Talking Whistleblowing and the Pharma Rebates Whistleblower Case With an Actual Whistleblower, With Ann Lewandowski
Episode Description
An EBC Allegedly Pocketed $27 Million of Client Pharma Rebates. Here's What Happened Next.
An employee benefit consultant where 61% of revenue allegedly came from keeping clients' pharma rebates — undisclosed, in violation of the Consolidated Appropriations Act of 2021, funneled into the executive bonus pool. When the compliance officer raised the alarm and eventually disclosed to a plan sponsor, he was fired. That firing is what made this a whistleblower case.
Stacey Richter speaks with Ann Lewandowski — nationally recognized healthcare executive and whistleblower known for Lewandowski v. Johnson & Johnson — about the pharma rebates case, what it means for plan sponsors, and what to do if you are an employee watching something like this unfold.
WHAT YOU'LL LEARN
✅ The anatomy of the case: an EBC's TPA arm allegedly kept client pharma rebates — 61% of revenue — without disclosing them as required by the CAA, funneled them into the executive bonus pool, and fired the compliance officer who tried to make the disclosures; originally filed in Maryland state court, moved to federal court because it involves ERISA, with the Department of Labor now working alongside plaintiff's counsel
✅ Why Form 5500 disclosure templates matter: a vague statement like "may from time to time receive third-party compensation" satisfies the letter of the law while hiding everything; Ann's advice is to use your own template with black-and-white line items so the vendor either discloses or actively lies
✅ What a qui tam lawsuit is: qui tam provisions allow private individuals to sue on behalf of the government and collect a portion of the recovery — the upside most employees don't think about when weighing whether to come forward
✅ The Upjohn warning: when a company's lawyers interview employees about potential wrongdoing, those lawyers represent the company, not the employee — the company can waive privilege and share what was said with the DOJ; every employee must understand this before speaking
✅ Ann's practical advice: document everything, don't depend on others to protect you, and consult an ERISA attorney — the DOJ's 2016 sentencing guidelines mean individuals with knowledge of wrongdoing can be personally prosecuted, not just the company
✅ Compliance as the organizational immune system: you can tell everything about a company by whether it treats a concern raised by the compliance officer as a vaccine or an invader to be eliminated
WHY THIS MATTERS
Trust but verify — and as W. Edwards Deming put it, in God we trust, all others must bring data. For plan sponsors, this is a guide to defensive plan sponsorship. For employees watching the wrong things happen around them: the risk of not whistleblowing, of being on the wrong side of the table when someone else does, is just as real as the risk of coming forward.
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🔗 Show Notes with all mentioned links:
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00:00 Introduction
08:10 What does it mean to be a whistleblower?
09:05 What's happening in the current whistleblower case about pharma rebates?
14:24 What are the disclosure requirements, and how does this affect contracts in healthcare?
15:05 EP379 with AJ Loiacono.
15:11 The 5500 form.
15:36 EP397 with Paul Holmes.
16:46 Why having a "defensive health plan" is important.
17:31 Matt Ohrt's post about healthcare's soul.
17:42 Michelle Bernabe's post about how healthcare has lost its heart.
18:15 Why "trust and verify" is important when building contracts and relationships in healthcare.
18:42 Quote by W. Edwards Deming.
21:35 How has this case moved from state to federal court?
23:30 Whistleblower case on generic drug collusion.
24:01 What is a qui tam lawsuit?
28:08 What is an Upjohn warning and the issue of corporate Miranda rights?
30:01 What is Ann's advice to employees who might be whistleblowers?
31:41 EP438 with John Lee, MD.
33:31 What are some red flags that employees should look for to understand what kind of company they work for?
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