Money not major incentive for whistle-blowers-study

* Reporting drug violations carries burden

* Lives, finances usually disrupted

* Better support system needed for informants

By Gene Emery

BOSTON, May 12 (Reuters) - A compulsion to do the right thing and not money is the primary motivation when drug company employees report fraudulent activity to the government, a new study of whistle-blowers has concluded.

But the resulting strain on personal and professional lives may make people with legitimate evidence of fraud reluctant to come forward, the researchers reported in the New England Journal of Medicine.

"The whistle-blowers need more support in the process of bringing the case forward," Dr. Aaron Kesselheim of Brigham and Women's Hospital in Boston said in a telephone interview.

The study offers insight into what happens when whistle-blowers sue their companies under the "qui tam" litigation process, in which an individual goes to court and the federal government intervenes if it finds evidence of illegal activity.

If the case results in a settlement, the whistle-blower gets part of the award.

During the five years it typically takes to settle a case, people who report abuse often find themselves unable to get another job and feel left in the dark as the federal government investigates the allegations.

Kesselheim and his colleagues looked at 17 cases of pharmaceutical whistle-blowing since 2001. The largest was last year's $1.4 billion settlement in which Eli Lilly and Co. (LLY.N) was accused of improperly marketing its antipsychotic drug Zyprexa to children and elderly patients, and failing to provide information about the drug's side effects.

The researchers interviewed 26 whistle-blowers involved in those cases.

Kesselheim said he was surprised that the potential of a million-dollar financial settlement played such a small role in their decision to go forward.

MONEY NOT MAIN MOTIVATION

None said it was their primary motivation.

"They seemed to want to right a wrong, or bring to light something that was ethically compromised," he said.

"I think this drug kind of scared me. I didn't want to be responsible for someone dying," one whistle-blower is quoted as saying in the Kesselheim report.

"In the end they were pushing me to break some more laws," said another.

The whistle-blowers usually discovered the illegal practice when they moved to a new company or when they were promoted to a new position. Most tried to stop the practice by talking to superiors or filing a complaint. They were often told to just follow orders.

For many, the probe took a personal toll, the study found. "For at least eight insiders, the financial consequences were reportedly devastating," Kesselheim wrote.

The problems included divorce, family conflicts and stress-related health problems such as panic attacks, insomnia and asthma.

Most ended up leaving the pharmaceutical industry.

After taxes and attorney's fees, seven whistle-blowers received more than $5 million, five got less than $1 million and 13 got something in between.

"The prevailing sentiment was that the payoff had not been worth the personal cost," Kesselheim and his colleagues concluded.

(Editing by Maggie Fox and Cynthia Osterman)