The False Claims Act could be a better fraud-fighting tool if the government took steps to make investigations faster and less stressful for the whistle-blowers who initiate most of the cases, according to a study to be published in the New England Journal of Medicine.
Study examines strain faced by whistle-blowers
The authors interviewed 26 whistle-blowers involved in successful False Claims Act cases against pharmaceutical companies. Most, 22, were employees of the targeted companies, and nine worked in the executive or management ranks.Click here to read more about whistle-blowers.
The “triggering event” for most of the insiders was a career change—either starting work at a new company or beginning a new position. Some also said they became aware of the illegal conduct after a change in business environment, such as new competition or new management following a merger.
After attorneys' fees and taxes, the rewards ranged from $100,000 to $42 million, with half ranging from $1 million to $5 million. A majority said the reward was small compared to the time and disruption to their lives and damage to their careers.
The cases on average took five years to resolve, ranging from one to nine. Six reported divorces or other family conflicts during those years, and 13 said they suffered stress-related ailments, such as shingles and panic attacks.
They described the workload and pressure as intense. One recalled FBI agents visiting his workplace and telling co-workers the agents were “computer people.” Another described getting wired by agents at a highway rest stop before rushing to a company meeting. Several complained about lack of communication from the government about the status of the investigation.
“The prevailing sentiment was that the payoff had not been worth the personal cost,” write the authors, Aaron Kesselheim, a physician at Brigham Women's Hospital and instructor at Harvard Medical School; Michelle Mello, a professor at the Harvard School of Public Health; and David Studdert, a professor of law and public health at the University of Melbourne, Australia.
The authors conclude that the strain on professional and personal lives might “make prospective whistle-blowers with legitimate evidence of fraud reluctant to come forward.” They suggest the government devote more resources to investigations to make them faster and provide temporary financial or medical benefits if whistle-blowers lose their jobs during litigation.
They also recommend strengthening penalties against employers who retaliate against whistle-blowers. False Claims Act lawsuits are filed under seal, but most whistle-blowers, the researchers found, try to resolve their concerns internally before turning to lawyers, leaving a trail of complaints that expose them as likely informants when a government investigation begins.
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