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Health-care whistleblowers

They're cashing in millions in qui tam recoveries in league with the semi-autonomous Health Care Fraud Unit, which operates within the U.S. Attorney's office for Massachusetts. According to renowned Boston attorney Harvey Silverglate, however, the success in white-collar enforcement is based in part on "in terrorem misuse of some of the nation's broadest -- and vaguest -- criminal statutes and regulations". It hasn't always met with success:

Last July, the U.S. Attorneys lost a prosecution in Boston when 10 employees of TAP Pharmaceuticals refused to plead guilty and instead went to trial contesting the unit's claim that their discounted sales and promotional practices--common in the industry--constituted illegal kick-backs and bribes.

The employees' case initially seemed doomed: The company itself had pled guilty and agreed to pay a then-record $885 million. TAP agreed to cooperate with prosecutors, waived its attorney-client privilege, and provided prosecutors with statements made by employees to company lawyers during an internal investigation.

Topping that, both the government's star witnesses, a former TAP employee and a physician in a managed-care practice that bought TAP drugs, had received "whistle-blower" bonanzas of $77 million and $17 million (the latter split with the HMO), respectively. The former TAP employee banked $47.5 million more for whistle-blowing in a related federal prosecution of drug maker AstraZeneca.

A jury wasn't impressed and acquitted the defendants.

P.S. More from the American Spectator.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.