Grassley Investigates Drugmakers' Whistleblower Policies

Jul 07, 2010

Last week, Senator Charles Grassley (R-IA) sent letters to 16 drugmakers, including Pfizer (New York), AstraZeneca (London), and Eli Lilly (Indianapolis), asking them about their current policies regarding whistleblowers—employees who file complaints under the False Claims Act (FCA). The letters include questions about how the companies inform employees about the FCA, how the companies handle FCA complaints, how the companies ensure that whistleblowers are treated fairly, how claims are resolved, and whether the companies have changed their policies in light of the passage of the Fraud Enforcement and Recovery Act (FERA) of 2009.

“In the last three years, pharmaceutical companies have paid out over $3 billion in settlements under the False Claims Act for defrauding federal healthcare programs,” said Grassley in a press release. “There can never be too many taxpayer watchdogs, so I see this letter as an opportunity to foster a mindset that recognizes the value of whistleblowers and the duty these companies have to act honestly when seeking taxpayer dollars.”

After a Senate Committee on Finance hearing in June 2005 revealed that some corporations were structured to avoid accountability when employees raised concerns to the highest levels of the company, Grassley sent letters to 18 drugmakers, asking them how they were informing their employees of the whistleblower provisions of the FCA. Grassley received responses, and his new letters seek updated information about the companies’ programs.

The FCA, first sought by President Lincoln, allows private citizens to file suits on behalf of the government in cases of alleged fraud, including healthcare fraud. If the defendants are found guilty, FCA provides that the citizens and the US government share in any monetary recovery. Since the law was amended in 1986, the law has recovered more than $22 billion that would otherwise have been lost, according to the US Department of Justice (DOJ). As a result of successful FCA lawsuits, whistleblowers were paid $2.39 billion from 1987 to 2009, according to DOJ.

The FERA revised the liability aspects of the FCA and extended antiretaliation protections to agents and contractors of employers that may be defendants under the FCA. Grassley was a lead sponsor of the legislation, which was signed into law on May 20, 2009.

Since January 2009, AstraZeneca has paid $520 million, Pfizer has paid $1 billion, and Eli Lily has paid $1.4 billion to settle FCA claims.

Grassley’s letters are available here.