Former drug-company rep alleges systemic fraud [View All]

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Blowing the Whistle, Many Times

By MARY WILLIAMS WALSH
Published: November 18, 2007


WHEN Cynthia Fitzgerald started out in pharmaceutical sales 20 years ago, she received ample training on the right and wrong ways to sell medical products. Right was selling on the merits. Wrong was luring customers with perks and freebies. It was O.K. to buy doctors lunch or dinner, for example, but tempting them with lavish gifts was taboo.

“There were pretty stringent rules back then,” recalls Ms. Fitzgerald, now 50 and a grandmother living in Dallas. “It was really clinically driven.”

But she says those early lessons didn’t serve her so well when she went to work on the other side of the table in 1998, in health care purchasing. Going by the book, and expecting her colleagues and employer to do the same, cost her a job, most of her friendships and several years of her life, she says.

Eventually, Ms. Fitzgerald decided to file what could become one of the largest whistle-blower lawsuits on record. And her case, which names more than a dozen companies as defendants — some with well-known names like Johnson & Johnson, Becton Dickinson and Merck — offers a window onto a little-known world, where billions of dollars’ worth of medical products are sold each year to institutional buyers like hospitals.

The suit, filed in 2003 in federal court in Dallas, and unsealed this year, argues that improper sales practices, together with erroneous accounting, are invisibly draining millions of dollars out of vital public programs like Medicare through overcharges or unauthorized uses. While whistle-blower cases typically involve, at most, a handful of companies, Ms. Fitzgerald’s alleges systemic fraud across a whole network of companies and more than 7,000 health care institutions.

Her contentions are set against a complex backdrop: spiraling health care costs and debates about Medicare. State and federal authorities in Texas are investigating Ms. Fitzgerald’s allegations, and any decision by them to join her case may give the suit momentum in the courts. But her corporate adversaries dispute her accusations.

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http://www.nytimes.com/2007/11/18/business/18whistle.html