Coronavirus (COVID-19), SARS, MERS, Ebola… Before a new virus even reaches the pandemic level, healthcare professionals and scientists around the world work collaboratively to develop cures, treatments, and vaccines. They also work to better understand how the disease evolved and is spread. For the most part, when disasters strike, everyone shares information even if there are delays at times. Unfortunately, there are always a few greedy individuals looking to make a quick buck at the expense of public health and human lives.
Three weeks ago, Bright Gene Bio-Medical Technology Co., a Chinese pharmaceutical company, announced that it had successfully manufactured the API of remdesivir, a drug being tested in China to treat the 2019 novel coronavirus. Their stock took off like a rocket, and the public was relieved that a treatment for the deadly new virus was on the horizon.
In a statement recently released through the Shanghai Stock Exchange, exchange officials said: “[BrightGene] actively responded to the national call to fight the new coronavirus (2019-nCoV) epidemic, and recently successfully developed and synthesized the technology and preparations for the drug synthesis of [remdesivir] technology.”
Now we are learning that those statements appear false.
The Shanghai Stock Exchange just announced that it had censured Bright gene Bio-Medical for disclosing inaccurate information. The exchange says the company didn’t have approval from China’s drug regulator to make remdesivir, it wasn’t licensed by the drug’s patent owner, Gilead Science, and didn’t even have the “relevant qualifications” for mass production.
After the censure by the stock exchange, the company’s stock price tanked.
Hundreds of clinical trials are underway to find an effective coronavirus treatment. We are confident that such a treatment – and a vaccination too – are just around the corner. That doesn’t give anyone the right to raise false hopes or rip off investors, however.
Reporting False Claims of Cures and Vaccines
As pharmaceutical professionals, we all have a duty to communicate accurate information. As COVID-19 fears spread, it is especially important not to engage in rumors or give the public false hope.
There isn’t much we can do to stop irrational fears. An example of that is a few uninformed people who might believe Corona beer is somehow tied to coronavirus. What we can do, however, is report companies that lie in clinical trials or make false claims of a cure or vaccine.
The latest pandemic scare could be the ticket to improving pharma’s reputation in the United States. Instead of being villains, pharmaceutical companies have the opportunity to be heroes. If more companies take the apparent path of Bright Gene, however, our industry’s reputation will be further tarnished. That would be a shame since rank and file pharmaceutical industry workers do their best every day to save lives and eliminate suffering.
COVID 19 presents many opportunities. It is important, however, not to make false promises or oversell to generate short term profits. That means it is critical to report anyone making false statements in clinical trials or misleading the public and the FDA.
If a company does business in the United States, one can report any such misconduct directly to the FDA.
If the company is publicly traded or registered with the Securities and Exchange Commission (“SEC”), cash whistleblower rewards may be available from the U.S. government. It’s not the FDA that hands out whistleblower reward checks; it is the SEC.
The SEC has recently been involved in several high profile pharmaceutical cases involving violations of the Foreign Corrupt Practices Act. That law prevents pharmaceutical companies from bribing foreign government officials in exchange for favorable treatment. For example, if you bribe a government official in India to get your drug approved, the U.S. SEC can prosecute you (assuming you are a public company).
The SEC’s jurisdiction doesn’t begin and end with foreign bribery. Any material misleading product claims or false books and records can lead to a huge SEC fine. We believe that lying about a treatment for novel coronavirus or falsely suggesting you have begun commercial production of the treatment is very material. (Proof of just how material these false claims can be found in Bright Gene’s meteoric 60% stock increase.)
Examples of recent SEC pharmaceutical prosecutions include Teva Pharmaceutical’s $236 million (USD) fine for bribing Russian officials to increase sales of Teva’s multiple-sclerosis drug. (The U.S. Justice Department also levied huge fines against the company). An example of the SEC taking action in false claims cases is the recent case where a small U.S. biopharmaceutical company paid a $4.1 million fine for lying about how many patients were buying its products.
By reporting fraud or material misstatements to the SEC, you become eligible to receive a cash reward of between 10% and 30% of whatever the agency recovers from the company. In Teva’s case, that could be an award of almost $71 million! More importantly, by quickly reporting fraud, we are protecting patients and protecting the integrity of the pharmaceutical industry. To learn more, visit our pharmaceutical financial fraud information page.
If you suspect your pharmaceutical employer or other company is concealing material facts in a clinical trial, has lied about adverse events or is making false claims to the public or investors, contact us confidentially by emailing us at [hidden email] or call us at 202.780.9957.
We connect potential whistleblowers with the necessary experts and qualified, experienced lawyers required to maximize cash awards and protection from retaliation. There is no fee for our services. The Pharmaceutical Integrity Coalition (PIC) is an independent Advocacy Group, with no ties to the Pharma industry.