Federal Judge Orders Justice Dept. to Stop Shortchanging Drug Company Whistleblower
The U.S. Department of Justice has been rebuked by a federal judge for shortchanging a whistleblower who helped the government sue a pharmaceutical company for marketing drugs for unapproved uses.
The case against Endo Pharmaceuticals ended with the Justice Department winning a $192 million settlement, which stemmed from the company committing “a decade’s worth of fraud that ripped off Medicare and Medicaid for over $700 million dollars,” according to the Corporate Crime Reporter.
The fraud occurred in connection with Endo’s marketing of the prescription drug Lidoderm, which had not been approved by the Food and Drug Administration as safe to use, according to the Justice Department.
The whistleblower who proved vital to the case, per a federal judge, received 19% of the award. Peggy Ryan’s lawyer insisted she deserved 24% under the False Claims Act (pdf).
In the end, Judge Robert Kelly sided with Ryan and awarded her 24%—$33.6 million—close to the 25% maximum allowed by the law. Kelly described her efforts as “nothing short of extraordinary.”
Ryan was key to building the case against Endo. During the course of what turned into a decade-long ordeal, she wore a hidden wire that generated more than 200 hours of incriminating audio tape recordings for the government.
Ryan “provided not only the spark for the investigation, but … nurtured the flame at the darkest times when the possibility of a favorable outcome seemed most remote,” Kelly wrote. “Peggy Ryan wore a wire, risked her career, and invested 9 years of her life in this fight. Her lawyers had millions of dollars tied up in this litigation. Nothing would have happened if a whistleblower had not stood up, spoken up, and lawyered up.”
Kelly called the Justice Department’s position on shortchanging Ryan “ridiculous.”
“While they are tight-fisted when it comes to rewarding integrity, they often pull their punches when it comes to fining fraudster companies,” he pointed out.
-Danny Biederman, Noel Brinkerhoff
To Learn More:
Judge Slaps Department of Justice for Minimizing False Claims Whistleblower Contribution (Corporate Crime Reporter)
Endo Pharmaceuticals and Endo Health Solutions to Pay $192.7 Million to Resolve Criminal and Civil Liability Relating to Marketing of Prescription Drug Lidoderm for Unapproved Uses (Department of Justice)
United States v. Endo Pharmaceuticals (U.S. District Court, Eastern Pennsylvania) (pdf)
Chicago Sues Drug Companies over Painkiller Marketing (by Noel Brinkerhoff, AllGov)
Two California Counties Sue Narcotics Makers over Deceptive Marketing (by Ken Broder, AllGov California)
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