Life Science Compliance Update

July

2018

July 2018: Life Science Compliance Update

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Copay Assistance Lands Pfizer Another Corporate Integrity Agreement
By Kaitlin Fallon Wildoner, Esq.
Pfizer is the second company (of perhaps many) to find itself in a new corporate integrity agreement (CIA) over patient assistance programs and independent charities. The CIA entered between Pfizer and HHS-OIG, and the DOJ include some newer language and requirements centering around PAPs and give good insight into what other companies should be looking to do concerning their PAP arrangements.

July 2018 Issue Summary

July 2018 LSCU Cover

If you are looking for a theme for this month, we suggest PAIN. From the opioid crisis to patient copay assistance it seems that despite our best compliance efforts there is no shortage of programs and antics that are resulting in painful outcomes for life science companies.

Speaking of pain, we lead off this month with Katherine Norris’s article on the current swarm of legislation to address the OPIOID CRISIS that is occupying CAPITOL HILL this summer. Following that is an article chronicling CANTRELL DRUG COMPANY’S FIVE-YEAR SAGA with the FDA and now the DOJ for CGMP issues at its COMPOUNDING facility.

Next, we take a look how compliance issues can impact a potential MERGER, especially when serious allegations of non-compliance, especially involving DATA INTEGRITY, come to light after the DUE DILIGENCE process. The court documents in the FRESENIUS/AKORN case give us a rare glimpse into that world.

Moving into the more familiar territory of kickbacks and false claims, we examine the VALEANT and PHILIDOR case which resulted in CRIMINAL CONVICTIONS for executives from both a Valeant and a Philidor. Then there is the Abiomed settlement which involved using expensive meals as inducements 15 years after the PhRMA code. Finally, we wrap it up with a look at Pfizer’s most recent CORPORATE INTEGRITY AGREEMENT involving one of the latest hot button items – PATIENT ASSISTANCE PROGRAMS and INDEPENDENT COPAY CHARITIES.


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Swarming on the Opioid Crisis: Legislative Response Attacks Concerns from All Sides
Katherine Norris
Tags: ,
This is the first article in a series exploring the major themes emerging from recent legislative efforts to combat the ‘opioid crisis’ and their potential impact on drug manufacturers’ compliance programs. Currently, there is a myriad of bills before the U.S. Congress attempting to address the growing epidemic of opioid abuse, misuse, and diversion throughout the United States.

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The Sleeping Giant Awakens – Cantrell’s Consent Decree as a Study on How Not to Respond to FDA Enforcement Actions
Carolyn Greene, Esq.
Tags: , ,
Cantrell Drug Company, a 503B outsourcing facility in Little Rock, Arkansas, has been subject to multiple FDA inspections over a five-year period. Each inspection found numerous deficiencies, many in critical areas relating to the prevention of microbiological contamination and aseptic processing. Cantrell defied FDA instructions and shipped products in interstate commerce. As a result, FDA referred the matter to the DOJ, which filed a civil enforcement proceeding seeking to enjoin Cantrell from further distribution. Ultimately, Cantrell entered into a consent decree with the FDA. This case played out much more publicly than similar situations, as Cantrell executives were posting comments on Twitter about the process. Unfortunately, the tone of the comments suggested that Cantrell did not take the FDA’s supervision seriously.

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Compliance Issues Can Scuttle A Deal – The Fresenius/Akorn Acquisition Seems to be the Latest Example
Gwendolyn Ball
Tags: , ,
Compliance issues seldom take center stage in major financial deals.  However, the Fresenius/Akorn merger may be collapsing because of Akorn’s deficiencies in complying with FDA data management rules.  While it is not guaranteed that the courts will allow Fresenius to withdraw from the deal, Akorn has already suffered a very public blow to its reputation and a severe hit to its stock price.  The case illustrates how deficiencies in regulatory compliance can not only impact a firm’s relationship with regulatory agencies, but also its long-term financial and strategic planning.

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You Say Marketing Incentive; I Say Kickback – Former Valeant and Philidor Execs Convicted of Fraud in Kickback Scheme
Carolyn Greene, Esq.
Tags: , ,
Former executives of Valeant Pharmaceuticals and Philidor Rx Services, a specialty pharmacy, recently went on trial in Manhattan charged with fraud and conspiracy for allegedly engaging in a kickback scheme in which the Valeant executive encouraged Valeant to purchase an option agreement to acquire Philidor. The Philidor executive allegedly personally obtained $40 million from the deal and paid an almost $10 million kickback to the Valeant executive. Both were convicted, and each faces a potentially lengthy prison term at sentencing. In recent years, the DOJ has stepped up enforcement in holding company executives personally liable for corporate malfeasance. However, before this case, the DOJ had little success in obtaining convictions in these cases.

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When “Free” Really Isn’t Free – A Look at the Abiomed Case
Robert N. Wilkey, Esq.
Tags: , ,
In March, the United State Department of Justice (DOJ) and U.S. Attorney’s Office for the District of Massachusetts announced a $3.1 million-dollar settlement with Abiomed to resolve allegations that the company was actively using illicit marketing tactics with physicians to increase sales in a manner that violated the AKS and FCA.  Such settlement highlights that there is no such as a free lunch.

July

2018

Copay Assistance Lands Pfizer Another Corporate Integrity Agreement

Written by , Posted in Uncategorized

Kaitlin Fallon Wildoner, Esq.

Pfizer is the second company (of perhaps many) to find itself in a new corporate integrity agreement (CIA) over patient assistance programs and independent charities. The CIA entered between Pfizer and HHS-OIG, and the DOJ include some newer language and requirements centering around PAPs and give good insight into what other companies should be looking to do concerning their PAP arrangements.


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    2018

    When “Free” Really Isn’t Free – A Look at the Abiomed Case

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    Robert N. Wilkey, Esq.

    In March, the United State Department of Justice (DOJ) and U.S. Attorney’s Office for the District of Massachusetts announced a $3.1 million-dollar settlement with Abiomed to resolve allegations that the company was actively using illicit marketing tactics with physicians to increase sales in a manner that violated the AKS and FCA.  Such settlement highlights that there is no such as a free lunch.


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    July

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    You Say Marketing Incentive; I Say Kickback – Former Valeant and Philidor Execs Convicted of Fraud in Kickback Scheme

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    Carolyn Greene, Esq.

    Former executives of Valeant Pharmaceuticals and Philidor Rx Services, a specialty pharmacy, recently went on trial in Manhattan charged with fraud and conspiracy for allegedly engaging in a kickback scheme in which the Valeant executive encouraged Valeant to purchase an option agreement to acquire Philidor. The Philidor executive allegedly personally obtained $40 million from the deal and paid an almost $10 million kickback to the Valeant executive. Both were convicted, and each faces a potentially lengthy prison term at sentencing. In recent years, the DOJ has stepped up enforcement in holding company executives personally liable for corporate malfeasance. However, before this case, the DOJ had little success in obtaining convictions in these cases.


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    2018

    Compliance Issues Can Scuttle A Deal – The Fresenius/Akorn Acquisition Seems to be the Latest Example

    Written by , Posted in Uncategorized

    Gwendolyn Ball

    Compliance issues seldom take center stage in major financial deals.  However, the Fresenius/Akorn merger may be collapsing because of Akorn’s deficiencies in complying with FDA data management rules.  While it is not guaranteed that the courts will allow Fresenius to withdraw from the deal, Akorn has already suffered a very public blow to its reputation and a severe hit to its stock price.  The case illustrates how deficiencies in regulatory compliance can not only impact a firm’s relationship with regulatory agencies, but also its long-term financial and strategic planning.


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    July

    2018

    The Sleeping Giant Awakens – Cantrell’s Consent Decree as a Study on How Not to Respond to FDA Enforcement Actions

    Written by , Posted in Uncategorized

    Carolyn Greene, Esq.

    Cantrell Drug Company, a 503B outsourcing facility in Little Rock, Arkansas, has been subject to multiple FDA inspections over a five-year period. Each inspection found numerous deficiencies, many in critical areas relating to the prevention of microbiological contamination and aseptic processing. Cantrell defied FDA instructions and shipped products in interstate commerce. As a result, FDA referred the matter to the DOJ, which filed a civil enforcement proceeding seeking to enjoin Cantrell from further distribution. Ultimately, Cantrell entered into a consent decree with the FDA. This case played out much more publicly than similar situations, as Cantrell executives were posting comments on Twitter about the process. Unfortunately, the tone of the comments suggested that Cantrell did not take the FDA’s supervision seriously.


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    July

    2018

    Swarming on the Opioid Crisis: Legislative Response Attacks Concerns from All Sides

    Written by , Posted in Uncategorized

    Katherine Norris

    This is the first article in a series exploring the major themes emerging from recent legislative efforts to combat the ‘opioid crisis’ and their potential impact on drug manufacturers’ compliance programs. Currently, there is a myriad of bills before the U.S. Congress attempting to address the growing epidemic of opioid abuse, misuse, and diversion throughout the United States.


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    July

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    July

    2018

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    June

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    June

    2018

    June 2018: Life Science Compliance Update

    Written by , Posted in June 2018 LSC Update, This Month in Compliance

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    Looking Back – Reviewing OIG’S Report On The Top Management & Performance Challenges For HHS
    By Gwendolyn Ball
    Tags:
    Greg Demske’s recent keynote address at Mitchell Hamline’s Health Law Institute Symposium and the OIG’s report on the top management challenges facing HHS published in 2017 provide a remarkably consistent picture of the OIG’s focus and direction. As this article highlights there are no magic bullets to address those challenges.

    June 2018 Issue Summary

    June 2018 LSCU Cover

    As we noted last month, despite the political climate in Washington, life science compliance shows no signs of slowing down.  Here at the Update the writers and editorial staff have been busy shifting through all the developments.

    For June, we start out examining MCKESSON’S latest compliance challenge involving allegations of REPACKAGING the overfill from SINGLE-USE VIALS to improve margins but violate the FALSE CLAIMS ACT.  Later on, we take a look at the defeat of Maryland’s pharmaceutical price gouging law for violating the Commerce Clause.

    Potomac River Partners takes another look at the OIG-HCCA guidance but from a SMALLER COMPANY’S perspective, and we follow that up with OIG’s thoughts around the TOP MANAGEMENT CHALLENGES facing HHS.

    In the area of recurring themes, we take a look at OPDP’s lack of OFF-LABEL activities in 2018 and examine the continuing debate over regulating COMPOUNDING PHARMACIES from the perspective of trying to MEASURE the “PROBLEM.”


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    Everything Old is New Again – McKesson Accused of Skimming Cancer Meds in FCA Suit
    Carolyn Greene, Esq.
    Tags:
    In response to concerns about the provenance of cancer drugs its providers received from McKesson, Omni has filed an FCA suit alleging that McKesson engaged in a scheme to increase profits illegally on cancer drugs. Specifically, Omni asserts that McKesson harvested and pooled overfill from single-use vials of cancer medications. McKesson then re-packaged these cancer drugs into pre-filled syringes. By collecting the overfill, Omni alleges that McKesson increased the number of doses of the cancer medications. This practice led to adulteration of the drugs themselves, as well as the submission of fraudulent claims to various government agencies for reimbursement on these extra doses of drugs created from the overfill. This case is yet another example of the re-occurring themes of overfill harvesting and “playing the spread” in conjunction with submission of fraudulent claims to the federal government for pharmaceutical reimbursement.

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    Finding The Golden Nuggets – OIG-HCCA Recommendations For Smaller Life Science Companies
    Carla-Marie Ulerie, Eric Davis, and Jon Wilkenfeld
    Tags:
    Recently the OIG and the HCCA published a resource guide with recommendations for determining if a compliance program is effective. Since small to mid-sized pharma and medical device companies typically operate with limited compliance staff and financial resources, we identified recommendations that were relatively easy or low cost to implement but were rarely adopted. Based on our review we have determined the “golden nuggets” from that guide.

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    Maryland Loses Rx Price Gouging Law But Not The Debate
    Nicodemo (Nico) Fiorentino, Esq.
    Tags: ,
    Recently the United States Court of Appeals for the Fourth Circuit overturned Maryland’s law prohibiting price gouging for essential off–patent or generic drugs. This article highlights Maryland’s first-in-the-nation prescription drug price gouging legislation, key points to the commerce clause, and the impact the court’s ruling has on similarly proposed legislation throughout the country.

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    Where In The World Is OPDP? Where In The World Is OPDP?
    Kaitlin Fallon Wildoner, Esq. and Seth B. Whitelaw, J.D., LL.M, S.J.D.
    Tags: ,
    OPDP enforcement activities have sharply declined over the past several years. That trend continues in 2018 as OPDP has only issued one letter involving opioids and a conference booth. This article looks at the trend, reviews the most recent letter and tries to determine what this means for compliance and regulatory professionals.

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    Solving The Problems With Drug Compounding – Sparse Data And An Inconsistent Regulatory Framework Muddy The Waters
    Carolyn Greene
    Tags: ,
    At least partly in response to the 2012 fungal meningitis outbreak, Congress passed the DQSA to increase federal regulatory authority over compound pharmacies. Many states also joined in the increased FDA regulatory oversight, strengthening their quality requirements. Data on compound drug quality is limited, but the data that does exist depicts an industry with a substantial number of quality and safety problems, potentially endangering the health of millions of Americans. The compound pharmacy industry isn’t helping matters – instead, they insist that compound drugs are safe. Since the passage of the DQSA, significant improvements have been made in the quality and safety of compound drugs, but much work remains.

    June

    2018

    Solving The Problems With Drug Compounding – Sparse Data And An Inconsistent Regulatory Framework Muddy The Waters

    Written by , Posted in Uncategorized

    Carolyn Greene

    At least partly in response to the 2012 fungal meningitis outbreak, Congress passed the DQSA to increase federal regulatory authority over compound pharmacies. Many states also joined in the increased FDA regulatory oversight, strengthening their quality requirements. Data on compound drug quality is limited, but the data that does exist depicts an industry with a substantial number of quality and safety problems, potentially endangering the health of millions of Americans. The compound pharmacy industry isn’t helping matters – instead, they insist that compound drugs are safe. Since the passage of the DQSA, significant improvements have been made in the quality and safety of compound drugs, but much work remains.


       or   

    Topic tags:

    June

    2018

    Where In The World Is OPDP? Where In The World Is OPDP?

    Written by , Posted in Uncategorized

    Kaitlin Fallon Wildoner, Esq. and Seth B. Whitelaw, J.D., LL.M, S.J.D.

    OPDP enforcement activities have sharply declined over the past several years. That trend continues in 2018 as OPDP has only issued one letter involving opioids and a conference booth. This article looks at the trend, reviews the most recent letter and tries to determine what this means for compliance and regulatory professionals.


       or   

    Topic tags:

    June

    2018

    Maryland Loses Rx Price Gouging Law But Not The Debate

    Written by , Posted in Uncategorized

    Nicodemo (Nico) Fiorentino, Esq.

    Recently the United States Court of Appeals for the Fourth Circuit overturned Maryland’s law prohibiting price gouging for essential off–patent or generic drugs. This article highlights Maryland’s first-in-the-nation prescription drug price gouging legislation, key points to the commerce clause, and the impact the court’s ruling has on similarly proposed legislation throughout the country.


       or   

    Topic tags:

    June

    2018

    Looking Back – Reviewing OIG’S Report On The Top Management & Performance Challenges For HHS

    Written by , Posted in Uncategorized

    Gwendolyn Ball

    Greg Demske’s recent keynote address at Mitchell Hamline’s Health Law Institute Symposium and the OIG’s report on the top management challenges facing HHS published in 2017 provide a remarkably consistent picture of the OIG’s focus and direction. As this article highlights there are no magic bullets to address those challenges.


       or   

    Topic tags:

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