WLC client Jamie Landolt became a whistleblower after discovering his employer Mallinckrodt Pharmaceuticals was underpaying Medicaid rebates, violating the False Claims Act. What happened next was an incredibly fast False Claims Act case filed in Boston, side trips to federal courts in D.C. and bankruptcy court in Delaware, and a $234 million settlement.
On April 1 (no fooling!) Jamie was joined by one of his WLC attorneys, Linda C. Severin at Georgetown University Law Center for the Anti-Fraud Coalition’s first Fraud in America podcast interview recorded in front of a live audience. The event was hosted by Georgetown Corporate Crime & Anti-Corruption Law Students Association.
Below are some highlights. You can watch the full interview here for an inside look at how one of these cases works and Jamie’s whistleblower journey.
Jamie Landolt was Mallinckrodt’s Director of Internal Controls, Gross to Net Accounting, and Government Reporting. In April 2016, the Centers for Medicare and Medicare Services (CMS) sent a letter to the company asserting that Mallinckrodt had been incorrectly reporting pricing data for its drug Acthar to the Medicaid Drug Rebate Program. That program relies on honest self-reporting by pharmaceutical companies. Instead of fixing its reporting, Mallinckrodt pushed back against CMS, insisting that its reporting was correct. Jamie had an MBA and was a Certified Fraud Examiner and a Certified Public Accountant. But he was new to government price reporting, and he was the lowest level employee “in the room” as the company decided how to respond to CMS. At first, he believed that Mallinckrodt would work with CMS in good faith to address its rebate obligations.
Over time, Jamie came to believe that CMS was right and Mallinckrodt was wrong.
When I don’t understand something, I roll up the sleeves and learn it. Things weren’t gelling for me. The reasons and the responses we were giving to CMS fundamentally didn’t agree with the basics of the law… To me, it felt there was no intention to resolve it…. The responses were really stalling. To me it felt like they were stalling efforts.
–Jamie Landolt
He left the company and, as time passed, learned that the issue was still not resolved. Jamie began to lose faith that the company would ever do the right thing, but he worried about becoming a whistleblower:
When you are a whistleblower, you have a lot of anxiety and fear, and it is mainly because of the unknown. You really don’t know what you’re getting yourself into. You kind of paralyze yourself. It is much easier to walk away. It is not the right thing to do, but you have a lot of grief.
–Jamie Landolt
He decided he couldn’t stay silent—he had to do the right thing. That meant finding an attorney to represent him.
After some searching, Jamie chose WLC to represent him, in part because of its prior success in an FCA whistleblower case against Mylan, Inc., which raised similar issues of underpaid rebates. The WLC attorneys who worked with him were Linda Severin and Suzanne Durrell.
The most important step I think if you are going to be a whistleblower is to find the right attorneys for your case. I remembered an email that had been circulated about a case with another company on the EpiPen. It was Mylan.
–Jamie Landolt
Jamie was afraid and anxious. What if he was wrong? Would anyone believe him?
The minute I spoke with [Linda and Suzanne] I knew how well versed they were in this law, and they were more up to speed than my [Mallinckrodt] leadership was. So I knew I was in good hands.
–Jamie Landolt
When Jamie’s attorneys filed his FCA whistleblower complaint under seal in 2019 (more than three years after the first CMS letter to the company), Mallinckrodt was still stalling with CMS.
My view is they basically just played rope a dope.
–Linda Severin
Mallinckrodt got away with it for a while … but that changed after Jamie filed his complaint.
By the time it was all over, the government had recovered $234 million from the company – an amount that would have been much larger if the company had not filed for bankruptcy protection. Also, Mallinckrodt agreed to report and pay the correct rebates to CMS going forward. This amounts to about $90-$100 million more per year for the Medicaid program (or about $1 billion over a decade!).
A meaningful partnership under the False Claims Act really makes these cases work well, and this [government] team had very experienced attorneys who understood that. [They] had worked with our firm before on the Mylan case…. They knew they could trust us, we trusted them. Because of the government team’s professionalism and transparency with us, it was a really, really successful partnership.
It is so much easier for us to … keep our clients grounded and so much easier for us to work with the government towards a successful resolution if they communicate with us, if they are honest with us, they tell us where they are in the process…. This team was very, very good at communicating with us, where they were, what challenges they might be facing…. It made a tremendous difference.
–Linda Severin
In honor of their extraordinary efforts, the government team received the TAF 2022 Public-Private Partnership Award.
As far as working with [the government], I’d say it was a very pleasant experience… The communication with my team was excellent, it was constant. I couldn’t believe the writing, the arguments, our positioning. It was top notch, really counteracted and made – I felt – Mallinckrodt’s arguments look silly.
–Jamie Landolt
The government awarded Jamie a relator’s share of 20%, a reward well above what’s typical.
I was heavily considered [by the government] as an important piece of this process. Something really good to feel about because you’re not assured anything. So I felt very valued by the amount I received.
–Jamie Landolt
Indeed, he was valuable. Once the federal and state government had Jamie’s inside information, they could see through Mallinckrodt’s “rope a dope” strategy and use all their resources and investigative tools to stop it.
I think one thing that was different in this case too is that they [the government] were aggressive, and I think it worked really heavily in their favor. When you put a public company out there and they have to respond quickly, they haven’t had time to think about it … and I think they caught them off guard.
–Jamie Landolt
Yes, he would. While he had been fearful and anxious about becoming a whistleblower, walking away was not an option for Jamie. The company was pocketing money meant to help people who are disabled, poor, sick, and/or elderly who rely on the Medicaid program. That wasn’t right and weighed on his conscience.
Also, he now realizes that, even if you don’t become a whistleblower, you’re still a key witness who could be subpoenaed by the government and get caught up in a fraud investigation anyway, but with no potential for a financial reward.
WLC thanks TAF, GULC, and Georgetown Corporate Crime & Anti-Corruption Law Students Association for the opportunity to discuss this case.
Fraud in America is a project of The Anti-Fraud Coalition (TAF Coalition), a 501(c) (3) organization. To learn more about Fraud in America visit taf.org/podcast. To learn more about TAF Coalition visit taf.org.
Whistleblower Law Collaborative LLC devotes its practice entirely to representing clients nationwide in bringing whistleblower actions. Our clients bring actions under the federal and state false claims acts, and other whistleblower programs including those addressing health care fraud. If you are considering becoming a health care fraud whistleblower or are aware of other types of fraud, contact us for a free, confidential consultation.