Wall Street may soon become as much a foe as it has been a friend of the pharmaceutical industry. After spending decades pumping up the profits of Big Pharma by trading its shares, wealthy investors are now toying with the idea of financing whistleblower lawsuits against the companies, in order to get a cut of the court settlements that can be worth hundreds of millions of dollars.

 

Hedge fund managers see the potential for big payouts from helping pharma ex-employees sue their employers for violating laws pertaining to the sale and distribution of drugs.

 

Whistleblowers can receive anywhere from 15% to 30% of a court settlement, but such cases can drag on for years and years. That’s where a hedge fund can step in and offer to support a plaintiff until a verdict is reached, with the understanding that the investor(s) are going to take a chunk of the award if the company loses.

 

To get an idea of the money involved, GlaxoSmithKline agreed to pay $750 million to settle one whistleblower lawsuit, and of that amount, plaintiff Cheryl Eckard received $96 million.

-Noel Brinkerhoff

 

Funding Pharma Whistleblowers (by Andrew Turley, Chemistry World)

Glaxo to Pay $750 Million over Tainted and Ineffective Drugs (by Noel Brinkerhoff, AllGov)

Pfizer’s Bad Week: Kickbacks, Whistleblowers, and Doctors on the Payroll (by David Wallechinsky, AllGov)