(The following post is part of our Taking Back Labor Day blog series. Many people view Labor Day as just another day off from work, the end of summer, or a fine day for a barbecue. We think that it’s a holiday with a rich history, and an excellent occasion to examine what workers, and workers rights activism, means to this country. Our Taking Back Labor Day posts in September will do that, from a variety of perspectives, and we hope you’ll tune in and join the discussion!)

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Pfizer to Pay $2.3 Billion for Fraudulent Marketing 

According to a statement from the Justice Department,   Pfizer’s illegal practices in connection with its promotion of an anti-inflammatory drug called  Bextra is what got it into big trouble.

Under the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses.

It turns out that Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve because of its safety concerns.

As a result of that conduct, (as well as violations involving other drugs) the company will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter.

Pharmacia & Upjohn (Pfizer subsidiaries) will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

All in all, Pfizer settled the case( which included civil and criminal penalties) for a whopping $2.3 billion dollars.

False Claims Act Liability

Pfizer also agreed to pay $1 billion to resolve allegations under the civil False Claims Act (also know as Qui Tam).

Under the Act, it is illegal to knowingly present a false or fraudulent claim for payment to the federal government or use a false or fraudulent record to get paid. The way it works is:

• individuals and entities with evidence of fraud involving the United States or its programs or contracts can sue the wrongdoer on behalf of the government

• the government has the right to intervene and join the action

• if the government declines, the private plaintiff may proceed on his or her own behalf

Those who violate the Act are liable for three times the dollar amount of the fraud and additional civil penalties. As far as the whistleblower goes, the Whistelblowers Protection Blog explains it this way:

A qui tam plaintiff can receive between 15 and 30 percent of the total recovery from the defendant, whether through a favorable judgment or settlement. To be eligible to recover money under the Act, you must file a qui tam lawsuit. Merely informing the government about the violation is not enough. You only receive an award if, and after, the government recovers money from the defendant as a result of your suit.

 In this case, Kopchinski (and others) claimed that Pfizer:

• illegally promoted four drugs  (Bextra an anti-inflammatory; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug),

• for uses that were not medically accepted, and

• caused false claims to be submitted to government health care programs.

As a part of the resolution of the case,  six whistleblowers will receive payments totaling more than $102 million from the federal share of the civil recovery.

Kopchinski, whose reporting instigated the government investigation, will get $51.5 million.

Great Result For This Whistleblower

It’s a fantastic result for Kopchinski and the end of a long road. Most whistleblowers go through an enormous ordeal and so did Kopchinski,

First they struggle with the difficulty of reporting the illegal and/or dangerous practices to the corporate hierarchy and the pressure that goes with it.

What happens next —  when they are ignored as they often are — is that they are labeled as troublemakers and then fired because of trumped up charges of misconduct.

Once they report the wrongdoing to a government agency, they are blackballed in their industry and can’t get work. The stress, anxiety, guilt, and financial distress is overwhelming for most.

Kopchinski had this to say in a statement he released:

In the Army I was expected to protect people at all costs, 

At Pfizer I was expected to increase profits at all costs, even when sales meant endangering lives. 

I couldn’t do that.

That’s why Kopchinski got fired. At the time (2003) he had a baby and his wife was pregnant with twins. He went from earning $125,000 a year, to depleting his 401(k), to finally getting a $40,000 a year insurance job.

We appreciate Mr. Kopchinski’s courage and conviction and congratulate him (as well as his legal team and the Justice Department ) for a superb result.

It doesn’t often turn out this way — and it’s sure great to see it when it does. It’s a wonderful Labor Day story.

Image: images.huffingtonpost.com

About the Author: Ellen Simon is recognized as one of the foremost employment and civil rights lawyers in the United States. She has been listed in the National Law Journal as one of the nation’s leading litigators. Ms. Simon has been quoted often in local and national news media and is a regular guest on television and radio, including appearances on Court TV. Ellen has been listed as one of The Best Lawyers in America for her landmark work representing individuals in precedent-setting cases. She also received regional and national attention for winning a record $30.7 million verdict in an age-discrimination case; the largest of its kind in U.S. history. Ellen has served as an adjunct professor of employment law and is an experienced and popular orator. Ellen is Past-Chair of the Employment Rights Section of the Association of Trial Lawyers of America and is honored to be a fellow of the International Society of Barristers and American Board of Trial Advocates. In additional to work as a legal analyst, she currently acts as co-counsel on individual employment cases, is available as an expert witness on employment matters and offers consulting services on sound employment practices, discrimination awareness and prevention, complaint investigation and resolution, and litigation management. Ms. Simon is the owner of the Simon Law Firm, L.P.A., and Of Counsel to McCarthy, Lebit, Crystal & Liffman, a Cleveland, Ohio based law firm. She is also the author of the legal blog, the Employee Rights Post, and her website is www.ellensimon.net. Ellen has two children and lives with her husband in Sedona, Arizona.