Pharmaceutical

Any industry needs regulation in order to ensure that its business practices are fair and ethical, and the pharmaceutical industry is no exception. At times, pharmaceutical companies may perpetrate actions, such as providing misleading data or marketing drugs for unapproved diseases, that places the public at risk. In these cases, a person with knowledge of these practices may choose to file a legal action against the offending company. In common lingo, the act of filing suit against a corporation or federal contractor that commits fraud against the public or government is known as "whistleblowing."

A federal law, known as the False Claims Law, permits individuals to file whistleblower suits, and the plaintiff in this suit may be able to receive a "whistleblower reward," which generally amounts to 15 to 25 percent of the awarded damages in the case. Lawsuits filed under the False Claims Law are known sometimes as qui tam lawsuits, from a Latin phrase stating "qui tam pro domino rege quam pro se ipso in hac parte sequitur," which translates to "he who sues for the king and for himself." This phrase denotes the fact that the plaintiff is suing on behalf of both the government, as well as himself or herself.

Qui tam rewards have resulted from fraud claims against a variety of companies, but proportionately, the largest amount of rewards have come from actions against pharmaceutical firms. Pharmaceutical fraud comes in many forms, such as:

• Charging the government for drugs that have not been used.
• Off-label marketing and promoting of drugs. This refers to encouraging the prescribing of drugs to treat disorders when these claims have not been approved of by the FDA.
• Giving physicians financial or non-financial benefits (such as expense-paid trips to "seminars" at resort locations) to promote the prescribing of certain drugs.

In one well-known 2002 case, the pharmaceutical giant Pfizer was held to be at fault for marketing its drug Neurontin for off-label use. A former employee, David Franklin, sued Pfizer under the False Claims Act, accusing them of engaging in illegal marketing practices. According to Franklin, Pfizer actively instructed their employees to use illegal tactics in order to convince doctors to prescribe Neurontin for a variety of disorders that the FDA had not expressly approved it to treat. Franklin had refused to resort to these means to market the drug, and Pfizer executives had subsequently threatened him, causing Franklin to resign. Pfizer plead guilty to the allegation that they had knowingly promoted Neurontin for the treatment of at least eleven different medical conditions that it had not been approved to treat. The settlement damages paid by Pfizer amounted to $430 million, of which Franklin was paid $26.6 million for emotional and physical damages incurred by his whistleblowing actions.

The Pfizer case may be the best-remembered pharmaceutical whistleblower case, but off-label marketing cases alone generated over $6 billion in rewards in the U.S. between 2003 and 2008, showing that pharmaceutical whistleblower suits are a recurring phenomenon.