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G&G
client awarded $34 million in whistleblower case
Marketing Executive Uncovered Fraud at Bayer Corporation; Attorney Getnick Calls Him 'Courageous, Ethical, An Inspiration'
Getnick & Getnick negotiated the award with the Department of Justice on behalf of the executive, who alerted the law firm about fraudulent marketing practices at his employer, Bayer Corporation. The client became aware that Bayer had cheated the government out of rebates to which it was entitled. He tried to have Bayer address his concerns internally, but they were unresponsive. "He is amongst the new heroes of corporate America," Neil V. Getnick, managing partner of the law firm, said of his client, who started his career as a store pharmacist and rose through the ranks at Bayer to become a senior marketing executive. "He did the courageous, ethical thing and is an inspiration to any corporate employee - from the mailroom to the boardroom - who is aware of corporate wrongdoing and takes steps to stop it." Bayer agreed to pay $257 million to the federal and state governments to settle civil and criminal charges that it defrauded Medicaid. The civil settlement brings to nearly $400 million the total that Getnick & Getnick has helped the government recover in whistleblower cases. Medicaid rules require that pharmaceutical companies give Medicaid the same discounts they give their best commercial customers. Getnick's client reported that to skirt these requirements and avoid paying Medicaid the 40 percent rebates it was giving its largest customers on the antibiotic Cipro and the anti-hypertension drug Adalat CC, Bayer engaged in what is known as private labeling, a complicated pricing scheme. By making nominal changes to the labels on the bottles of pills sold to the commercial customers, Bayer made it appear that they were the customers' own private label drugs. The government alleged that by not including the private labeling deals in its price reports to the government, Bayer fraudulently created the illusion that its rebate obligation to Medicaid was only 15 percent. Over time, the difference in the rebates that Bayer owed and the rebates it paid grew to more than $100 million. Getnick & Getnick's partners are former fraud prosecutors. Representing whistleblowers is one of the four areas of Getnick & Getnick's business integrity and anti-fraud litigation practice. "Our law practice typically involves coordination with state and federal prosecutors in parallel investigations," Getnick said. "In the Bayer case, we formed a partnership with the government that put the ill-gotten gains back where they belong, in our state and federal treasuries. It was a privilege to work both with our client and with the dedicated attorneys from the Justice Department." Lesley Ann Skillen, a Getnick & Getnick partner who coordinates the firm's qui tam practice, said that the qui tam law - known as the False Claims Act - is precisely for cases like this. "He was a true insider," Skillen said of the firm's client. "He showed that Bayer's corporate culture elevated short-term gain over ethics and the law. He was crucial to proving the government's case that the company defrauded the treasury." The False Claims Act is a Lincoln-era law that allows private citizens with knowledge of fraud on the government to sue and share in the proceeds of any recovery. The law was enacted to combat widespread procurement fraud in the Civil War, but it fell into disuse in the 1940s. Amendments passed in 1986 made the False Claims Act the government's chief weapon in the war on fraud, and the Justice Department used it in its investigations of clinical laboratories in the mid-Nineties, resulting in more than $1 billion being returned to the treasury. "The message for corporate America is that by championing integrity and transparency, corporations can improve their bottom line, maintain a positive image, and avoid legal problems. As long as you have companies conducting themselves unethically - and not addressing employees' legitimate concerns when wrongdoing is uncovered - there will be whistleblowers keeping the system honest," Getnick said.
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