Why people blow the whistle, and what they get out of it.

Pharmaceutical companies paid out record-breaking fines last year for mis-marketing their drugs. The cases began with allegations leveled by whistleblowers.

Last year, several federal juries in Philadelphia returned the largest ever settlements against drug companies. These lawsuits, which resulted in billions in fines, were spurred by a handful of whistleblowers. WHYY’s Kerry Grens looks at the growing phenomenon of the whistleblower suit.

[Want to know more? Join us for a live webchat on whistleblowing today at noon.] [audio:100202kgwhistle.mp3]

Allen Jones comes across as …. intense. He lives in a cabin he built in the woods of Snyder County Pennsylvania. He speaks in a very direct and exacting manner. He smokes, and runs his hand through his hair when he gets lost in his thoughts.

Eight years ago, Jones worked as an investigator in Pennsylvania’s Office of the Inspector General.

Jones: An issue landed on my desk involving the state pharmacist Stephen Fiorello.

Jones was asked to look into payments Fiorello had received from pharmaceutical companies. To Jones, it seemed obvious. The payments involved a conflict of interest verging on crime.

Jones: As all of this began to emerge, I began to press my supervisor to broaden the investigation from a personnel issue into a fraud issue and to look more closely at what the drug companies were doing.

Jones detected what he saw as a broader pattern of drug companies improperly influencing formularies, the guidelines that governments set for reimbursing drug prescriptions.

Jones: Everything I’m uncovering here really causes me to suspect the validity of these guidelines. And also to see, with the massive numbers of dollars involved, the motivation to perpetrate the fraud.

But Jones says higher-ups told him not to pursue the case.

Jones: And I kept pushing and I kept pushing and I kept pushing.

Jones felt isolated and ignored.

Jones: It was one of the darkest times of my life. At that point I’m 50 years old. I knew I was going to lose my job at some point. I hoped that I could hold out. But it was very very frightening and very scary.

Jones’ premonition was right. He was fired, after he went to the New York Times with his allegations.

But that was hardly the end of the story. Like most whistleblowers, Jones did not give up easily.

Guyer: A real whistleblower is essentially somebody who has to be tenacious and stick with it over a period of time.

Thad Guyer is a Seattle-based lawyer who represents whistleblowers suing their employers for retaliation. He spoke a few months ago at a conference at Drexel University Law School.

He says that besides being tenacious, whistleblowers tend to show an obsessive tendency to adhere to rules, and a belief that if you point out wrong doing, someone’s going to fix it.

Guyer: They’re simply put together that way. These whistleblowers are not capable, in my opinion, of not blowing the whistle. They just can’t tolerate these kinds of dangers and wrong doing going without some accountability.

But others argue that whistleblowers are mostly in it for the money.

Whistleblowers in two massive lawsuits against drug makers Pfizer and Eli Lilly last year earned themselves millions of dollars for their efforts.

This is the way those lawsuits work. A whistleblower finds something amiss and sues the company. If the government has stake in the case, such as fraud against federal programs like Medicare and Medicaid – the U S attorney joins a lawsuit and together they share the settlement.

Sheller: In the Lilly case there was an $800 million fine.

Stephen Sheller is a Philadelphia-based lawyer who represented whistleblowers in the Pfizer and Lilly lawsuits.

Sheller: The funds that the government recovers from this are immense. Lilly is still the largest single drug recovery in history for the government.

In that case, whistleblowers complained that the company was marketing the anti-psychotic drug Zyprexa for illnesses that it wasn’t approved for – an illegal practice called off-label marketing.

U.S. Attorney Laurie Magid a year ago:

Magid: Off-label promotion is a serious matter. It can lull physicians into thinking that a drug has been approved by the FDA as safe and effective.

Tom Gallagher represented Eli Lilly during the lawsuit. He says the company has systems to respond more effectively to whistleblower complaints internally. .

Gallagher: Nobody’s more committed to doing it the right way. It’s just bad business to do it the wrong way. And celebrating whistleblowers as the only remedy to this problem is perhaps the wrong perspective.

But whistleblowers are celebrated – and attorney Stephen Sheller says the record-breaking settlements are drawing more of them out of the woodwork.

Sheller: So you do have this issue of the public knowledge that you can be a whistleblower. Secondly, you have layoffs now occuring in the drug industry.

Sheller says he’s received calls from former pharmaceutical employees wanting to expose their practices.

The Department of Justice has about a thousand false claims lawsuits waiting for attention – 20 percent of them concern drug companies. Allen Jones’s case is one of them. Even after being fired, Jones doggedly kept up his research on state prescription guidelines. That led him to Texas. Jones says he found evidence that drug maker Janssen improperly marketed the anti-psychotic drug Risperdal through state programs.

In 2006, Jones convinced the attorney general in Texas to sue the company.

Jones: It was tremendously vindicating for me. I had been treated like a crazy person. And yet a very deliberate body and competent investigators and attorney general staff found my allegations to be credible enough to pursue a major lawsuit.

The Texas lawsuit is still pending. A spokesperson for Janssen says the case is without merit, and the company follows FDA’s marketing rules.

But more recently, Jones received another vindication. About a year ago in Pennsylvania, the former state pharmacist whom Jones had investigated was convicted of accepting drug company kick backs.