Department of Justice Values Competitors Who Blow The Whistle

August 30, 2018

Author: Suzanne E. Durrell,

When people think of a “whistleblower,” they typically think a corporate insider who witnessed fraud and chooses to expose it. But there is another type of valuable whistleblower: a competitor. Because competitors understand the business, they can be in a unique position to recognize fraud. They can see how the competition is unfairly beating them in the marketplace and can explain it to the government. Two recent examples illustrate the value of the competitor whistleblower.

We had the privilege of representing whistleblower/relator Sanofi North America in the largest False Claims Act settlement of 2017. Sanofi sued Mylan over the pricing and underpaying of rebates on its drug EpiPen. Mylan’s scheme undermined Sanofi’s competing drug. Significantly, Sanofi also realized this scheme defrauded the Medicaid program. The government settled Sanofi’s False Claims Act qui tam complaint for $465 million. (See Our Successes.) DOJ thanked Sanofi for coming forward and highlighted the settlement in its press release touting the banner year it had in 2017.

As an additional example, in 2018, the government settled a False Claims Act qui tam complaint brought by a family-owned business, Moldex-Metric, Inc., against its much larger competitor, 3M Company. That case alleged that 3M supplied defective dual-ended combat arms earplugs to the U.S. Defense Logistics Agency.

Competitors likewise can be valuable in other whistleblower programs. These include actions under the Securities and Exchange Commission, Commodities Futures Trading Commission, and Internal Revenue Service whistleblower programs. In short, if you think your competition is behaving unfairly or fraudulently in the marketplace, add being a whistleblower to your legal options. We can help you explore the possibilities.