TRENTON, N.J. – A paralegal recently fired by French drugmaker Sanofi has filed a whistleblower lawsuit, claiming she was discharged after protesting an alleged kickback scheme to increase U.S. sales of its insulin medicines.
The lawsuit, filed in New Jersey Superior Court in Newark by Diane Ponte, accuses Sanofi SA, recently ousted CEO Christopher Viehbacher and more than 10 other executives of paying consultants millions to induce pharmacists to fill prescriptions for generic insulin with Sanofi’s brand-name versions, rather than those of rival Novo Nordisk A/S.
In a statement, Sanofi denied firing Ponte for whistleblowing, calling her allegations without merit and saying she’s a “disgruntled former employee who is opportunistically attacking our company.”
Attempts to contact Viehbacher were unsuccessful.
Ponte was fired in October, two weeks before Sanofi’s board ousted Viehbacher, citing slumping sales and problems with his management style. The lawsuit claims his involvement in the alleged fraud also was a reason.
The lawsuit alleges that Ponte, whose job in Sanofi’s diabetes division involved approving vendor contacts as meeting the requirements of federal health care laws, was fired in mid-October after months of retaliation from superiors for raising concerns about the alleged bribery and kickback scheme.
“She was a model employee, by their standards,” receiving excellent evaluations and commendations from clients over 13 years with Sanofi, Ponte’s attorney, Rosemarie Arnold of Fort Lee, New Jersey, said in an interview Friday. “She loved her job. She was so loyal to this company, and having been fired took a toll on her emotional well-being.”
The lawsuit seeks unspecified compensatory and punitive damages, attorney’s fees and other costs.
According to the suit, Ponte was retaliated against after she balked when directed in March 2013 to approve nine contracts totalling about $34 million between Sanofi and two consulting firms, Deloitte LLP and Accenture PLC, neither of whom are named as defendants.
Arnold said the paralegal told her manager she couldn’t approve the contracts because they had already been signed before her review, which was improper, and they called for huge payments without any services being provided. Arnold said the consulting firms used the money to induce hospitals, pharmacies and doctors to give preference to Sanofi insulin brands such as its top-selling product, Lantus.
“Accenture and Deloitte would make deals with the pharmacies whereby when a patient came in with a generic prescription for insulin, the pharmacist would push the Sanofi insulin,” Arnold said. She added that if the prescription specified a Novo Nordisk insulin, the pharmacists would urge patients or even contact their doctors, saying they should choose a Sanofi brand because it was better.
The suit states that Raymond Godleski, a supervisor in the U.S. diabetes marketing division, told Ponte that Viehbacher and Dennis Urbaniak, the vice-president of Sanofi’s U.S. diabetes business, knew she was holding up the consulting contracts and that Viebacher was “extremely unhappy.”
After Ponte refused to sign off, the company conducted what Arnold termed a “farce” internal investigation. No one was disciplined, she said, but two of the key defendants, Godleski and Urbaniak, “retired” from Sanofi. The suit states they each received “millions of dollars in severance packages and/or in their pensions,” and both then landed lucrative positions as consultants to Sanofi.
Meanwhile, Ponte was subjected to frequent verbal criticism, threatened with violence and even grabbed and yanked around by one manager, the suit states. When she was fired in October, Arnold said, a manager told her it was because of her whistleblowing activity.
Sanofi’s U.S. spokeswoman, Mary Kathryn Steel, said that given the pending litigation the company could not comment on the allegations of kickbacks and bribery.
The suit notes the alleged illegal activity took place while Sanofi was operating under a corporate integrity agreement with the U.S. government that required it to obey U.S. laws and report any illegal activity to the government, because it had previously failed to follow federal health care laws. It didn’t report the bribery allegations or internal probe, Arnold said.
Such corporate integrity agreements have become almost routine in the pharmaceutical industry.
Multiple pharmaceutical companies have gotten into trouble with the U.S. government for marketing drugs for unapproved uses, overcharging government health programs such as Medicare for their medicines and other illegal behaviour. They have agreed to pay significant fines, sometimes a few billion dollars, although they rarely admit any wrongdoing.
Then, the same companies get caught later for similar behaviour, leading analysts to say that the drugmakers see the fines as a cost of doing business, because the billions of dollars in resulting extra medicine sales far exceed any fines.
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