Employing Potential Whistleblowers
Tricia Mullins took a risk when she joined Aegerion, a
biopharmaceutical company, in September 2012.
Its only product, Juxtapid, would not get FDA approval until December. It had had no
revenue and $60 million a year in expenses.
It stayed afloat only by issuing debt and equity securities, and its
ability to do that depended on Juxtapid’s prospects. At $311,000 a year per patient, the drug could
turn the business around. Mullins’ job was
to find customers in New York City.
Unfortunately the market for Juxtapid was extremely limited[1]. If the company was to survive, the drug had
to be sold for “off-label” purposes – patient uses not approved by the FDA. There are legal problems with doing that,
though.
By March
2013 Mullins was butting heads with her boss who set sales goals that were
impossible to meet within the law. At a
sales meeting in April it was clear her peers were making their goals with off-label
sales. She spoke out against the illegal
practice. One week later she was told
her sales performance was disappointing.
In June her boss told her again. She
complained to the CEO in July. He didn’t
reply.
At the end of July Mullins and two other sales reps filed a false claims suit
against Aegerion because many off-label customers were on Medicare. Mullins was stressed and went out on medical
leave. Aegerion said she abandoned her
job. It stopped paying her and cut off
her emails and other communications.
In April 2014 Mullins started a new job,
in patient advocacy not sales. She got
on with life. Her lawsuit continued for another
three plus years. Then it succeeded in a
big way. Aegerion agreed to pay $35
million to settle criminal charges and false claims allegations. Mullins and her co-relators were awarded $4.7
million.
It seemed like a happy ending to a whistleblower’s story. Mullins observed wrongdoing. She was offended and spoke up, trying to
change corporate misbehavior. She suffered
retaliation, but stood up again. As Stephen
M. Kohn’s The
New Whistleblower’s Handbook promised, she emerged victorious.
This telling simplifies some elements of her story. She knew what she was getting into when she
joined Aegerion. The company needed to
push edges of the envelope, or it was dead.
She was in the thick of things as sales rep for a new product that had
to move. And she was no naïf. She’d worked for 6 biotech companies before
Aegerion. Still, her awareness did
nothing to reduce the company’s culpability. The
story turned out as it was supposed to.
When the Department
of Justice announced its settlement with Aegerion in September 2017, it
named Mullins as one of the whistleblowers.
Her 23-year career to that point included jobs at ten companies. Loyalty was not an obvious strength, but public
fame at whistleblowing marked her as a potentially dangerous employee.
To protect her position at her new employer, Horizon
Pharma, her attorney sent the company a letter.
He enclosed DoJ’s news release and reminded them they would be sued if
they retaliated against her in violation of the False Claims Act. In December the company fired her supposedly for
violating confidentiality rules. As promised,
her
attorney filed suit against Horizon Pharma.
Whistleblowers are often morally ambiguous characters. We often suspect we are joining up with scumbags
before we dream of whistleblowing. We squeeze
out enough personal benefit even if they are scum.
In one big-time case, Sherron
Watkins surely was aware of Enron’s unethical culture[2]
before she discovered its accounting fraud.
She was paid well, but Enron still did wrong. Whistleblowers, big-time and small, need
jobs. We put up with imperfection.
Like Mullins, I had worked at enough companies to establish I
was not an unreservedly dedicated employee.
Worse, in the view of HomeFirst’s CEO, I had spent most of my time with
for-profit companies. I lacked sufficient
passion for HomeFirst’s mission. We both
knew this before my whistleblowing project.
Like Aegerion, HomeFirst operated at the ethical edge almost
by necessity. It had a history of
compliance problems. The $1.2
million HUD overbilling was one. There
was also its 2007
licensing problem[3],
well before issues I
disclosed. HomeFirst also had a
history of financial challenges beginning before I joined in 2007. I became its CFO because I thought
I
could deal with them. Conditions improved
but then worsened again under CEO Jenny Niklaus. I was aware of all this and, like Mullins, I stayed
with the company. Maybe I thought I could
help fix things. Maybe I decided the job
paid well enough and I would retire before anything disastrous happened. Probably a little like Mullins.
We often bring unhappy conclusions on ourselves. We could avoid them by leaving earlier, but
we stay for reasons often selfish. And our
employers know well in advance of our whistleblowing what could happen. Signs may be there before we are
hired, as they were with Mullins. They may
even plan for it.
It looks like Horizon Pharma didn’t recognize the signs when
they hired Mullins. Her lawsuit will
test whether their suspicious claim will win.
HomeFirst’s
did against me.
[1]
Juxtapid was approved to treat homozygous familial hypercholestrolemis, a rare
lipid disorder inherited from both parents that results in a limited or
complete inability to remove low-density lipoprotein from the blood. Aegerion’s price for the drug, which was
taken once a day, was $311,000/year.
[2] Sims, Richard R.
and Johannes Brinkmann. “Enron
Ethics (Or: Culture Matters More than Codes).”
Journal of Business Ethics 45 (2003): 243-256
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