Novartis Hit with $1.5M Whistleblower Suit, Avoids Punitive Damages
A New Jersey state jury hit Novartis Pharmaceuticals Corp with nearly $1.5 million in net damages over a former company executive’s claims that she was fired in retaliation for whistleblowing. The jury, in turn, rejected the pharma company’s stance that the employee had been properly terminated for violating company policies.
In a 7-1 votes, the jury awarded $1,816,040 to Min Amy Guo in her whistleblower suit, in which she alleged that she was fired from Novartis for raising concerns in 2012 that a potential cancer drug study for Afinitor by the pharmaceutical distribution company McKesson Corp was possibly a kickback to McKesson to help sell the medicine.
The jurors mostly sided with Guo on her state Conscientious Employee Protection Act claim, awarding her the $1.8 million, but then unanimously awarded $345,360.70 to Novartis on the company’s counterclaim of unjust enrichment. This second verdict was based in part on the jury’s finding that Guo had violated company policy as Novartis alleged.
The following day, the eight jury panel in a 7-1 vote decided against awarding punitive damages to Guo, finding that Novartis upper management did not engage in “especially egregious” conduct in connection with her termination.
Guo served as executive director of the health economics and outcomes research group at Novartis until she was terminated in 2013. The next year, she filed a lawsuit under the Conscientious Employee Protection Act, which is a law in New Jersey which prohibits all public and private employers from retaliating against who “disclose, object to, or refuse to participate in certain actions that the employees reasonably believe are either illegal or in violation of public policy.”
Guo alleged that she believed that the proposed McKesson study, which was meant to examine the use of Afinitor as a breast cancer drug, would violate a corporate integrity agreement that Novartis entered into in 2010 as part of a settlement with the U.S. Department of Justice. The agreement required Novartis to comply with federal health care program requirements, which included an anti-kickback statute.
McKesson had acquired U.S. Oncology Inc. in 2010, which is one of the largest networks of community-based oncologists in the country. The head of North America oncology at Novartis, Christi Shaw, had been pushing to get the study done in time for the launch of Afinitor as a breast cancer drug, but Guo alleged that her whistleblowing had slowed down that process enough that the study missed the launch, which in turn lead to the retaliation and her firing.
Guo stated that she believed that she had an “objectively reasonable belief” that the initial proposal would violate the corporate integrity agreement and the anti-kickback statute. After Guo objected to the proposal on both “procedural and substantive grounds,” the study proposal was ultimately revised.
Not long after Guo engaged in whistleblowing, Novartis started an investigation that ultimately led to her termination at the company. An economist later testified that Guo had suffered economic losses totaling approximately $5.3 million dollars.
Novartis disagreed with the whistleblower verdict, asserting that Guo “was terminated for legitimate, nondiscriminatory business reasons, including her violation of company policy.”
According to court documents, Guo’s alleged violations at the company described that she had failed to include a representative from Novartis’ legal or ethics compliance departments on a call with a vendor and the vendor’s counsel after her staff members had raised compliance concerns. In addition, she had allegedly failed to disclose a potential conflict of interest with respect to her position at the company on an advisory council of a support organization for cancer survivors, and she did not recuse herself from the review of a proposed study that involved that aforementioned organization.