Life Science Compliance Update



July 2018: Life Science Compliance Update

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

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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.


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


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


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


You Say Marketing Incentive; I Say Kickback – Former Valeant and Philidor Execs Convicted of Fraud in Kickback Scheme
Carolyn Greene, Esq.
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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.


When “Free” Really Isn’t Free – A Look at the Abiomed Case
Robert N. Wilkey, Esq.
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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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