Big Pharma Whistleblower Awarded $1.6 Million for Exposing Cancer Drug Medicare Fraud

Wednesday, July 02, 2008 by: David Gutierrez, staff writer
Tags: Big Pharma, health news, Natural News

(NaturalNews) A federal judge has awarded a whistleblower $1.6 million for tipping off federal prosecutors to a scheme by pharmaceutical company Cell Therapeutics to illegally promote unapproved uses of the cancer drug Trisenox.

Prosecutors argued against granting whistleblower James Marchese any portion of the $10.5 million settlement that Cell Therapeutics agreed to pay. Typically, whistleblowers are entitled to between 15 and 25 percent of any funds received by the government, unless they were the initiator or planner of the offense.

The offense in question involved defrauding Medicare by promoting unauthorized uses of Trisenox. Among Marchese's actions in furtherance of the fraud was getting unapproved uses of the drug listed in cancer journals, then writing letters to Medicare directors citing those listings as proof that such uses of Trisenox should be reimbursable.

But Marchese said that he was only a low-level employee acting on the orders of his supervisors, and that he risked his job by going to the government. Marchese and his lawyers asked for the full 25 percent, or $2.6 million, saying that without him the government would have had no case.

Instead, Judge Marsha J. Pechman instead awarded him the minimum, 15 percent. She ruled that he was not an initiator of the scheme, and that in its early phases he believed his actions to be legal. But she scolded him for waiting so long to come forward after realizing that the company was committing fraud, even as patients continued to be placed at risk by the company's actions.

According to the court, Marchese became angry after being passed over for a promotion, at which point he wrote a letter to his superiors taking credit for the Medicare scam. Only after another confrontation with his superiors did Marchese eventually go to the authorities, in October 2002.

By settling the case, Cell Therapeutics avoided admitting to or being convicted of any crime.