started the ball rolling…

Posted on Friday 28 September 2012

The American Civil War  was marked by fraud on all levels, both in the Union north and the Confederate south. During the war, unscrupulous contractors sold the Union Army decrepit horses and mules in ill health, faulty rifles and ammunition, and rancid rations and provisions, among other unscrupulous actions. In response, Congress passed the False Claims Act on March 2, 1863. Because it was passed under the administration of President Abraham Lincoln, the False Claims Act is often referred to as the "Lincoln Law." Importantly, a reward was offered in what is called the "qui tam" provision, which permits citizens to sue on behalf of the government and be paid a percentage of the recovery. Qui tam is an abbreviated form of the Latin legal phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur ["he who brings a case on behalf of our lord the King, as well as for himself"] In a qui tam action, the citizen filing suit is called a "relator". As an exception to the general legal rule of standing, courts have held that qui tam relators are "partially assigned" a portion of the government’s legal injury, thereby allowing relators to proceed with their suits.

The last posting was about our governments’ beginning to retrieve funds paid to pharmaceutical companies much of it under the Lincoln Law. We know it as FCA [the False Claims Act] or the "Whistle Blower" Law [see a sad tale…]. Unlike the Federal Government, not all States have strong "Qui Tam" provisions in their legal system:
The whistleblower provisions of the FCA constitute the most important factor spurring the recent wave of federal settlements, as the pharmaceutical industry continues to be the largest defrauder of the federal government under the FCA. Enacted in 1863 during the Civil War to combat defense contractor fraud, the FCA has been amended numerous times over the past 26 years, in part to increase financial rewards for private whistleblowers who reveal fraudulent activities by government contractors.34 Almost half of the qui tam settlements during the current study period were made possible by a single whistleblower: the Ven-A-Care pharmacy, which has been called “…the most successful — and least well-known — whistleblower operation of all time.” Housed in a nondescript building on a side street in Key West, Florida, Ven-A-Care has been responsible for recovering at least $1.3 billion for the federal government from the pharmaceutical industry since 2001. Partly due to the absence of strong FCA qui tam provisions in 38 states [22 of which have no qui tam provisions at all], 37 states have apparently not taken similar advantage of whistleblower revelations to enforce pharmaceutical fraud. In this study, the existence of neither an FCA nor a DRA-compliant FCA seemed to predict states’ level of enforcement of pharmaceutical fraud, at least as measured by the number of settlements. Texas is one prominent exception that has leveraged its DRA-compliant FCA to recover money through whistleblower-initiated investigations. The state’s law awards whistleblowers 15-25% of the financial penalties of a settlement. Texas has successfully invoked these provisions more than any other state, recovering at least $354 million through qui tam settlements and demonstrating the potential of a strong FCA to combat fraud if fully utilized.
On September 19, 2012, the Taxpayers Against Fraud gave the Whistleblower of the Year Award to Allen Jones for his suit against J&J/Janssen. Here’s what they had to say:
Taxpayers Against Fraud Education Fund is pleased to announce Allen Jones as our Whistleblower of the Year award winner for 2012. A graduate of Penn State University, with a Bachelor’s Degree in health physical education and therapy, Mr. Jones worked for the Pennsylvania Office of the Inspector General on two separate occasions. His first stint at the Office of the Inspector General lasted five years. He liked the work and was promoted several times, but the travel was too much with two adolescent teenage daughters to raise. Reluctantly, Mr. Jones left the OIG to work rehabilitating and selling houses – a job he did for the next 11 years.

In 2002, with his daughters grown, Allen Jones returned to the Office of the Inspector General, and was assigned to investigate the State’s chief pharmacist, Steve Fiorello, who was reported to be managing an unregistered bank account into which drug companies were depositing checks. Allen Jones investigated and discovered that Mr. Fiorello was indeed getting checks from Johnson & Johnson and Janssen Pharmaceutical, the maker of the atypical anti-psychotic drug Risperdal. Ostensibly, the money was to pay for travel and speaking honoraria. There was only one problem: Pennsylvania state employees are not allowed to charge or keep honoraria. Upon further investigation, Mr. Jones discovered that money flowing into the unregistered Fiorello account was also flowing out to the Director of the Texas Department of Mental Health and Mental Retardation.

What was going on? Simple enough: Johnson & Johnson and its Janssen subsidiary were paying for state officials to fly all over the country order to promote the “Texas Medication Algorithm Project” or TMAP. TMAP appeared to be little more than an off-label marketing program funded by drug companies which used flattery, cushy travel, expensive restaurants, and pocketed honoraria to get key state officials to green light switching massive numbers of patients from low-cost mental health drugs to new “atypical” antipsychotics, such as Risperdal, that cost ten times as much.

When Allen Jones took his findings to his boss, he was told to walk away from the investigation. He was told that investigating pharmaceutical company payola was “too political.” When Allen Jones did not walk away, he was taken off the case as lead investigator. By now Allen Jones had learned that one of the side effects of Risperdal was that it often made people gain 50, 100, 150, and even 250 pounds. The potential result of such weight-gain is predictable: diabetes, strokes, and heart attacks. Then, in January 2003, Allen Jones learned that TMAP was going to be implemented in one fell swoop in Pennsylvania. The new PennMAP program would switch Pennsylvania patients to the new atypical antipsychotics, regardless of their medical needs or background, and at a cost that was more than 10 times higher than the older and safer medications. After filing a First Amendment civil rights lawsuit to try to preserve his job, and the bribery and kickback records, he went to The New York Times. After that, Mr. Jones was fired.

Allen Jones then filed a retaliation lawsuit against Pennsylvania’s Medicaid OIG and, with two boxes of documents, went to Texas where he met with Charles Siegel of the Waters & Kraus firm, who then connected him with Tom Melsheimer and Tommy Jacks at the law firm of Fish & Richardson Together they filed a state False Claims Act case, which was joined by the Texas Attorney General’s office in 2006. The complaint alleged public corruption and a widespread campaign of bribery and off-label marketing of the drug Risperdal. Mr. Jones eventually settled his wrongful discharge case with the State of Pennsylvania, but after paying his bills, putting new tires on his truck, and filling his propane tanks for the winter, he had only $1,200 left.

In 2008, Steven Fiorello, the chief pharmacist for Pennsylvania who Mr. Jones began investigating in 2002, was convicted of felony conflict-of-interest charges for taking payments from drug companies, including Janssen and Pfizer Inc. He was sentenced to 18 months of probation, fined a total of $30,000, and cited by the Pennsylvania Ethics Commission. Even as Allen Jones was blowing the whistle on TMAP, other whistleblowers were coming forward to allege other off-label Risperdal marketing schemes crafted by Janssen and Johnson & Johnson.

In January 2010, the U.S. Department of Justice joined two False Claims Act cases against Johnson & Johnson and Janssen, alleging the companies paid millions of dollars in kickbacks to Omnicare in order to get that company to operate as an extension of their sales forces in dispensing Risperdal to nursing home patients. In September 2010, Johnson & Johnson and Janssen took a Risperdal case to trial in Louisiana. The jury came back with a $257 million judgment. In December 2011, a South Carolina judge upheld a $327 million jury verdict in that state against Johnson & Johnson and Janssen for off-label marketing of Risperdal. At about this same time it was reported in the press that the Eastern District of Pennsylvania was preparing a global federal Risperdal settlement that weighed in at approximately $1 billion.

That same month, Allen Jones’ cases went to trial in Texas, and the testimony and emails that came out in that first week in court told a devastating story. Johnson & Johnson and Janssen pulled the plug and settled for $158 million. A settlement, of course, is different than a verdict, as it represents the bend point where a company will fold rather than litigate. Since Texas represents 8 percent of the U.S. population, a $158 million settlement in that state raised the specter of a $1.8 billion national settlement. Bill Weldon, the CEO of Johnson & Johnson decided to step down from his position in January 2012, and the board of Johnson & Johnson appointed Alex Gorsky, the former Vice President for Sales at Janssen, as the new Chief Executive Officer of Johnson & Johnson.

The next month, another state Risperdal case went to trial in Arkansas, and the staggering jury verdict there was for $1.1 billion in a state with less than one percent of the U.S. population. Johnson & Johnson was very clearly in trouble. DOJ swung into action and demanded that Alex Gorsky appear for a deposition. What did he know, and when did he know it as it related to alleged kickback schemes and off-label marketing of Risperdal? The press, which had once reported that a global settlement was penciled in at $1 billion, was now reporting a potential settlement topping $2.2 billion. Clearly, there is a lot of credit to go around on this matter. Applause is owed to the private lawyers who brought this case and the other Risperdal cases around the country. Without the hard work of the Texas, South Carolina, Louisiana, and Arkansas Attorney General’s offices their respective cases would not have gone to trial and been won in such a decisive and spectacular fashion. And, of course, the U.S. Department of Justice is now in the process of leveraging a very large federal settlement that covers most of the states.

When push comes to shove, however, the person who started the ball rolling was Allen Jones, who stood up and spoke up even when he faced loss of his livelihood. For that bravery and tenacity, the TAF Education Fund is pleased to honor Allen Jones as our Whistleblower of the Year.

When the definitive history of this era of corporate and academic fraud in the field of psychiatry finally gets written, there are going to be a number of heros coming from diverse directions – people who went beyond thinking something like "that can’t be right," and followed things through to the bottom. Allen is going to occupy a big chapter in that story. "Started the ball rolling" is always the hardest part…
    September 29, 2012 | 1:30 AM

    Risperdal reproached!All the manufacturer’s of the SGA (Second generation Antipsychotics) engaged in deceptive promotions and off label marketing
    Now that I know what signs to look for.I can always tell when the drug company rep strolls in to the waiting room of the doctor’s office.
    They carry a large sample case of ‘treats’ and get buzzed right in.
    Big pharma institutions like Johnson and Johnson and Eli Lilly have ‘sown the wind’ and are now ‘reaping the whirlwind’ of bad consequences for their pushy off-label promotions.
    –Daniel Haszard (got diabetes from Eli Lilly’s ‘viva’ Zyprexa) FMI

    Sandra Steingard
    September 29, 2012 | 12:02 PM

    What still concerns me is the long lasting conflation of science and marketing for many doctors.

    October 1, 2012 | 9:05 PM

    Often, it seems, in the affairs of H. sapiens, it is men and women of conscience and tenacity who make outsized contributions to the very continuation of the species.

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