Insider Information and “Original Source”

Below, Whistleblower Attorney Tony Munter answers questions about “original source” terminology and insider information.

What is an “original source?”

Answer: For many years, the False Claims Act has had a bar against filing cases based on material that was publicly disclosed. Some of the recent amendments have made the public disclosure bar a little bit less difficult to clear. One of the ways that you can clear it is by showing that the information that you’re the original source to the government of the information. It is specifically spelled out in the statute as to what an original source is. You can’t rely on information you read in the media. It can’t be information that you got as a result of an already ongoing government investigation. There are certain prohibitions.

“Original source” usually means the government isn’t aware of the information before you bring it to them, but there are exceptions to that. If you’re the person who is the source of the public information, if you’re the one who went to the press in the first place, and if you can show that, you still might be able to call yourself an original source.” You want to be able to show how you got the information, that you had some kind of direct and independent means of getting it.

The overall idea is that the government really wants information that it otherwise wouldn’t have obtained; that it wouldn’t have gotten without you going to them first. If you go to them and you can file a case, usually, you can make the claim that what you’re filing is based on your original information, therefore you will be entitled to collect.

Question: How can a piece of insider information lead to a successful federal investigation and action against a defrauder?

Answer: There have been a lot of collections and strong cases based on the pharmaceutical industry… Marketing drugs through Medicare and Medicaid is a phenomenally profitable business. Because it’s a phenomenally profitable business, for quite a while, the drug companies were actively marketing drugs in ways that made people wonder what was happening. It turned out that there were a lot of scams to market drugs illegally, by paying doctors what amounted to kickbacks to prescribe their product and by marketing drugs for uses that the Food and Drug Administration had not approved; the so-called “off-label marketing,” which is also illegal. In some instances they were marketing drugs that were not manufactured properly, drugs that were contaminated or dangerous to use, even for their supposed purpose. We’ve seen some of that as well. A whistleblower on the inside of the drug industry can tell you what is going on, and you almost have to have that. It’s difficult to get information on any type of defective product without having somebody on the inside tell you what’s really happening. Those have been more traditional and successful types of uses of the False Claims Act in that respect.

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