AmerisourceBergen Corp.'s recent $625 million False Claims Act settlement stemmed in no small part from misconduct uncovered by whistleblowers outside the company, showing that anyone with glimpses of shady business practices may be able to stitch together a massive fraud case.
The mammoth payout — among the 10 largest FCA deals in history involving pharmaceuticals — resulted from three suits filed by four whistleblowers. One of those whistleblowers was a consummate insider: a former chief operating officer at AmerisourceBergen Specialty Group who was also a member of Amerisource's corporate ethics committee.
But the other three whistleblowers weren't employed at all by Amerisource. Instead, they worked in health care settings where patients used drugs from a purported Amerisource pharmacy. The whistleblowers all became concerned that the drugs were being mass-produced in ways that violated federal law, and they eventually compiled detailed allegations that the U.S. Department of Justice credited when announcing the settlement on Oct. 1.
"You can never assume that a company's fraudulent conduct will be hermetically sealed off such that only insiders can find it," Jeanne Markey, a partner at Cohen Milstein Sellers & Toll PLLC who was not involved in the case, told Law360.
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There have been a few previous instances of true outsiders becoming superstar whistleblowers in FCA litigation. One example is Louisiana doctor William St. John LaCorte, who has helped secure several eye-popping FCA settlements, including a $785 million payout tied to overbilling by Pfizer Inc. unit Wyeth.*
Another example is Ven-A-Care of the Florida Keys Inc., which has secured numerous FCA settlements collectively worth hundreds of millions of dollars by exposing unlawful price inflation throughout much of the pharmaceutical industry.*
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"There will always be categories of outsiders who may be situated such that they may identify the fraud, most obviously the targets of the fraudulent marketing," Markey said. "Doctors, pharmacists, subcontractors [and] even competitors with experience and expertise may not know exactly what is going on, but they may be able to piece together enough of it to hear alarm bells."
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