Skip to content

The €17 Million Drug Fraud

Post Picture

In the mid-2010s, a pharmacy business in a European country was growing so quickly that members of its accounts department later admitted they were overwhelmed. Employee numbers rose, and revenue hit a significant €50,000,000. 

Amid the chaos of this sudden growth, misconduct crept in. And it was happening on a gigantic scale. Not only did it involve the fraudulent receipt of money, but it was also literally a matter of life and death. This is an anonymised account of a true story.

The background 

One of the pharmacists, who owned the establishment, was the figurehead of this business that was bringing in vast amounts of money. But he was also acting illegally.  

Two employees had independently long harboured concerns about his methods. The company’s commercial manager and a pharmaceutical technical assistant both took their time to conduct their own investigations, uncovering the real reason behind the success of the business.   

After studying numerous receipts, invoices and prescriptions, their suspicions were confirmed. The pharmacist had been adulterating treatments over a number of years. He had reclassified expired drugs and diluted doses in what turned out to be at least 60,000 cases.  

Not only did his actions endanger the lives of his patients, with an expected 4,000 thought to have experienced harm due to the scheme, but he also defrauded health insurance companies. Having billed for the full dose, he had overcharged the firms by €17 million. This was estimated when the case went to court.  

External whistleblowing 

The whistleblowers agreed that reporting internally could lead to the pharmacist destroying vital evidence and taking retaliatory action against them. One filed a criminal report instead, and the police interviewed him and other employees. This included the other whistleblower, who was able to provide a sample of a prescription administered in the pharmacy that was found, upon investigation, to be nothing more than a saline solution and not the life-saving drug that it claimed to be.  

The pharmacist was arrested following a search of the premises and was eventually sentenced to a lengthy prison sentence. 

Retaliation by the employer

Although the whistleblowers were responsible for stopping fraudulent and dangerous activities from taking place, their employer terminated their employment without notice. The pharmacist had learned their identities when given access to the defence files and retaliated against the pair for their role in his arrest.  

It took the commercial manager four years to win compensation for his treatment, during which time he struggled to find work as a result of his actions.  

What would have happened under the EU Whistleblowing Directive?

Under the EU Whistleblowing Directive, which has now expanded its scope to include businesses employing 50 to 249 employees, the pharmacy in question would have been obliged to provide a confidential internal reporting system for whistleblowers. Any report would have been investigated by an independent, impartial person or department, with follow-up for the reporting person within three months.  

This would have given the reporting persons confidence to report internally in the first instance, as their report would have been given a fair hearing by the investigator.  

In addition, the country’s national competent authority would have been able to impose a significant sanction on the company for failing to prevent retaliation against the pair.  the-million-drug-fraud-1

Why you should encourage a speak-up culture

When a company endorses a speak-up culture, it encourages and emboldens employees to report any issues they note within the organisation. This allows businesses to tackle wrongdoing before it becomes endemic.  

Companies should embrace whistleblowers, not fear them.   

By investigating misconduct within the business, you take control of the narrative. You stamp out the problems before they become unassailable, and you dictate how to disclose information about the activity. Even if someone else exposes your issues, it is reassuring to the markets and public to admit that there has been a problem but that you have taken swift action.  

The solution is to create a whistleblowing strategy

Make sure it is as simple as possible for reporting persons to file their reports in a confidential manner so that you encourage all employees to speak up and uncover any wrongdoing within the business.  

Using an online whistleblowing platform like IntegrityLog's whistleblower software is by far the most straightforward approach. It allows confidential and, where applicable, anonymous reporting in a manner that is GDPR-compliant. For the investigating team, there is an easy-to-read dashboard of cases, with key information about deadlines for acknowledgement and follow-up clearly displayed.  

Nurturing a culture that encourages whistleblowing and supporting it with a robust strategy shows that you value reporting and are committed to preventing misconduct.  

Request a free demo of IntegrityLog or request a 14-day free trial today.  

References and further reading

Subscribe to our newsletter

Stay up to date with the latest news and products


Sign up for our newsletter

Stay up to date with the latest news and products

You have successfully subscribed!

This is your official confirmation. Thank you for joining ComplyLog Newsletter. While you wait for the next issue of ComplyLog, check out the latest articles and references.

Related articles

Post Picture

The Importance of Confidential Whistleblowing Reporting

A hospital in an EU country enlisted an IT firm to provide a whistleblowing reporting system. The solution was aimed at allowing staff members to...
Read More
Post Picture

How a Speak-Up Culture Can Prevent Reputational Damage

A European care home firm was already under investigation over the living conditions of residents and facing criminal charges from its national...
Read More
Post Picture

The Bank That Received US$2.5 Billion In Penalties

A multinational bank was subject to an investigation in both the USA and the UK over allegations that some of its employees had manipulated an...
Read More
Post Picture

The Bank That Ignored Money Laundering

A trader for a significant European bank uncovered suspicious payments being run through one of its branches in the Baltic states. The whistleblower...
Read More
All articles