The government enforcement presentations are highly anticipated events by industry attendees at the Pharmaceutical Regulatory and Compliance Congress and Best Practices Forum (PCF). This year’s agenda included a presentation by Mary Riordan of the U.S. Department of Health and Human Services Office of Inspector General (“OIG”), followed by an assistant U.S. Attorney (AUSA) roundtable consisting of Margaret (Peg) Hutchinson (Philadelphia), Paul Kaufman (Brooklyn), Richard Robinson (Los Angeles) and Susan Winkler (Boston).
Ms. Riordan’s presentation provided an update on OIG enforcement activity over the past year, including enforcement trends related to the False Claims Act (FCA), global resolutions and OIG administrative actions. Some key highlights:
- With regard to FCA enforcement, Ms. Riordan stated that the OIG is seeing “the same kinds of issues from year to year”, including off-label promotion, kickbacks and price reporting.
- Ms. Riordan further highlighted some “other issues”, such as the recent Guidant settlement, in which the Government alleged that the company knowingly sold defective devices. Ms. Riordan stated that it is unique that this type of action was resolved as a FCA matter, highlighting that the qui tam bar is “thinking creatively” on what constitutes a false claim.
- Later in the conversation, Ms. Riordan confirmed that most FCA matters resolved in the last year have resulted from cases filed by whistleblowers.
Ms. Riordan next provided an overview of OIG reports issued in the last year, including five OIG reports related to drug reimbursement and expenditure reports. Ms. Riordan highlighted that one such report, “Medicare Could Collect Billions in Reimbursement if Pharmaceutical Manufacturers were Required to Pay Rebates for Part B Drugs“, were conducted at the request of Congress. Ms. Riordan also discussed an OIG report that was issued last week related to spinal devices supplied by physician-owner distributors (PODs), which resulted from a congressional request due to conflicts of interest concerns.
Finally, Ms. Riordan discussed a few take-away lessons. Some key points:
- A relatively large number of settlements within the last year have included kickback allegations. This is in part due to what Ms. Riordan calls a “multi-source focus”, including the involvement of some new U.S. Attorney’s Offices in these types of cases.
- Upcoming federal Sunshine reporting will provide a “tremendous increase in the scrutiny of payments to doctors.”
- Companies should conduct a “deeper analysis of speaker programs” and sampling programs; evaluate “nuanced” off-label risk areas, including research, publications, compendia and statements to the U.S. Food and Drug Administration (FDA); and drug price reporting and Medicaid rebate calculations.
With regard to corporate integrity agreements (CIAs), Ms. Riordan stated that financial incentives should be a “continued focus” for companies with regard to both executives and sales employees. Ms. Riordan confirmed that she expects financial incentives provisions seen in recent CIAs, such as the 2013 Par CIA, to be included in CIAs “going forward.” Ms. Riordan also highlighted CIA provisions related to risk assessment and mitigation programs and “meaningful monitoring” as key areas of the OIG’s focus.
A few highlights from the AUSA roundtable included the following:
- Research-related activities will be a growing area of enforcement. Such enforcement activities could include falsification of clinical trial data, suppression of negative study results, and hiding or downplaying adverse events. Ms. Winkler highlighted that there is a “confluence” between the personal injury and qui tam bars in this area, and urged companies to review adverse events to identify potential risk areas for further review.
- There will be an increase in cGMP cases moving forward, which can raise concerns related to both fraud and patient safety. The FDA will continue to engage in enforcement activity in this area as well.
- Voluntary disclosures have varying degrees of value depending on the specific facts and circumstances of the situation, including less value for matters that are potentially criminal.
- A strong compliance program is critical. This includes a knowledgeable chief compliance officer and a strong complaint line. The AUSAs discussed the importance of testing their compliance programs, such as the compliance hotline, to ensure that all areas are functional. Additionally, compliance cannot be “siloed” and must look at the overall business picture.
- Patient safety issues must be a high priority for compliance.