Covid-19 has exposed a critical need for whistleblowers in the pharmaceutical industry. In March 2020, the United States Food and Drug Administration (FDA) suspended all routine inspections of domestic and foreign drug manufacturing plants. With inspections halted, pharma whistleblowers are needed to fill the oversight void.
In normal times, foreign inspections have been a challenging task for the FDA. Accomplishing inspections overseas is difficult because such inspections often must be preannounced, which gives drug manufacturers time to hide problems. Additionally, operating in a foreign country comes with barriers of access, language problems, and a shortage of qualified personnel. While FDA is doing what it can, the U.S. Government Accountability Office has long-standing concerns about FDA’s ability to oversee the global supply chain.
That is very troubling given that an estimated 40% of finished drugs and 80% of active drug ingredients consumed in the United States are manufactured abroad. Most drug manufacturing occurs in China and India, where quality and data integrity violations have been all too common.
There were problems before, but Covid-19 changed everything. There is now a massive backlog of plants needing to be inspected. To put things in perspective, in fiscal year 2019, FDA conducted almost 500 inspections in China and India. From March to September in 2018 and 2019, FDA conducted more than 600 foreign inspections in total. From March to October 2020, FDA conducted just three “mission critical” foreign inspections.
This absence of FDA oversight greatly increases the risk of fraud. The old adage “when the cat is away, the mice will play” aptly describes the massive regulatory void that presently exists. In this environment, we need whistleblowers now. We need insiders at the drug companies to come forward and report problems. We can’t rely on drug companies to police themselves. There were quality issues in drug manufacturing before Covid, and in this time of crisis, we can expect some opportunistic manufacturers to cut corners.
Fortunately, the False Claims Act provides a trusted solution. The False Claims Act has been utilized with great success to fight pharmaceutical fraud. In 2010, GSK paid $750 million to resolve criminal and civil liability for manufacturing deficiencies at its Puerto Rico plant. In 2013, India’s largest drug manufacturer, Ranbaxy, paid $500 million to resolve False Claims Act allegations. In 2015, Qualitest Pharmaceuticals paid $39 million in a civil fraud settlement. In 2017, Baxter Healthcare Corporation paid more than $18 million to resolve criminal and civil liability for its sterile products. These are just a few examples.
If a company fails to follow current Good Manufacturing Practices (cGMPs), the drugs they produce may not meet their specified strength, purity, dosage, or other properties. When that happens, the government is not getting what it paid for. The government expects when it buys a certain drug, through various healthcare programs, such as Medicare, Medicaid, or TRICARE, that the drug is what it purports to be. If cGMPs are not followed, however, what is actually produced is an unknown and unapproved drug. That is fraud.
If you are aware of pharmaceutical fraud, your first step should be to speak with a lawyer. Importantly, since so much drug manufacturing occurs abroad, even foreign citizens can be entitled to a monetary award for their knowledge of fraud. That award is a portion of what the government recovers—which can be substantial.
The attorneys at Helmer Martins Rice & Popham have litigated some of the toughest and most complex cases in the country. We have prosecuted False Claims Act cases on behalf of whistleblowers longer than any law firm in America. If you are a potential whistleblower, please contact us.
