Taxpayers Against Fraud has named Allen Jones the 2012 whistleblower of the year.
Here’s the story, as told by Taxpayers Against Fraud’s Patrick Burns.
A graduate of Penn State University, with a Bachelor’s Degree in health physical education and therapy, Jones worked for the Pennsylvania Office of the Inspector General (OIG) on two separate occasions.
His first stint at the Office of the Inspector General lasted five years.
He liked the work and was promoted several times, but the travel was too much with two adolescent teenage daughters to raise.
Reluctantly, Mr. Jones left the OIG to work rehabilitating and selling houses – a job he did for the next 11 years.
In 2002, with his daughters grown, Allen Jones returned to the Office of the Inspector General, and was assigned to investigate the State’s chief pharmacist, Steve Fiorello, who was reported to be managing an unregistered bank account into which drug companies were depositing checks.
Jones investigated and discovered that Fiorello was indeed getting checks from Johnson & Johnson and Janssen Pharmaceutical, the maker of the atypical anti-psychotic drug Risperdal.
Ostensibly, the money was to pay for travel and speaking honoraria.
There was only one problem – Pennsylvania state employees are not allowed to charge or keep honoraria.
Upon further investigation, Jones discovered that money flowing into the unregistered Fiorello account was also flowing out to the Director of the Texas Department of Mental Health and Mental Retardation.
What was going on?
Johnson & Johnson and its Janssen subsidiary were paying for state officials to fly all over the country order to promote the “Texas Medication Algorithm Project” or TMAP.
TMAP appeared to be little more than an off-label marketing program funded by drug companies which used flattery, cushy travel, expensive restaurants, and pocketed honoraria to get key state officials to green light switching massive numbers of patients from low-cost mental health drugs to new atypical antipsychotics, such as Risperdal, that cost ten times as much.
When Allen Jones took his findings to his boss, he was told to walk away from the investigation.
He was told that investigating pharmaceutical company payola was “too political.”
When Allen Jones did not walk away, he was taken off the case as lead investigator.
By now Allen Jones had learned that one of the side effects of Risperdal was that it often made people gain 50, 100, 150, and even 250 pounds.
The potential result of such weight-gain is predictable: diabetes, strokes, and heart attacks.
Then, in January 2003, Jones learned that TMAP was going to be implemented in one fell swoop in Pennsylvania.
The new PennMAP program would switch Pennsylvania patients to the new atypical antipsychotics, regardless of their medical needs or background, and at a cost that was more than 10 times higher than the older and safer medications.
After filing a First Amendment civil rights lawsuit to try to preserve his job, and the bribery and kickback records, he went to The New York Times.
After that, Jones was fired.
Jones then filed a retaliation lawsuit against Pennsylvania’s Medicaid OIG and, with two boxes of documents, went to Texas where he met with Charles Siegel of the Waters & Kraus firm, who then connected him with Tom Melsheimer and Tommy Jacks at the law firm of Fish & Richardson.
Together they filed a state False Claims Act case, which was joined by the Texas Attorney General’s office in 2006.
The complaint alleged public corruption and a widespread campaign of bribery and off-label marketing of the drug Risperdal.
Jones eventually settled his wrongful discharge case with the State of Pennsylvania, but after paying his bills, putting new tires on his truck, and filling his propane tanks for the winter, he had only $1,200 left.
In 2008, Steven Fiorello, the chief pharmacist for Pennsylvania who Jones began investigating in 2002, was convicted of felony conflict-of-interest charges for taking payments from drug companies, including Janssen and Pfizer Inc.
He was sentenced to 18 months of probation, fined a total of $30,000, and cited by the Pennsylvania Ethics Commission.
Even as Allen Jones was blowing the whistle on TMAP, other whistleblowers were coming forward to allege other off-label Risperdal marketing schemes crafted by Janssen and Johnson & Johnson.
In January 2010, the U.S. Department of Justice joined two False Claims Act cases against Johnson & Johnson and Janssen, alleging the companies paid millions of dollars in kickbacks to Omnicare in order to get that company to operate as an extension of their sales forces in dispensing Risperdal to nursing home patients.
In September 2010, Johnson & Johnson and Janssen took a Risperdal case to trial in Louisiana.
The jury came back with a $257 million judgment.
In December 2011, a South Carolina judge upheld a $327 million jury verdict in that state against Johnson & Johnson and Janssen for off-label marketing of Risperdal.
At about this same time it was reported in the press that the Eastern District of Pennsylvania was preparing a global federal Risperdal settlement that weighed in at approximately $1 billion.
That same month, Jones’ cases went to trial in Texas, and the testimony and emails that came out in that first week in court told a devastating story. Johnson & Johnson and Janssen pulled the plug and settled for $158 million.
A settlement, of course, is different than a verdict, as it represents the bend point where a company will fold rather than litigate.
Since Texas represents 8 percent of the U.S. population, a $158 million settlement in that state raised the specter of a $1.8 billion national settlement.
Bill Weldon, the CEO of Johnson & Johnson decided to step down from his position in January 2012, and the board of Johnson & Johnson appointed Alex Gorsky, the former Vice President for Sales at Janssen, as the new Chief Executive Officer of Johnson & Johnson.
The next month, another state Risperdal case went to trial in Arkansas, and the staggering jury verdict there was for $1.1 billion in a state with less than one percent of the U.S. population.
Johnson & Johnson was very clearly in trouble.
The Department of Justice swung into action and demanded that Alex Gorsky appear for a deposition.
What did he know, and when did he know it as it related to alleged kickback schemes and off-label marketing of Risperdal?
The press, which had once reported that a global settlement was penciled in at $1 billion, was now reporting a potential settlement topping $2.2 billion.
Clearly, there is a lot of credit to go around on this matter.
Applause is owed to the private lawyers who brought this case and the other Risperdal cases around the country.
Without the hard work of the Texas, South Carolina, Louisiana, and Arkansas Attorney General’s offices their respective cases would not have gone to trial and been won in such a decisive and spectacular fashion.
And, of course, the U.S. Department of Justice is now in the process of leveraging a very large federal settlement that covers most of the states.
When push comes to shove, however, the person who started the ball rolling was Allen Jones, who stood up and spoke up even when he faced loss of his livelihood.
For that bravery and tenacity, the TAF Education Fund is pleased to honor Allen Jones as our Whistleblower of the Year.