FDA Fuck Ups: Shire Pays $56 Million in Whistleblower Case: No Admission of Wrongdoing
September 26, 2014
Shire Pharmaceuticals LLC will pay $56.5 million to resolve allegations that it violated the False Claims Act as a result of its marketing and promotion of several drugs, federal prosecutors in Philadelphia said Wednesday. Philadelphia Business Journal
That’s like Shire stealing $56 million from the bank and the DOJ deciding they only had to give back what they stole. When have you ever heard of a bank robber just giving back what they stole without penalty or deterring factors in place? Then why is the DOJ allowing this to happen? Shire was forced to sign a Corporate Integrity Agreement (not worth the paper they’re written on in almost every circumstance).
Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania should not only be accountable to “the people” he should step down from his position as he clearly did not help “the people,” in this deal but did help Shire to continue with business as usual at “the people’s” expense.
Interesting there are no civil (how the whistleblowers gets paid) or criminal damages as part of the settlement which appears that the DOJ gets to keep all $56 million; and, we “the people” have no say or knowledge of where that money actually goes.
The allegations resolved by the settlement arose from a lawsuit filed by Gerardo Torres, a former Shire executive, and a separate lawsuit filed by Anita Hsieh, Kara Harris, and Ian Clark, former Shire sales representatives. The lawsuits were filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery. The relator share payment will be $5.9 million.
There is a very common misunderstanding when it comes to calculation of whistleblower share; and, that’s by design from the DOJ and the companies to make the whistleblowers appear greedy when in fact the opposite is true. The lack of transparency from the governement is unacceptable.
Prosecutors said the settlement money will be split between the federal government ($35,713,965) and state Medicaid programs ($20,786,034).
According to the article none of the $56 million recovered was attributed to a civil portion or criminal portion of the case-meaning the whistleblowers would get nothing. And if the DOJ did decide to award the whistleblowers money they would first determine of that $56 million how much was Medicare/Medicaid (usually around 10%) and then they would split (not evenly) $5.6 million. Then take into account the tax rate (at the highest level) and then attorney’s fees at roughly 45%. That would leave each whistleblower less than $500,000 to end their career for coming forward and helping the FDA/DOJ do their job properly.
But it looks like they’ll all be splitting money from the $20,786,034 which is $2.0 million so cut that $500,000 in half and they’ll be left with $250,000 (probably less than one year’s salary). Who looks criminal now? Zane David Memeger, U.S. Attorney for starters.
For more stories on the realistic breakdown of whistleblower payments: