On January 2, 2011, 60 Minutes aired a program titled “Bad Medicine: The Glaxo Case” which focused on Cheryl Eckard and her experience as a former employee at GlaxoSmithKline (GSK) turned whistleblower. Ms. Eckard will receive an estimated $96 million award of the $750 million settlement reached with GSK. The large sum will settle civil and criminal charges claiming that GSK engaged in faulty manufacturing practices and sold the resulting adulterated medications to various government health plans.
Whistleblowers usually only become whistleblowers after efforts to correct a problem have failed and, oftentimes, only after they’ve been fired by the company for complaining.
In Cheryl’s case, before becoming a whistleblower, she was a loyal, hard-working global quality assurance manager at GSK. In 2002, she was sent to the Puerto Rico manufacturing facility after the FDA issued a warning letter concerning the facility. Once at the plant, she observed flagrant manufacturing problems and reported them to her superiors. Her concerns, however, fell on deaf ears. For eight months, she continued to warn company executives about the problems at the Cidra plant, to no avail. Eventually, she was fired.
Ms. Eckard then went to the FDA and filed a whistleblower lawsuit against GSK. Her allegations were confirmed by government investigators. Adulterated medications, including the antidepressant Paxil and diabetes drug, Avandamet, were being distributed to the public and government health plans.
Ms. Eckard’s actions resulted in the shutdown of the Puerto Rico plant and the fourth-highest settlement collected in a whistleblower lawsuit. The amount awarded to Ms. Eckard, an estimated $96 million, is the largest amount awarded to a single whistleblower in history.
Although a jaw-dropping number, the road leading to it and the decisions Cheryl Eckard made along the way were not easy. Her courage and perseverance in exposing the problems at the Puerto Rico plant resulted in her losing a job she loved. Ms. Eckard had no idea whether she would ever see a penny as a result of her lawsuit, much less millions or tens of millions of dollars. Whistleblower laws provide not only protection but serious compensation to those courageous enough to come forward with evidence of corporate fraud and corruption because it takes guts to take on a multi-billion dollar corporation. Whistleblowers like Cheryl Eckard protect consumers, get money back into government coffers, and save taxpayers billions of dollars.
“Whistleblower payouts are based on a percentage of what companies have been bilking from the government (and the American public), sometimes bilked amounts reach into the tens of billions of dollars, such as in Cheryl Eckard’s case,” qui tam lawyer Bijan Esfandiari stated. “Even a fraction as small as 1% of that income could result in a False Claims Act award of hundreds of millions of dollars. With so much potential income at stake to entice illegal activity, it takes a lot to deter a company’s urge to do the wrong thing.”
In a separate, but related lawsuit GSK agreed, in 2009, to settle claims of individual consumers and insurance companies who paid for adulterated Paxil CR manufactured at the Puerto Rico plant. Baum Hedlund Aristei & Goldman represented the individual consumers and insurance companies that purchased and used the adulterated medication. This Paxil class action settled for $28 million.