Pfizer whistleblowers set to collect $59M in Medicaid fraud suit

William LaCorte

How much does it pay to sue Big Pharma? In the case of one serial whistleblower, $59 million. Louisiana doctor William LaCorte is set to collect a boatload of cash after filing a whistleblower suit against Pfizer ($PFE) over its heartburn med Protonix, which recently resulted in a $784 million settlement.

The windfall from the latest fraud suit brings LaCorte's total payout from fraud settlements to almost $100 million, The Financial Times reports. LaCorte will share the rewards with a former AstraZeneca ($AZN) sales rep, Lauren Kieff, who also filed a whistleblower suit against Pfizer. The company said this week that it would shell out $784 million to settle claims that its Wyeth unit overcharged Medicaid for Protonix.

This is not LaCorte's first big payout. The doc previously took home $38 million from filing similar suits against pharma companies, including one that involved Merck ($MRK) and its heartburn drug Pepcid. In 2008, LaCorte snagged a portion of a $250 million settlement with the company after accusing Merck of offering hospitals a better deal than Medicaid to prescribe Pepcid.

"I have respect for pharma companies that do things in the right way but not for those that have fourth rate drugs that haven't been properly tested which they pay doctors to prescribe," LaCorte told the FT.

But LaCorte also embodies some of the controversy surrounding whistleblower suits. LaCorte has filed 12 suits over the past two decades, but not all of them have been successful, the FT points out. Some critics say that the False Claims Act, which encourages whistleblowers to step forward with allegations, encourages people to file dead-end suits that waste time and money.

"Serial whistleblowers are a rare thing. Most cases involve one-time whistleblowers working inside an industry who are unlikely to have an opportunity to be a whistleblower again," University of Toledo law professor Geoffrey Rapp told the FT.

Still, the U.S. Department of Justice (DOJ) has made out well with the help of whistleblowers. In 2015, the DOJ recovered $2.8 billion from 638 whistleblower suits filed under the False Claims Act, with whistleblowers taking home $597 million.

Plus, whistleblowers often do not collect a big payout, the FT points out. Even though whistleblowers can technically get up to 30% of settlements, a more traditional windfall is 15%, LaCorte said. "The numbers sound good but once you've paid your lawyers and the taxman they're not quite as big," LaCorte said, adding that exposing fraud is his primary motivator for suing.

LaCorte is not the only whistleblower taking home big money. In 2015, former Endo ($ENDP) sales rep Peggy Ryan got $33.6 million after the company settled a suit with the DOJ over off-label marketing claims for its pain patch Lidoderm. Ryan's cut of the settlement was 24% of the government's $140 million share.

- read the FT story

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