Many times, we only learn about corruption and fraud because a whistleblower was brave enough to come forward. Whistleblowers often put their careers and reputation at risk because they believe in standing up for what’s right. There are federal, state, and local laws that encourage people to speak out and provide certain protections.
One such law is the False Claims Act (FCA). This law dates back to the Civil War and rewards whistleblowers who file anti-fraud lawsuits against contractors that defraud the government. It is credited with returning $67 billion to the government from military contractors, banks, and pharmaceutical companies.
Pfizer’s History With The False Claims Act
But a series of federal court decisions have lawmakers concerned about the effectiveness of the law. Pharmaceutical companies such as Pfizer are attempting to block legislation that would update it. And no wonder, given its history.
In 2009, Pfizer agreed to pay $2.3 billion in fines to settle criminal and civil liability for Pfizer's illegal promotion of Bextra pharmaceutical products in a False Claims Act lawsuit. Pfizer also agreed to enter a long-term Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The enormous amount Pfizer agreed to pay included a huge criminal fine of $1.3 billion.
Though the drug had only been approved by the FDA for the treatment of arthritis and menstrual cramps, Pfizer marketed it for the treatment of acute and surgical pain issues. Six whistleblowers received payments totaling $102 million.
In 2018, Pfizer agreed to pay $23.85 million to resolve False Claims Act liability for paying kickbacks and entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG).
The five-year CIA requires, among other things, that Pfizer implement measures designed to ensure that arrangements and interactions with third-party patient assistance programs are compliant with the law. In addition, the CIA requires reviews by an independent review organization, compliance-related certifications from company executives and Board members, and the implementation of a risk assessment and mitigation process.
But while paying massive criminal and civil fines for alleged kickbacks and False Claims Act violations, Pfizer, Inc. funds massive "research" grants and "general payments." In 2020, for example, Pfizer self-reported payouts of $738,318,346.22 – including $21.8 million directly to physicians.
Sen. Chuck Grassley, R-Iowa, is leading the Congressional effort to update the FCA. The False Claims Amendments Act of 2021 aims to strengthen the law by addressing judicial interpretations of the “materiality” requirement. This was an issue in the 2016 U.S. Supreme Court case Universal Health Services v. United States ex rel. Escobar.
The legislation also addresses discovery costs for the government, dismissal authority of the Department of Justice and the definition of “employee” in the law’s anti-retaliation provision.
Corporations & Lobbyists Working To Defeat Legislation
The measure has run into intense corporate opposition, with many firms including Pfizer hiring lobbyists to fight its passage. The bill was blocked in an initial test vote and an attempt to add it to the bipartisan infrastructure agreement failed.
Pfizer, Amgen, Genentech, Merck, and AstraZeneca are companies known to have lobbied against the bill. All have paid nine-figure settlements over health care fraud because of the False Claims Act. Many companies are lobbying against the bill through undisclosed third-party groups, including the U.S. Chamber of Commerce.
Trade groups such as the American Bankers Association, American Hospital Association, the Pharmaceutical Research and Manufacturers of America, and the Healthcare Leadership Council have also lobbied against the bill and have not disclosed which companies have directed their actions.
Watchdog groups that work to reduce government waste continue to support the update. These groups include Taxpayers Against Fraud, the Project on Government Oversight, the Government Accountability Project, and the National Whistleblower Center.
It is still unknown whether the bill has enough support to pass in Congress. But Pfizer and other large corporations have made their positions on it very clear.
Legal Help Is Available
The whistleblower attorneys at Brewer & Pritchard, P.C. proudly represent the rights of whistleblowers throughout the country. We have extensive experience handling complex cases and fighting for the best possible outcome. Learn more about how we can help by contacting us to schedule a consultation.