Life Science Compliance Update

September

2017

COMMENTS

0

September 2017: Life Science Compliance Update

Written by , Posted in Home page, September 2017 LSC Update, This Month in Compliance

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July 2017 LSCU Cover

Issue Summary

This month we feature an extensive, in-depth look into the drug distribution verification law in Ohio, which will significantly impact product sampling in the state. We also take a look a mid-year look at False Claims Act settlement and the recent data from U.S. DOJ’s FCPA Pilot Program. Rounding out the issue are a look at two recent FCA cases involving Fresenius and Celgene, both of which have the promise to impact how FCA cases are pursued in the future.


Feature

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Ohio Drug Distribution Verification: America’s Key Battleground State Shakes Up the Pharmaceutical Supply Chain
Nicodemo (Nico) Fiorentino, Esq., Manager, Research & Compliance, for G&M Health LLC; John Patrick Oroho, Esq., Executive Vice President and Chief Strategy Officer, Porzio Life Sciences, LLC, Principal, Porzio, Bromberg & Newman PC; Teresita Weiss, Ph.D., J.D., Sr. Vice President, Regulatory Affairs and Compliance, for J. Knipper and Company, Inc.; Bryan Andrews, Director of Sales Operations, MedPro Systems LLC.
Abstract

The pharmaceutical industry faces monumental challenges in the age of globalization within the United States: state laws and regulations that are more stringent than their federal counterparts. This article provides the historical context and current overview of Ohio’s laws, regulations, and sub-regulatory guidance concerning the distribution of prescription drugs, including drug samples, into and within the state, the verification requirements when distributing product to terminal distributors of dangerous drugs and prescribers, record retention responsibilities, and penalties for noncompliance. The article then examines the industry’s response from a major manufacturer, a distributor/third-party logistics provider, verification vendor, and compliance advisory vendors. It concludes with a call to action to the industry to form a new coalition to address state legislative and regulatory actions that have the potential to disrupt the entire supply chain.

False Claims & Enforcement

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False Claims Act Mid-Year Review: Significant Life Science Settlements, Post-Escobar Developments & Industry Round Up
John Kelly, Julia Tamulis, and Robert Platt
Abstract

Several significant False Claims Act settlements and judgments in the first six months of 2017 suggest this year will result in the eighth year of over $3 billion in FCA recoveries. Additionally, recent judicial decisions in FCA suits have further refined the test outlined in the Supreme Court’s 2016 Escobar decision, statistical sampling has resulted in significant FCA liability.

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To Disclose or Not to Disclose…. That is the Question: The DOJ’s FCPA Pilot Program – Insights from Year One and Beyond
Mark Scallon, Partner, FRA Life Sciences, Jenny McVey, Manager, FRA Life Sciences and Jimmy Ko, Senior Associate, Forensic Risk Alliance
Abstract

It has been over one-year since the US Department of Justice has launched its pilot program aimed to incentivize companies to self-report potential Foreign Corrupt Practices Act violations. Since its launch on April 5, 2016, the Justice Department resolved nine investigations. However, the question still remains – “Is the carrot bigger than the stick?” This article examines settlement trends before and during the Pilot Program to answer the question of whether or not it is sensible to self-disclose.

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Fresenius to the U.S. Government: When It Comes to the FCA, You Snooze You Lose
Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update
Abstract

In a nearly decade long lawsuit allegations that the company violated the False Claims Act by conducting and then billing the government for medically unnecessary hepatitis B tests, Fresenius is now seeking to challenge that the government is time-barred because the government took too long to intervene in this case. Although the Court has yet to decide the challenge by Fresenius, the outcome of that decision will likely have a significant impact on future government decisions to intervene in False Claim Act cases.

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Taking Center Stage – Washington State’s Medicaid Fraud Control Unit, the False Claims Act and Celegene
Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update
Abstract

On July 26, 2017, the Washington State Attorney General Bob Ferguson announced one of the State’s largest recoveries against the pharmaceutical company Celgene for allegations involving violations of the Medicaid False Claims Act, in particular claims related to the company’s off-label marketing, fraudulent billing and providing kickbacks to doctors. The Washington State AG recovery represents a pivotal point in life science compliance, where State AGs, are actively seeking recoveries against companies that violate state and federal Medicare programs.

September

2017

COMMENTS

0

Taking Center Stage – Washington State’s Medicaid Fraud Control Unit, the False Claims Act and Celegene

Written by , Posted in False Claims

Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update

On July 26, 2017, the Washington State Attorney General Bob Ferguson announced one of the State’s largest recoveries against the pharmaceutical company Celgene for allegations involving violations of the Medicaid False Claims Act, in particular claims related to the company’s off-label marketing, fraudulent billing and providing kickbacks to doctors. The Washington State AG recovery represents a pivotal point in life science compliance, where State AGs, are actively seeking recoveries against companies that violate state and federal Medicare programs.

September

2017

COMMENTS

0

Fresenius to the U.S. Government: When It Comes to the FCA, You Snooze You Lose

Written by , Posted in False Claims

Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update

In a nearly decade long lawsuit allegations that the company violated the False Claims Act by conducting and then billing the government for medically unnecessary hepatitis B tests, Fresenius is now seeking to challenge that the government is time-barred because the government took too long to intervene in this case. Although the Court has yet to decide the challenge by Fresenius, the outcome of that decision will likely have a significant impact on future government decisions to intervene in False Claim Act cases.

September

2017

COMMENTS

0

To Disclose or Not to Disclose…. That is the Question: The DOJ’s FCPA Pilot Program – Insights from Year One and Beyond

Written by , Posted in False Claims

Mark Scallon, Partner, FRA Life Sciences, Jenny McVey, Manager, FRA Life Sciences and Jimmy Ko, Senior Associate, Forensic Risk Alliance

It has been over one-year since the US Department of Justice has launched its pilot program aimed to incentivize companies to self-report potential Foreign Corrupt Practices Act violations. Since its launch on April 5, 2016, the Justice Department resolved nine investigations. However, the question still remains – “Is the carrot bigger than the stick?” This article examines settlement trends before and during the Pilot Program to answer the question of whether or not it is sensible to self-disclose.

September

2017

COMMENTS

0

False Claims Act Mid-Year Review: Significant Life Science Settlements, Post-Escobar Developments & Industry Round Up

Written by , Posted in False Claims

John Kelly, Julia Tamulis, and Robert Platt

Several significant False Claims Act settlements and judgments in the first six months of 2017 suggest this year will result in the eighth year of over $3 billion in FCA recoveries. Additionally, recent judicial decisions in FCA suits have further refined the test outlined in the Supreme Court’s 2016 Escobar decision, statistical sampling has resulted in significant FCA liability.

September

2017

COMMENTS

0

Ohio Drug Distribution Verification: America’s Key Battleground State Shakes Up the Pharmaceutical Supply Chain

Written by , Posted in Feature Article

Nicodemo (Nico) Fiorentino, Esq., Manager, Research & Compliance, for G&M Health LLC; John Patrick Oroho, Esq., Executive Vice President and Chief Strategy Officer, Porzio Life Sciences, LLC, Principal, Porzio, Bromberg & Newman PC; Teresita Weiss, Ph.D., J.D., Sr. Vice President, Regulatory Affairs and Compliance, for J. Knipper and Company, Inc.; Bryan Andrews, Director of Sales Operations, MedPro Systems LLC.

The pharmaceutical industry faces monumental challenges in the age of globalization within the United States: state laws and regulations that are more stringent than their federal counterparts. This article provides the historical context and current overview of Ohio’s laws, regulations, and sub-regulatory guidance concerning the distribution of prescription drugs, including drug samples, into and within the state, the verification requirements when distributing product to terminal distributors of dangerous drugs and prescribers, record retention responsibilities, and penalties for noncompliance. The article then examines the industry’s response from a major manufacturer, a distributor/third-party logistics provider, verification vendor, and compliance advisory vendors. It concludes with a call to action to the industry to form a new coalition to address state legislative and regulatory actions that have the potential to disrupt the entire supply chain.

August

2017

COMMENTS

0

This Isn’t Walmart: The Supreme Court Narrows Forum-Shopping Options

Written by , Posted in Tort Reform

Kaitlin Fallon Wildoner, Esq., Senior Staff Writer, Life Science Compliance Update

In a decision of great import to pharmaceutical and device companies, the Supreme Court ruled in favor of Bristol-Myers Squibb in a jurisdictional argument at the nation’s Highest Court. This article outlines the background, the case decision, and the decision’s ramifications to companies.

August

2017

COMMENTS

0

The Fine Art of Policy Management

Written by , Posted in Uncategorized

Matt Kelly, Editor & CEO at Radical Compliance

Management of corporate policies is a primary challenge for compliance officers in today’s life sciences sector. Recent guidance from the Justice Department and OIG-HHS about effective compliance programs does elaborate on what a strong policy management program should do. In this article, we examine five basic abilities that all policy management programs should have—things that your program must be able to do, regardless of your organization’s specific structure and processes, if you want an effective program that can endure in today’s highly regulated environment.

August

2017

COMMENTS

0

Independent Review Organizations (“IRO”) and Conflicts of Interest – Much Ado About Nothing or a Serious Problem

Written by , Posted in Compliance Operations

Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update

As part of the process of entering into civil and criminal settlement negotiations with the government resulting from allegations of noncompliance, life science companies are increasingly seeking the retention of third-party regulatory compliance and auditing companies, designated collectively as independent review organizations (“IROs”) to facilitate such process. Recently, there is renewed skepticism and heightened criticism over the companies’ use of such IROs, especially given revelations that companies are choosing IROs that they may have had business relationships with in the past or present. Despite this, the U.S. Department of Justice (“DOJ”) and other government oversight agencies argue that the current status quo is effectively working, including the already established standards, qualifications, and other guidelines for the selection of an IRO. This article examines the various view points and what it means for the life science compliance professional.

August

2017

COMMENTS

0

A New Application of Escobar: Gilead or When Half-Truths Can Become Actionable Under the FCA

Written by , Posted in False Claims

Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update

On July 7, 2017, the Ninth Circuit in a very closely watched opinion determined that the whistleblowers in this case had demonstrated viable claims under the False Claims Act (“FCA”), alleging that their employer, Gilead Sciences, Inc. (“Gilead”) had made false statements to the U.S. Food and Drug Administration (“FDA”) regarding its HIV drug, resulting in billions of dollars of illicit payments from the government to Gilead. Such judicial decision is highly significant in that it is the first substantive Circuit Court decision since the U.S. Supreme Court decision in Universal Health Care v. Escobar, which effectively raised the legal burden by whistleblowers to demonstrate claims under the FCA.

August

2017

COMMENTS

0

Arizona to Allow Pharma Companies to Legally Communicate Off-Label Treatment Options

Written by , Posted in Feature Article

Kaitlin Fallon Wildoner, Esq., Senior Staff Writer, Life Science Compliance Update

Arizona was the first state to bite the bullet and allow pharmaceutical companies to communicate off-label uses of their drugs to physicians and other healthcare professionals. This article not only discusses the Arizona bill but also outlines some factors that may help us to understand where the landscape is heading on this issue.

August

2017

COMMENTS

0

Off-Label Bills Garner Minimal Traction in Congress

Written by , Posted in Feature Article

Kaitlin Fallon Wildoner, Esq., Senior Staff Writer, Life Science Compliance Update

Further muddying the off-label waters is the fact that Congress has introduced several bills, attempting to legislate off-label use. Both bills were initially introduced as attachments to the FDA reauthorization bill, but when House Democrats resisted, both sponsors pulled the bills as attachments. On July 12, 2017, the Subcommittee on Health held a brief hearing on both bills, giving industry and others a chance to speak on off-label promotion.

August

2017

COMMENTS

0

August 2017: Life Science Compliance Update

Written by , Posted in August 2017 LSC Update, This Month in Compliance

The full text of this issue is available to our subscribers. If you are a subscriber please log in now. If you are not a subscriber, and would like to become one, please click on the subscribe link or read about all of the benefits a subscription brings by clicking on the Subscribe menu item above.

August 2017 LSCU Cover

Issue Summary

Welcome to the Dog Days of Summer! This month we focus once more on off-label promotion, with a special three-part series. We also take a look at recent developments involving the Escobar case and the latest from the U.S. Supreme Court on products liability/mass tort jurisdiction. Finally, we have an article from Matt Kelly on the Fine Art of Policy Management.


LSCU Special Feature

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A Murky Future for Off-label Promotion

Within the world of life science product regulation, the area of off-label promotion is perhaps the most complicated, emotional and uncertain of all. It is an ever-changing landscape of regulations, court decisions and now politics. It is a landscape that the LSCU has covered in many issues, and once more it is making headlines. This three-part series will explore the impact that the new FDA Commissioner will have on the debate, how Congressional efforts could make things even more complicated for life science compliance professionals, and the latest efforts by Arizona to allow off-label promotion. – Dr. Seth Whitelaw, Editor

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PART 1: New Leadership at the FDA Brings Change
Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update
Abstract

On May 11, 2017, Dr. Scott Gottlieb was sworn in as the U.S. Food and Drug Administration’s latest Commissioner. Since that time, there has already been various regulatory changes and shifts, in terms of policy guidance, as well as a new focus toward easing the Agency’s rules and regulations pertaining to off-label uses. The article will explore those changes and the Agency continues to refine the “intended use” rules.

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PART 2: Off-Label Bills Garner Minimal Traction in Congress
Kaitlin Fallon Wildoner, Esq., Senior Staff Writer, Life Science Compliance Update
Abstract

Further muddying the off-label waters is the fact that Congress has introduced several bills, attempting to legislate off-label use. Both bills were initially introduced as attachments to the FDA reauthorization bill, but when House Democrats resisted, both sponsors pulled the bills as attachments. On July 12, 2017, the Subcommittee on Health held a brief hearing on both bills, giving industry and others a chance to speak on off-label promotion.

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PART 3: States vs. FDA – Arizona to Allow Pharma Companies to Legally Communicate Off-Label Treatment Options
Kaitlin Fallon Wildoner, Esq., Senior Staff Writer, Life Science Compliance Update
Abstract

Arizona was the first state to bite the bullet and allow pharmaceutical companies to communicate off-label uses of their drugs to physicians and other healthcare professionals. This article not only discusses the Arizona bill but also outlines some factors that may help us to understand where the landscape is heading on this issue.

False Claims

Arrow

A New Application of Escobar: Gilead or When Half-Truths Can Become Actionable Under the FCA
Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update
Abstract

On July 7, 2017, the Ninth Circuit in a very closely watched opinion determined that the whistleblowers in this case had demonstrated viable claims under the False Claims Act (“FCA”), alleging that their employer, Gilead Sciences, Inc. (“Gilead”) had made false statements to the U.S. Food and Drug Administration (“FDA”) regarding its HIV drug, resulting in billions of dollars of illicit payments from the government to Gilead. Such judicial decision is highly significant in that it is the first substantive Circuit Court decision since the U.S. Supreme Court decision in Universal Health Care v. Escobar, which effectively raised the legal burden by whistleblowers to demonstrate claims under the FCA.

Compliance Operations

Arrow

Independent Review Organizations (“IRO”) and Conflicts of Interest – Much Ado About Nothing or a Serious Problem
Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update
Abstract

As part of the process of entering into civil and criminal settlement negotiations with the government resulting from allegations of noncompliance, life science companies are increasingly seeking the retention of third-party regulatory compliance and auditing companies, designated collectively as independent review organizations (“IROs”) to facilitate such process. Recently, there is renewed skepticism and heightened criticism over the companies’ use of such IROs, especially given revelations that companies are choosing IROs that they may have had business relationships with in the past or present. Despite this, the U.S. Department of Justice (“DOJ”) and other government oversight agencies argue that the current status quo is effectively working, including the already established standards, qualifications, and other guidelines for the selection of an IRO. This article examines the various view points and what it means for the life science compliance professional.

Arrow

The Fine Art of Policy Management
Matt Kelly, Editor & CEO at Radical Compliance
Abstract

Management of corporate policies is a primary challenge for compliance officers in today’s life sciences sector. Recent guidance from the Justice Department and OIG-HHS about effective compliance programs does elaborate on what a strong policy management program should do. In this article, we examine five basic abilities that all policy management programs should have—things that your program must be able to do, regardless of your organization’s specific structure and processes, if you want an effective program that can endure in today’s highly regulated environment.

Tort Reform

Arrow

This Isn’t Walmart: The Supreme Court Narrows Forum-Shopping Options
Kaitlin Fallon Wildoner, Esq., Senior Staff Writer, Life Science Compliance Update
Abstract

In a decision of great import to pharmaceutical and device companies, the Supreme Court ruled in favor of Bristol-Myers Squibb in a jurisdictional argument at the nation’s Highest Court. This article outlines the background, the case decision, and the decision’s ramifications to companies.

August

2017

COMMENTS

0

New Leadership at the FDA Brings Change

Written by , Posted in Feature Article

Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update

On May 11, 2017, Dr. Scott Gottlieb was sworn in as the U.S. Food and Drug Administration’s latest Commissioner. Since that time, there has already been various regulatory changes and shifts, in terms of policy guidance, as well as a new focus toward easing the Agency’s rules and regulations pertaining to off-label uses. The article will explore those changes and the Agency continues to refine the “intended use” rules.

July

2017

COMMENTS

0

July 2017: Life Science Compliance Update

Written by , Posted in July 2017 LSC Update, This Month in Compliance

The full text of this issue is available to our subscribers. If you are a subscriber please log in now. If you are not a subscriber, and would like to become one, please click on the subscribe link or read about all of the benefits a subscription brings by clicking on the Subscribe menu item above.

July 2017 LSCU Cover

Issue Summary

For the July issue, we have focused compliance program effectiveness. Our feature this month explores compliance resourcing challenges for small to mid-sized pharmaceutical companies. We follow this up with a detailed review of the new DOJ and OIG guidance documents. We also take a hard look at project pricing and how the current legal and regulatory structure may impinge on efforts to reduce costs. Finally, we take a look at the latest developments in transparency and false claims enforcement.


Feature

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This is Not Your Parent’s Compliance Program – The New Era of Compliance Resourcing at Small to Mid-Size Pharmaceutical Companies
Patrik Florencio, Esq., Steven Franchetti, Seth Whitelaw, J.D., LL.M., S.J.D.
Abstract

At the 14th Annual CBI Pharmaceutical Compliance Congress held in April 2017, almost half the attendees were from small to mid-sized companies that generate $3 billion or less in annual revenue. At the same time, the compliance burdens for all pharmaceutical companies continue to increase. This article explores the output of industry experts in attendance at CBI’s small to mid-sized breakout regarding the need for minimum compliance program resources as well as survey data showing that certain companies are funding their compliance programs in line with these needed minimum resources.

Compliance Operations

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Effectiveness, The Holy Grail of Compliance – Both the DOJ & OIG Weigh In
Sally Foroughi, Staff Writer, Life Science Compliance Update and Kaitlin Fallon Wildoner, Esq., Senior Staff Writer, Life Science Compliance Update
Abstract

Measuring the effectiveness of compliance programs is no easy task since governing agencies have not published a template that will work in all cases; compliance measurements are unique to each company’s size, operations, resources and risks factors. Although there is no “one size fits all” program, both the DOJ and the OIG (in conjunction with the Health Care Compliance Association (“HCCA”)) recently issued guidelines and recommendations for healthcare organizations to design, implement, evaluate and improve their compliance programs. Unfortunately, this may have been done in a vacuum as neither agency appeared to have consulted with one another. There are similarities, differences, and ambiguities between the two agencies’ point of views. This article serves to compare and contrast the compliance guidelines as set forth by the DOJ and OIG within weeks of each other.

Transparency

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The California Hurdle – SB 790 and Pharma
Jenny McVey, Life Sciences Manager, FRA
Abstract

Seven states and the District of Columbia currently have regulations that limit or ban industry gifts to physicians, and it seems as though others are following suit. The California state Senate passed SB 790 in May 2017, a bill restricting pharmaceutical companies from giving gifts and incentives to medical professionals. This article reviews the changes SB 790 calls for, and what compliance professionals should keep an eye on.

Pricing

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LSCU SPECIAL FEATURE: Into the Nexus – Anti-Kickback Statute (“AKS”) versus Value-Driven Health Care
Abstract

As health care reform continues to be a hot topic, there is discussion occurring regarding whether regulatory and compliance laws such as the Anti-Kickback Statute (“AKS”) are antiquated, outdated, and also require modernization, with a focus on improving patient outcomes and reducing overall healthcare costs. As such, the premise remains that the current legal framework is not necessarily compatible with transforming the health care delivery system, and needs to be revamped while still serving to provide substantive protections against fraud and abuse. This two-part series explores the landscape and recent developments in this area.

Part 1: An Uncertain Future in a Dynamic Landscape
By Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update

Part 2: The Tension Increases – Online Auctions Violate the AKS
By Calisha D. Myers, Esq., Staff Writer and Dr. Seth B. Whitelaw, Editor, Life Science Compliance Update

False Claims

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Pharmaceutical and Device Manufacturers: Buyer Seller Beware
John Kelly, Matt Curley and Rob Platt
Abstract

Pharmaceutical and medical device manufacturers continue to face intense scrutiny from regulatory and enforcement agencies, as well as whistleblowers seeking large payouts for disclosing potential wrongdoing. There are a number of risk areas (some new, some not-so-new) that provide the basis for the government and relators to pursue alleged violations of the False Claims Act liability. Some of those areas are discussed below.

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Punting on the Issue of FCA and Statistical Sampling
Robert N. Wilkey, Esq., Staff Writer for Life Science Compliance Update
Abstract

In a much-anticipated U.S. Court of Appeals decision, the Fourth Circuit on February 14, 2017, in evaluating the issue of whether the government has veto power over False Claims Act (FCA) settlements, particularly where liability is established by use of statistical sampling, opted to forego rendering a decision on such issue, and leaving wide open the use and appropriateness of statistical sampling in FCA related cases

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