Whistleblower Lawsuit Costs GlaxoSmithKline $750 Million

The Department of Justice (DOJ) has released its False Claims Act statistics for fiscal year 2010. According to this press release, the DOJ recovered $3 billion this year in False Claims Act recoveries, 83 percent, or $2.5 billion, of which involved health care fraud. The Obama Administration has made no secret of its focus on health care fraud, and health care companies have been in the news recently for getting caught up in false claims liability.

While the government made out pretty well this year, whistleblowers didn’t do too badly either, recovering $385 million. And one relator in particular has been in the news for her whistleblowing against one of the largest drug manufacturing companies in the world, GlaxoSmithKline, for one of the scariest health care frauds ever perpetrated. 

In October 2010, GlaxoSmithKline and one of its subsidiaries paid $750 million to settle False Claims Act liability stemming from the manufacturing of adulterated drugs at a plant in Puerto Rico. Read about the details here.

The relator in that case, Cheryl Eckard, was recently interviewed on CBS’s 60 Minutes. In her interview, Eckard talks about what she saw when she visited the plant: tainted water, unsanitary conditions, and, most egregiously, the mixing of different medicines. After the visit, Eckard took her findings to the vice president for quality and asked that he shut down the plant. He didn’t. After eight months of reporting problems at the plant, Eckard lost her job, and she turned over the information she had to the Food and Drug Administration and got a lawyer who brought a False Claims Act lawsuit. Eckard was awarded $96 million. Read about Eckard’s interview here.

Because of Eckard and whistleblowers like her, companies know that they have to take patient safety seriously, a benefit for everyone. Otherwise, they can end up with a catastrophic loss, myriad bad press, and loss of consumer trust—like GlaxoSmithKline.

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