Whistle-blower honored in Texas, fired in Pa.
In Texas, Allen Jones determined that state employees were getting kickbacks from pharmaceutical companies, and his efforts resulted in his being named Whistle-blower of the Year and awarded about $20 million of the state's $158 million settlement.
In Pennsylvania, where Jones was a commonwealth-paid investigator, he and his information were dismissed - twice, almost a decade apart.
Jones had discovered malfeasance that was similar in both states, with the drug companies wanting state officials to help push higher-priced antipsychotic drugs to foster children, among other wards of the state, through taxpayer-funded Medicaid programs.
In Texas, the attorney general turned the information into a $158 million payment from Johnson & Johnson's Janssen subsidiary, which makes the antipsychotic drug Risperdal. The company offered to settle Jan. 19 after six days of trial testimony. More important, fewer children were prescribed the powerful drug, which hadn't been approved for use in children at the time but had known side effects such as weight gain and breast growth in boys. In rare cases, patients died while using the drug.
Though J&J did not acknowledge any wrongdoing, the settlement was a significant moment in the firm's continuing multiyear, multi-court, national legal fight over Risperdal.
Similar circumstances but a wholly different story in Pennsylvania.
In 2002, as he investigated the Department of Welfare, Jones was rebuffed by supervisors in the Office of Inspector General, one of whom allegedly told him to "quit swimming against the current in the pharmaceutical case," and that pharmaceutical companies "write checks to both sides of the aisle."
Steven J. Fiorello, a pharmacist who oversaw drug policies at state hospitals, was convicted in Dauphin County Court of Common Pleas on conflict-of-interest charges, but the state never used his information in its later efforts to stop the practice.
Jones was fired in 2004. Despite the personal and financial hardship he endured until getting millions from the Texas case, Jones tried to help Pennsylvania again.
In April 2011, he wrote to the new state leadership, including Gov. Corbett, then-Acting Attorney General William Ryan, and Inspector General Kenya Mann Faulkner, offering similar information that might expose current fraud. Jones had also shared more-recent information with Iowa Sen. Charles Grassley, who has held several hearings about overprescribing of antipsychotics through Medicaid.
The OIG eventually sent two men to see Jones. Then he got a letter from OIG general counsel Wesley Rish - the same Wesley Rish who was among the OIG leaders who ignored his information in 2002, fired him in 2004, and were defendants in the first of two lawsuits.
"You have not presented any issues which rise to the level of fraud, waste, abuse or misconduct within the OIG's jurisdiction," Rish wrote in a letter dated June 10, 2011.
Sitting in his central Pennsylvania cabin - off the beaten track, off the electrical grid - Jones shook his head when he read from the letter, a copy of which he gave to The Inquirer.
"They're saying nothing rises to the level of fraud after Texas?" Jones said. "The same facts we used in Texas are available in Pennsylvania. The same pattern of deceit. The same lies regarding kids. The same off-label marketing. The same corruption of public employees. The same everything. I helped Texas get $158 million, but Pennsylvania says, 'This isn't a concern of ours'?"
Rish declined to comment. Faulkner, now Rish's boss at OIG, declined through a spokeswoman to answer questions, including about the conflict of interest in having Rish weigh Jones' recent offer of help.
Besides Texas, Louisiana ($258 million), South Carolina ($327 million), and Arkansas ($1.2 billion) filed individual state suits and won big, at least so far, though J&J is appealing.
Whistle-blower lawsuits are usually filed by individuals. Governments, most often the state or federal attorney general, then choose whether to join the legal effort. Jones filed a whistle-blower lawsuit in Texas in 2004 and the Texas attorney general joined it in 2006.
Corbett was elected to the first of two terms as Pennsylvania attorney general in November 2004, just after Jones' investigation became public. But Corbett declined to pursue an individual state case against J&J and other drug companies using Jones' information, as Texas did.
After Corbett declined, then-Gov. Ed Rendell's office of general counsel hired an outside law firm to file a 2007 suit, but also without Jones' information. Philadelphia Common Pleas Court judges dismissed that suit and the decision was upheld on appeal to the Commonwealth Court in 2012.
Jones said the suit, absent his information, deserved to be dismissed. For one of the few times, Janssen agreed with Jones.
"The Commonwealth had no evidence of wrongdoing by our company and no basis for its lawsuit," Janssen said in a statement after the decision.
Asked about Jones' 2011 offer to help, Corbett's spokesman, Kevin Harley, said, "It was received. A determination was made that we had ongoing cases."
Current Attorney General Linda Kelly was nominated before, but confirmed after, Jones' offer of help in 2011. Asked why the new information was not acted upon, Kelly's spokesman Nils Hagen-Fredericksen said, "It would not be appropriate for this office to speculate about legal or investigative decisions made by other agencies."
Both spokesmen shifted blame to the Rendell administration for the dismissed suit and said their bosses have made a great effort to stop inappropriate marketing by drug companies. Both pointed to Aug. 30, when J&J said it agreed to pay $181 million to settle a case involving drug marketing. That case - like others recently - was a joint effort of 36 states and the District of Columbia. Pennsylvania's share was $8.4 million.
Still pending is a federal case involving Risperdal that reports suggest might cost J&J as much as $2.2 billion, and hundreds of individual lawsuits.
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On Monday, in Philadelphia Court of Common Pleas, J&J settled for an undisclosed amount with a 21-year-old man from Texas - who grew breasts after being prescribed Risperdal as a child - rather than risk having chief executive officer Alex Gorsky ordered to testify.
J&J's legal bills are offset by revenue. In 2007 alone, J&J had $4.7 billion in revenue from antipsychotic drugs, most of which were versions of Risperdal.
"I'm not saying eliminate the profit motive," Jones said, when asked about the common refrain that such a motive spurs innovation and production of worthy drugs. "If Risperdal and Zyprexa [an Eli Lilly antipsychotic] were really that safe, efficacious, miracle drugs the companies presented them to be, then they deserve to make that $40 billion [over time]. But the fact is, they weren't. Give us the drug that does what you say it does. Don't exaggerate. Don't kill people and not let us know."
On April 19, 2004, the FDA sent a warning letter to Janssen because a company letter to health-care providers "misleadingly omits material information about Risperdal, minimizes potentially fatal risks associated with the drug, and claims superior safety to other drugs in its class without adequate substantiation."
In 2009, Lilly paid $1.4 billion to settle charges that it illegally promoted Zyprexa.
Whistle-blowers get 15 to 35 percent of a settlement, depending on how many there are and their contributions to a case. The Texas attorney general decided Jones' share.
Jones said getting the money was a "relief," and that "the rest of my life could be better for me and for my family than the last decade had been."
But there were painful times.
"I had passed through 10 years of living very close to the bone," Jones said. "My firing for 'willful misconduct' destroyed any chance I had to continue in my career [as an investigator]. The first years were dark ones. I lost the home I had built when I was 26 years old, lost my good credit and a whole lot more. I moved to my cabin in the mountains with no electricity or running water."
He is married for the second time. College educations for grandchildren and stepchildren are set. He now also has a place in a "sleepy fishing village" in Florida.
As idyllic as that sounds, he cautions would-be whistle-blowers to be ready for "dark" days, get sound advice, and not assume there will be a payoff. Indeed, do it for a cause beyond cash.
"They are now drugging fewer foster kids in the state of Texas in 2012 than they were in 2006," Jones said. "Those are the things I think about and smile over in the quiet of my house."
Contact David Sell at dsell@ phillynews.com or 215-854-4506. Read his blog at www.philly.com/phillypharma
and on Twitter @phillypharma.