WEDNESDAY, May 12, 2010 (HealthDay News) -- Ordinary citizens who "blow the whistle" on drug companies for ripping off Medicare and Medicaid are motivated by ethics more so than the financial rewards they reap, yet the personal toll they endure can be substantial and long-lasting, a new study finds.
For 82 percent of these "insiders" -- pharmaceutical manufacturer employees who become whistleblowers -- filing a health fraud complaint led to unwanted pressures from their employer, including being fired, intimidated or blackballed.
"A lot of them express a very strong ethical compass that they think guides them but, boy, they really do suffer a lot for the public good that they perform," said lead author Dr. Aaron S. Kesselheim, an instructor in medicine at Harvard Medical School and an associate physician in the division of pharmacoepidemiology and pharmacoeconomics at Brigham and Women's Hospital in Boston.
The study, described in a special report published in the May 13 issue of the New England Journal of Medicine, provides what may be the first solid data on the experiences of those who participate in litigation under the federal False Claims Act.
"This has been described by anecdote, but I have not seen it quantified in this way before," said Marcia Boumil, associate professor of public health and community medicine at Tufts University School of Medicine in Boston, whose recent paper in the Journal of Public Health Policy examined whistleblowing in the United States, England, Canada and Australia.
The study also has important implications for the anti-fraud efforts of the U.S. Justice Department, which currently has a backlog of more than 1,000 "qui tam" (whistleblower) cases, according to the report.
In addition to providing sufficient financial incentives to encourage whistleblowers, policymakers should focus on "nurturing this kind of ethical sense in workers, to encourage people to come forward when they see bad practices," Kesselheim said. He and his co-authors suggest more equitable rewards for insiders, better protections against retaliation and more resources for the Justice Department to fight these crimes.
Among U.S. health fraud investigations, 90 percent are qui tam actions, in which citizens with direct knowledge of the alleged fraud initiate litigation on behalf of the government. These individuals serve as informants and, in return, receive 15 percent to 25 percent of funds recovered by the government.
From 1996 through 2005, these actions led to the recovery of more than $9 billion.
In interviews with 26 informants in 17 cases against pharmaceutical manufacturers, Kesselheim and colleagues discovered that the event that triggered the litigation was typically related to a career change or promotion. Moving up in the organization meant that these insiders became privy to inappropriate behavior in the company.
Typical cases included over-inflated drug pricing, kickbacks to "high-prescribing" doctors, suppression of data on dangerous drug side effects, and off-label marketing of drugs to children and nursing home patients.
Most insiders (18 of 22) first tried to fix the perceived fraudulent behavior by talking to superiors, filing an internal complaint or both, but their complaints were ignored, dismissed as unfounded or met with demands to do as they were told. Ultimately, many fell into the qui tam process after seeking out lawyers for other reasons, such as unfair employment practices.
"Internal whistleblowers are often caught in the middle," Boumil said. "For example, a pharmaceutical sales rep is asked to do something illegal. If he does so, he is breaking the law. If he doesn't do it, he risks his position at the company," she said.
Many whistleblowers cited ethical reasons for pursuing their complaints. They were motivated by the need to seek justice, to do the right thing or to act on behalf of public safety, for example. "It was just something that I knew was wrong," one whistleblower told the researchers. "I needed to correct it."
However, despite rewards ranging from $100,000 to $42 million, the "prevailing sentiment was that the payoff had not been worth the personal cost," the authors noted.
The paper describes lives that were upended for the insiders whose involvement included wearing personal recording devices, taping phone conversations and copying requested documents or files. A "typical day," according to one informant, might begin by "meeting an FBI agent in a parkway rest stop" to get "wired" before running off to a meeting.
Along with the stress of participating in a protracted investigation (the average case lasted almost five years), whistleblowers reported financial difficulties, personal hardships and stress-related health problems.
With billions in potential savings from fighting health-care fraud, the qui tam process represents a significant tool in the federal government fraud-fighting arsenal -- one that taxpayers should be interested in preserving, Kesselheim noted. But if the whistleblowing mechanism is not working well, "then we're not getting the benefit from it," he said.
For more on the False Claims Act and whistleblower process, visit the Taxpayers Against Fraud Education Fund.