators and more to do with pharmaceutical industry’s concerns about potential False Claims Act qui tam actions. The simple fact is that drug makers are now on notice that employees can bring successful whistleblower suits involving current Good Manufacturing Practices (cGMP) violations.

The extended reach of whistleblowers was made crystal clear last year, when the U.S. Department of Justice joined in a whistleblower action against GlaxoSmithKline, exposing systemic manufacturing deficiencies at the company’s Puerto Rico facility. Ultimately, the company settled the action for $750 million, and the whistleblower was handsomely rewarded to the tune of $96 million.

In a very real sense, the GlaxoSmithKline settlement has encouraged other potential whistleblowers to step forward and uncover other instances of cGMP violations. More importantly, because the False Claims Act provides incentives and protections for these whistleblowers, drug companies cannot simply disregard their concerns. The lasting impact is that, whether through recalls or False Claims Act settlements, drug companies are forced to fess up to fraud and unsafe manufacturing practices.

For more information about qui tam law and pharmaceutical fraud, contact Nolan and Auerbach, P.A.