DOJ

Compliance News in Review, March 8, 2016

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A bill is introduced in the Senate to end DTC advertising, Endo settles with New York over alleged marketing violations, and Olympus settles multiple False Claims Act, Anti0kickback, and FCPA charges.

March has certainly roared in like a lion, but will it go out like a lamb? Or will it go out more like a Blue Devil, a Jayhawk, a Cardinal, or a Wolverine? March Madness is almost here, so rise up bracketologists! Whether you employ a highly-scientific method for filling out your brackets, or you make your picks based on which team colors, it’s time to put pen to paper (or fingers to keyboard) and make you selections official. Before you get completely engrossed in what sixteen seed might have a shot at the huge upset in the first round, let’s take a look at what has dribbled through the newswires lately, as we tip off on this edition of the Compliance News in Review.

Senator Al Franken is the latest to join the “Ban DTC Advertising” team. The Senator has introduced a bill that would end the DTC advertising tax break for drug companies. Franken argues the costs of the ads are increasing the costs of drugs, and they encourage consumers to seek new, expensive medications, over cheaper alternatives. A spokesperson for PhRMA said the legislation “ignores the value of information patients about their health care and treatment options,” and it may have the unintended consequence of a patient not seeking medical attention for chronic conditions that can be managed more cost effectively when treatment begins early.

Endo has resolved a marketing foul with the state of New York. The company reached a settlement with the State over its marketing of an opioid pain medication. According to the state’s Attorney General, Endo claimed its painkiller, Opana ER, was crush resistant and it underplayed the addictive nature of the drug. The AG said the misleading marketing led to increased sales of the drug because it created a “false sense of security.” The company agreed to pay $200,000 and to cease marketing the drug as crush resistant. Additionally, Endo must create a program to keep its sales team from promoting the drug to healthcare providers who may be prescribing it in an abusive manner.

Olympus Corporation of the Americas (OCA), has agreed to pay $646 million to settle criminal and civil charges related to violations of the False Claims Act, the federal Anti-kickback Statue and the FCPA. The endoscope maker was accused of paying kickbacks in the form of consulting payments; free endoscopes; travel; meals; and grants. The company will pay $312 million to settle charges of paying kickbacks and $310 million to resolve the False Claims Act charges. The company’s Latin American subsidiary is accused of making payments to healthcare providers working in government-owned hospitals in Central and South America in order to secure business. The company will pay $22.4 million to resolve charges it violated the FCPA and it has entered into a three year Deferred Prosecution Agreement (DPA) and a Corporate Integrity Agreement (CIA). The DPA requires the establishment of a confidential hotline, improvements to the compliance training and the establishment of a program to recoup executive performance pay for those who participate in misconduct or fail to promote compliance. The CIA requirements include the implementation of a healthcare code of conduct; specific training and education; and requirements around grants and charitable contributions, consulting arrangements, and travel expenses.

The DOJ noted in its press release about the Olympus settlement that “the criminal complaint alleges that the improper payments happened while Olympus lacked training and compliance programs.” A “subpar compliance program,” was also noted by prosecutors in the recent SciClone FCPA case and the Sweett Group UK Bribery Act case. Regular and effective training is a key element of any effective compliance program, and helps reduce the risk of violations. While laws such as the False Claims Act of the FCPA may not change often, training on these laws cannot be conducted in a “one and done” manner. It should be reviewed and refreshed regularly, and highlight real-world examples applicable to the industry to keep it relevant and fresh.

With that, the buzzer has sounded on this edition of the Compliance News in Review. If you have a rooting interest, good luck to your team(s) in the upcoming tournament.

Stay compliant and we’ll see you right back here for the next edition

Compliance News in Review, February 23, 2016

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Did you feel the awakening? It was as if a million voices cried out in joy, then were suddenly, silently going about their business again. Geekerati rejoice! The Star Wars: Episode VII video announcing the beginning of production on the next installment has been released. December 15, 2017 can’t get here fast enough! We’ll have to wait to learn about what happens in that galaxy far, far away, but in the meantime, we can at least keep up with the recent news from the compliance universe, with this edition of the Compliance News in Review.

Do you have questions about this year’s Open Payments submission? There’s no need to seek answers using the Force while CMS is around. The agency held a webinar to discuss this year’s submission and take questions from stakeholders. CMS presented an overview of enhancements to the system and the timeline for submissions before taking questions. Those questions focused on reporting requirements, the dispute process, and the deletion of records.

UK government officials are launching an “urgent investigation” (hopefully not urgent enough to break out the mind probe) into the possibility that National Health Service (NHS) officials received consulting payments from pharmaceutical companies. The investigation is based on a report by the Telegraph that more than 130 NHS officials, most in positions to assess what medications would be used by patients, were receiving the payments. The payments were allegedly provided to the NHS workers in return for serving on advisory boards. Activities related to the advisory boards ranged from participation in teleconferences to travel to meetings outside the UK, where the participants stayed at luxury hotels.

Negotiations in the Amarin case are moving slower than a space slug. The FDA and Amarin have requested a third extension in the process as they look to reach a settlement in the case involving the off-label promotion of Amarin’s omega-3 drug. The extension will delay the court proceedings until March 18.

Pfizer has reached an agreement in principle with the federal government in a False Claims Act case involving the calculation of Medicaid rebates for the drug Protonix. The product was marketed by Pfizer’s Wyeth unit. The company will pay $784.6 million to resolve the charges, and will not admit any liability in the case.

The Jedi Master of the Serious Fraud Office (SFO) will remain in his post a bit longer than planned. The UK’s Attorney General extended the contract of SFO head, David Green, for two years. Green’s contract was set to expire in April, and now will expire in April of 2018.

France could be joining the Alliance of countries beefing up their anti-corruption laws. Draft legislation of an anti-corruption law will be presented to the French State Council for validation, and will then move on to the legislative process. The French Parliament is expected to begin its review in April of this year. Highlights of the draft include the creation of anti-corruption agency with the power to impose sanctions; a requirement mandating corporations have a compliance function in place; and the implementation of a number of Sunshine requirements, most notably the disclosure of payments to lobbyists.

Anticorruption efforts by government agencies have certainly been a hot topic of late. From the announcement that the FBI would be hiring additional FCPA investigatory staff, to the SciClone settlement, and the news of a new law on the horizon in France, governments around the world are taking steps to root out bribery and corruption. That’s why now is as good a time as any to review your company’s current anticorruption program, including the training that addresses anticorruption laws. For multinational companies, training on the FCPA alone is not enough. The UK Bribery Act is just as far reaching, and your colleagues need to understand the differences in the two laws. In addition, both Mexico and Brazil have implemented tougher anticorruption laws in the last several years, and training should be provided on those as well.

Thanks for reading everyone, and may the Force be with your compliance training efforts.

Compliance News in Review, February 15, 2016

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Ah, l’amour! It is the stuff of literature, song, poetry, and this time of year, greeting cards galore. Some might refer to Valentine’s Day as a “Hallmark Holiday,” but any day that makes the consumption of chocolate practically mandatory is okay by us. Valentine’s Day…a day to do something special for that special someone and/or the special people in your life. While it may not be as exciting as the dozen roses or heart-shaped box of candy you received, we offer a valentine of our own, with this edition of the Compliance News in Review.

If the cliché, “sharing is caring,” is true, CMS is ready for life sciences companies to commence with their annual caring. The Open Payments system is now accepting registrations, registration certification, and data submissions.

Sweet nothings, or any other comments for that matter, were definitely not whispered by Martin Shrkeli at a recent Congressional hearing into extreme drug price increases by his former company, Turing. Shrkeli was questioned and lectured by members of Congress, but he continually stated that he was invoking his Fifth Amendment right to not incriminate himself by testifying. Following the hearing, he took to Twitter, where he referred to the members of Congress as “imbeciles.” Valeant Pharmaceuticals CEO, Howard Schiller, did testify, and spoke of efforts his company was making to respond to the outrage over extreme price increases.

We just received a veritable bouquet of bills from the Senate Health, Education, Labor, and Pensions (HELP) Committee. The Committee passed seven bills as part of the House of Representatives’ 21St Century Cures. The seven bills are intended to increase funding for medical innovation and streamline requirements for new drug approvals. HELP members spend the better part of year deadlocked over increased NIH funding and regulatory changes for drug approvals, so chairman Lamar Alexander created the smaller measures to move the process forward.

It’s all candy hearts and flowers now between SciClone and the SEC. The company reached a $12.8 million settlement agreement with the SEC to resolve allegations it violated the FCPA. The DOJ chose not to pursue charges following its investigation. The allegations centered on the company’s actions in China. The government claimed the company provided gifts and travel for corrupt intent, failed to conduct proper due diligence of travel vendors who were used to funnel bribes to government officials, and failed to conduct an effective internal investigation when t learned of instances of bribery.

The SciClone case points out the need for a robust anticorruption program. SciClone employees provided gifts, travels and expensive meals to government officials and their family members with a corrupt intent, and a vendor provided bribes as well. Due diligence and proper monitoring are key pieces of any anti-bribery program, but so is training. In-depth anticorruption training needs to be deployed to employees, vendors, and any third-party agents conducting business on the company’s behalf. Anyone who represents a company must understand who is considered a government official, what constitutes a bribe, and the types of activities that raise red flags. This is particularly important for pharmaceutical and medical device companies since healthcare professionals may fall under the broad umbrella of a government official. The feds are adding additional headcount to focus on FCPA investigations, so now is the time to evaluate, re-energize, and re-boot anticorruption training.

Have a great week everyone!

Compliance News in Review, February 1, 2016

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It’s Super Bowl week! Another season of ups, downs, highlights, lowlights, hope, and unfulfilled expectations for fans around the country (except for those lucky enough to root for the winning squad) is about to end. Now we’re left to fill a long seven month void until training camp begins anew and hope springs eternal (we know, we’ve mixed our sporting metaphors). Whether you’re pulling for the Broncos or the Panthers, or just a strong lineup of new commercials (spoiler alert), the day is bound to deliver cheers, groans, and snacks aplenty. Before you dive into the game preparations, we offer a playbook of our own, with this edition of the Compliance News in Review.

We kickoff this edition with news from the expanding world of federal oversight. The DOJ announced that it is adding some muscle to the huddle, and bolstering its anti-corruption resources, by hiring ten new prosecutors for its FCPA unit.

It’s time for a regulatory end zone dance in Kentucky. State Attorney General, Jack Conway, has entered into settlements with Endo and Johnson & Johnson over accusations related to the companies’ marketing practices. The state settled with Endo for $24 million over its marketing of OxyContin. The suit accuses the company of positioning the drug as “non-addictive” and encouraging reps to tell doctors it was less likely to be abused than other opioid drugs. The settlement will be used to fund addiction treatment programs. The state settled with Johnson & Johnson for $15.5 million over the marketing of Risperdal for unapproved uses.

The physician leading the charge for a Sunshine Act in Scotland says the public consultation on his petition to Parliament is “unbalanced.” Dr. Gordon, a former National Health Service psychiatrist, says that Parliament is not presenting full information about the current status of the disclosure of payments from life sciences companies to NHS workers. He says information being presented to the public implies that current disclosure rules may be working and sufficient. The doctor claims the evidence presented in his petition shows that payments are escaping current disclosure requirements. Twelve public discussion groups have been held to discuss the matter and more will be scheduled.

The news on the Final Rule is finally off the bench! At long last, the Average Manufacturer Price (AMP) Final Rule has been released. Included in the new rule is language now excluding sales to 340B covered entities from AMP and Best Price (BP); and revised language regarding the exclusion of patient coupons, vouchers and free goods from AMP and BP. In other news from CMS, the Open Payments system is now ready to begin accepting registration, recertification of registration, and data submissions from applicable manufacturers and GPOs. Data submissions for the 2015 calendar year are due March 31st.

Has the ruling on off-label promotion been reversed upon further review? In proposed jury instructions at the trial of a medical device company and its chief executive, the DOJ indicated that it is “not a crime for a device company or its representatives to give doctors wholly truthful and non-misleading information about the unapproved use of a device.” Does this change the off-label playing field?

Before choreographing an end zone dance of our own over the last bit of news, we have to think about what it really means and whether anything really changes. For trainers, probably not. Even if the government is ever so slightly agreeing that truthful off-label speech is lawful, the fact remains, untruthful off-label speech is illegal. Therefore, now is not the time to abandon or diminish on-label training. Your training must still cover the illegal nature of off-label speech, and the proper handling of off-label inquiries. The importance of vetting promotional statements before they are shared with HCPs or the public must still be stressed.

Well, that’s a wrap for this edition of the Compliance News in Review. If you have a side in the big game, good luck!

The 2015 Compliance Year in Review (and Look Forward to the Rest of 2016)

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The start of 2016 may be filled with hope for good compliance-related news to come, but before we travel too far forward with our prognostications, let’s take a look back at some of the stories that really struck a chord in 2015. Charge up your flux capacitor everyone, as we travel back a few weeks and months, with this edition of the Compliance News in Review: the Yearly Edition.

In 2015, a full year’s worth of data was submitted to the Open Payments program. Considering the rejection of massive amounts of 2014 data, as well as the registration issues and delays that plagued the first Open Payments data submission period, system users certainly had cause to be concerned about the 2015 period. Happily, CMS made improvements, and the process, while not problem free, was smoother in 2015. The agency improved its validated physician list for manufacturers and its data matching processes, which resulted in fewer records being rejected. The improvements in the registration process seemed to help manufacturers, but did little to improve the physician experience.

CMS announced additional improvements that will hopefully improve users’ experience in 2016, including the removal of limitations around entering special characters in text fields, and improving users’ downloading capabilities.

The life sciences industry certainly pushed the free speech issue with the FDA in 2015. Two companies filed suits against the agency, arguing that they had the right to truthfully promote drugs for off-label uses. In the Amarin suit, the court granted an injunction, and the company is free to promote the drug for use in a wider patient population than the drug was originally approved.

On the heels of that case, Pacira filed suit over the FDA’s insistence that the company was promoting a pain killer for post-surgery pain, an unapproved use.  After the company received a warning letter, stating that drug was only approved for use following a specific type of surgery, Pacira argued that the FDA was illegally trying to narrow the approved use. The company also argued that even if it was promoting the drug for an off-label purpose, it had the right to do so, as long as it was sharing truthful information. The FDA quietly removed the warning letter from its website and eventually settled the case.

After years of chatter, but very little visible action, the Serious Fraud Office entered into its first deferred prosecution agreement with a corporate entity, over violations of the U.K. Bribery Act. Standard Bank was accused of failing to prevent bribery by an allied person. The DPA remains in effect for three years and requires the bank to pay $32.6 million; submit to a review of its anti-bribery policies by an independent reviewer and make any changes recommended by the reviewer; and cooperate with authorities in any other matters that arise from the indictment.

The year was devoid of multi-billion dollar settlements in the industry, but 2015 did see the largest settlement by the OIG under its civil monetary penalty authority. The OIG settled with Sandoz for $12.64 million over allegations the company submitted inaccurate ASP data to the Medicare program. The agency alleged that the company submitted inaccurate data between 2010 and 2012, which “undermined the integrity of the Medicare Part B drug pricing system.”

Any worthwhile year-end retrospective needs to include a look forward. So here are the issues that we think will be hot topics in 2016:

  1. Drug pricing transparency. In 2015, several states proposed laws that would require companies to disclose costs for drugs that run in the thousands of dollars per-dose or course of treatment. This push isn’t likely to go away, considering recent dramatic drug price hikes by companies like Valeant and Turing, which resulted in inquiries by lawmakers in the latter part of the year.
  2. Transparency in Europe. Staying on the transparency theme, we expect physician spend reporting in Europe to be a prominent news story toward the middle of the year. The first round of reporting under the EFPIA Transparency Code is due then, and the first round is sure to be thoroughly dissected and analyzed.
  3. Individual accountability. In September of 2015, the Department of Justice released a memo from Deputy Attorney General Sally Quillian Yates saying the agency plans to focus on holding individuals accountable in cases of corporate crime. Not exactly earth shattering news, but the DOJ has put it in writing, so they must really, really mean it. Whether the agency brings a case against an individual in 2016 or not, the policy is sure to be widely discussed by federal prosecutors and other agency representatives at conferences throughout the year.

Have a great 2016 everyone! We’ll see you at CBI’s Pharmaceutical Compliance Congress January 26 and 27.

Compliance News in Review, December 10, 2015

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One of the great traditions of the Christmas season is the performance of Tchaikovsky’s The Nutcracker by ballet companies and dance schools around the world. Whether performed by professionals or students, the ballet is full of magic and fantasy. A young girl, Clara (or Marie, depending on the production), receives a nutcracker, which comes to life, fights an army of giant rats, and then whisks Clara away to land of sweets ruled over by the Sugarplum Fairy. Almost as delightful as the prospects of watching giant rodents fight on stage is what’s been happening in the world of life science compliance. Places everyone! Time for the Compliance News in Review.

Standard Bank is taking a bow as the first company to enter into a deferred prosecution agreement (DPA) with the Serious Fraud Office over violations of the U.K. Bribery Act. The company was accused of failing to prevent bribery by an allied person. The DPA remains in effect for three years and requires the bank to pay $32.6 million; submit to a review of its anti-bribery policies by an independent reviewer and make any changes recommended by the reviewer; and cooperate with authorities in any other matters that arise from the indictment.

It’s not a dream Clara, the DOJ announced it has recovered $3.5 billion in False Claims Act cases in 2015. As in years past, healthcare fraud represented the lion’s share of the recoveries. In 2015, healthcare fraud cases totaled nearly $2 billion. Cases against the pharma industry represented $96 million of that total. It was a good year for qui tam relators as well. Of the $2.8 billion recovered from qui tam cases, a record $1.1 billion came from cases in which the U.S. chose not to intervene.

Harvard Medical School has made a slight change to its conflict of interest policy. The school is relaxing a policy that prohibited faculty from accepting equipment or other support from a private company in which they have equity, or from a public company in which they hold equity of $30,000 or more. The school will now allow faculty conducting basic research to petition for an exclusion from the rule if they can show that the benefits of the research outweigh any potential conflict of interest. Faculty would also need to show they have measures in place to guard against conflicts of interest.

Physicians may need Uncle Drosselmeyer to come guide them through the Sunshine Act sine a new study shows professional medical organizations aren’t doing so. The study appeared in the journal, Postgraduate Medicine. Researchers reviewed 59 articles and found there was very little guidance regarding the Act, and professional associations tended to focus on sharing broad information about reporting requirements. Rarely was there information regarding payments for research grants, trial participating and medical publication. The authors conclude that expert guidance about the Final Rule itself is needed, and suggest a lack of guidance may impact physician investigators’ participation in clinical trials and publishing results.

Clara’s trip to the land of sweets may have all been a dream conjured up by the mysterious Drosselmeyer, but after years of anticipation, the SFO is making its promise of dealing with corporate bribery a reality. In addition to the Standard Bank DPA, another corporation was recently charged by the SFO with violating the U.K. Bribery Act by failing to prevent bribery. If the lack of prosecutorial action has made training on the U.K. Bribery Act a lower priority for you, now is the time to move it up the priority list. Likewise, if you haven’t trained on the Act recently, a refresher course may be in order to ensure employees and third parties are up to speed on the requirements and your company’s policies.

That’s a wrap for this edition of the Compliance News in Review. Keep dancing everyone…and stay compliant.

Compliance News in Review, November 24, 2015

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The new nominee to head the FDA faces some tough questions on Capitol Hill, state prosecutors join to investigate potential false claims made by pharmacies, and the AMA institutes a policy calling for a ban on DTC advertising.

Gobble, gobble! Bring on the food coma, it’s Thanksgiving! We can practically smell the turkey and stuffing (or “dressing,” depending on what part of the country you call home) now! While the holiday doesn’t hold the same lore for Hollywood as Christmas, it has inspired at least one memorable sitcom scene. The food, football, parades, family and friends…we’re ready for Thursday! In the meantime, we’ll pass the time with this edition of the Compliance News in Review.

President Obama’s nominee to head the FDA was talking turkey during a recent confirmation hearing. Questions for Dr. Robert Califf were generally tame, but a couple of senators got tough with questions about his ties to the pharmaceutical industry and drug pricing. Senator Elizabeth Warren expressed her concern over what she described as “significant financial support” from pharmaceutical companies that Dr. Califf received while he was a researcher at Duke University. The doctor objected to the idea that the support biased his research in any way, and said copies of industry-funded research contracts would be provided to the committee. Senator Bernie Sanders was the only senator expressing an objection to the nomination, saying the FDA needed a commissioner that would be aggressive in fighting for lower drug costs, and Califf isn’t that person. Much of the discussion focused on the backlog of generic drug approvals at the FDA and Califf agreed that the agency could improve the approval rate.

Federal prosecutors in Florida, California, Texas and Mississippi are gathering around the table with the Department of Defense to investigate fraudulent claims made to the Tricare program by compounding pharmacies. Allegedly, one marketing group went so far as to use social media to promote compound creams to military members and their spouses. In the 2015 fiscal year, Tricare paid $1.75 billion for compounded drugs, which is nearly 20% more than the program paid in 2012 for these drugs.

Time to make a change to the drug marketing recipe, according to the American Medical Association. At an interim meeting of the Association, a policy calling for the ban of direct to consumer (DTC) advertising of prescription drugs in medical devices was adopted. The new policy is based on the idea that money poured into the marketing of drugs is inflating prices, and DTC advertising drives a demand for expensive new medications, which are not always appropriate. In addition to calling for a ban on DTC advertising, the policy will establish a task force focused on lowering the cost of drugs by advocating for more competition in the sector and transparency in drug pricing.

Before we close this edition of the Compliance News in Review, we’d like to take a moment to say how thankful we are for all you, our dear readers. Whether you’re celebration leads you over the river and through the woods, or keeps you closer to your own home, we wish you happy and safe Thanksgiving.

See you in December!

Compliance News in Review, November 16, 2015

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The OIG 2016 Work Plan is released, the House of Representatives form a task force to combat rising drug costs, a Massachusetts HCP is indicted in the Warner Chilcott case, and CMS releases informational charts to help clear Open Payments confusion.

He’s an international man of mystery, who’s licensed to kill, and he is back in theaters for you viewing pleasure. He’s Bond, James Bond. The latest installment of the series, Spectre, has hit theaters. The reviews are mixed, but hey, all we ask out of a Bond film is a good vodka martini (shaken, not stirred), spectacular gadgets, and a good chase sequence or two. Whilst we check local screening times, we’ll leave you with our own top secret document to peruse, this edition of the Compliance News in Review.

For Your Eyes Only, it’s the OIG 2016 Work Plan. Okay, it may not be top secret, but the 2016 plan is out and it reveals some interesting news for pharma and med device companies. You may recall that in the 2015 Work Plan, the OIG said it would review the financial interests reported under the Open Payments Program. In this year’s Plan, the agency has slightly revised this initiative (revision in bold):

“We will determine the number and nature of financial interests that were reported to CMS under the Open Payments Program. We will also determine the extent to which CMS oversees manufacturers’ and group purchasing organizations’ (GPOs’) compliance with data reporting requirements and whether the required data for physician and teaching hospital payments are valid.”

Previously, the Work Plan stated the OIG would review whether the required data was reported “accurately and completely displayed in the publicly available database.”

U.S. House and Senate members have no Quantum of Solace regarding drug prices in wake of some recent high profile drug price hikes. In the House, a group of Democrats have formed the Affordable Drug Pricing Task Force to pursue “meaningful action to combat the skyrocketing costs of pharmaceuticals.” In the Senate, the Special Committee on Aging is set to investigate large spikes in drug prices. The Committee sent letters to Valeant, Turing Pharmaceuticals and two other companies for information regarding recent large increases in drugs sold. The Committee also requested a face-to-face meeting with the CEO of Turing. Both Valeant and Turing have also received subpoenas from federal prosecutors regarding their drug pricing policies.

A Massachusetts gynecologist was indicted on several different charges including a count of violating the Federal Anti-kickback Statute in connection with Warner Chilcott case. The indictment also seeks criminal forfeiture of $23,500. If found guilty, the doctor could face up to 11 years in prison and fines up to $325,000.

CMS won’t Never Say Never Again to the inclusion of Open Payments data on the Physician Compare website , but it is a no for now. After receiving comments and some consumer testing, it was determined the data is different that data presented on the Physician Compare website. CMS will continue to conduct tests with consumers to determine how best to frame the data.

In the past, the hierarchy associated with teaching hospitals has confused The Living Daylights out of reporting organizations that try to determine how to report payments in the Open Payments system. CMS hoped to clear the confusion by providing a couple of during a recent webinar. One chart is intended to help reporting organizations determine when and how to report payments to teaching hospitals. The other is an organizational chart to help show how the various entities roll up to a teaching hospital on the CMS teaching hospital list. Other topics covered during the webinar included record validation changes for 2015, and how to report stock and stock options as forms of payment.

CMS has been working diligently to improve the Open Payments system. The recent news of improvements offers a good reminder for companies to survey their programs, to make sure  all of the pertinent information related to the changes is being communicated. While the process of preparing systems to handle those changes is important, stakeholders such as sales, R&D, and vendors also need to be aware of how those changes affect their interactions with customers. On-going training is critical.

Well, that’s all the compliance news fit to blog for this edition. Have a great week everyone!

Compliance News in Review, November 2, 2015

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The first corporate criminal bribery settlement under the UK Bribery Act is announced, a Biomet rep files a retaliation suit under the False Claims Act, Novartis settles with the DOJ, Warner Chilcott pleads guilty in a kickback case, and Valeant legal concerns continue to grow.

Here a pumpkin, there a pumpkin, everywhere a pumpkin…or pumpkin spice to be more specific. Seems like there is pumpkin spice version everything these days. That may not be a bad thing though, since according to news reports, a shortage of canned pumpkin may lead to a shortage of pies. The horror! Just in case, better to stock up on those Pumpkin Spice Oreos and Pumpkin Spice Twinkies in the meantime. Happily, there is no shortage of “spicy” compliance stories here at the News in Review, so let’s get this edition cooking!

Something spicy and significant is brewing in Scotland, with regulators announcing the first corporate criminal bribery offence settlement under the Bribery Act. Brand-Rex, a mid-size Scottish cabling systems company, admitted it had failed to prevent an associated person from committing bribery, and agreed to pay £212,800 as confiscation for the benefit gained from the action. The company operated an incentive program for its distributors, and one of its independent distributors offered travel tickets received through the program to a purchasing decision-maker to influence a purchasing decision. Brand-Rex discovered the bribery through an internal audit, and self-disclosed its findings to the authorities. Since the company cooperated with the investigation, it avoided criminal prosecution.

A former Biomet sales representative claims he was not treated gingerly by the company. The rep filed the suit under the anti-retaliation provision of the New York False Claims Act, claiming retaliation by the company after he reported the kickback concerns. According to the rep, he was harassed for 13 months before eventually being fired.

Novartis has carved out a settlement in principle with the DOJ, in a whistleblower case involving the company’s relationship with specialty pharmacies. The agreement will include a settlement of $390 million, and CIA obligations.

Warner Chilcott has agreed to pay $125 million and will plead guilty to a felony charge of healthcare fraud. According to the government, the company paid kickbacks to physicians, manipulated insurance companies to pay for prescriptions, and made unsubstantiated claims about its drugs. The company’s former president was arrested for conspiring to pay kickbacks to physicians, and several physicians and district managers face charges in connection with the case.

The stroll through the pumpkin patch has not been pleasant for Valeant lately. The company was subpoenaed by two US Attorney’s offices to provide documents related to its pricing policies, and its patient assistance and financial support programs. Then Valeant was accused in a report by short-seller, Citron, of creating phantom sales through its relationships with specialty-pharmacies. Citron compared Valeant to Enron in the report. Valeant stock prices took a serious tumble following the report, and led to shareholders filing suit against the company. Lawyers for the shareholders are seeking class action status for the suit.

Orange you glad when friends come to bat for you? (See what we did there – pumpkins are orange, so we said, orange you glad…oh never mind.) A couple of industry groups have done just that for Pacira Pharmaceuticals in its suit against the FDA. PhRMA and a consortium of industry companies known as the Medical Information Working Group (MIWG) have filed Amicus briefs with the court in support of Pacira’s First Amendment case against the FDA. Pacira received a Warning Letter, which has since been de-published by the FDA, over truthful off-label promotion of one of its drugs. The company subsequently filed suit against the agency. The letter from the MIWG points out that promotional speech is protected speech under the First Amendment under the Sorrell v. IMS decision, and the off-label use of drugs is common and often the medical standard of care.

While the topics in this edition of the Compliance News in Review may be varied, they all highlight the need for companies to establish a strong ethical culture. As we saw in the story from Scotland, having procedures in place to identify misconduct is an important first step, but having the courage to bring the evidence of misconduct to authorities is critical as well. Creating an environment in which individuals can report suspect actions without fear of reprisal is paramount.

Have a great week everyone!

Compliance News in Review, October 14, 2015

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A survey of physicians in the UK reveals negative opinions of the pharmaceutical industry, another pharmaceutical company settles kickback allegations with the DOJ, BMS enters into an FCPA settlement, and new legislation aimed at adding to industry reporting requirements is introduced in the Senate.

The boys of summer are singing their swan song. The MLB playoffs have begun! If your team is in the hunt, congratulations, but unless you’re pulling for the Cubs, getting too excited is useless. Robert Zemeckis says the Cubs will take it all, via Back to the Future 2 of course. There’s just one problem though, Miami won’t be the Cubs opponent, as predicted by the film, but hey when one predicts the future, there are bound to be just few hiccups. While we wait to test the accuracy of the director’s clairvoyance, let’s take look at the more recent past, with this edition of the Compliance News in Review.

First up to the plate are a group of physicians who are unhappy with the pharmaceutical industry. A recent survey of physicians in the UK found that almost half of the respondents had a negative opinion of the pharmaceutical industry. The primary reason was the belief the industry focused too much on sales and marketing. Other reasons included the lack of understanding of physician needs and budgetary pressures. The negative view is leading to increased resistance to face-to-face meetings with sales representatives. Ironically, the survey showed physicians who did meet with sales representatives were less likely to have a negative opinion of the industry.

After a meeting on the mound with the DOJ, PharMerica has agreed to pay $9.25 million to resolve kickback allegations. According to the DOJ, the company, which provides pharmacy services to nursing homes, received and solicited kickbacks from Abbott Laboratories in exchange for promoting the use of the drug Depakote for nursing home patients.

After some allegedly foul behavior in China, BMS has entered into a $14 million settlement with the SEC to resolve FCPA charges. The SEC alleged that BMS China sales representatives bribed doctors and then inaccurately recorded the bribes as a business expenses. The SEC claims BMS failed to respond to bribery red flags, and failed to investigate employee claims that fake invoices were being created to hide the bribes.

Industry and physician groups are not happy about a proposal by CMS to include Open Payments data on the Physician Compare website. In July, CMS sought comments on a proposal to include Open Payments data on the Physician Compare website. AdvaMed and BIO both pointing out that the payments would be presented without proper context. PhRMA said that CMS should focus on improving how the data is presented on the Open Payments website before sharing it on another website. The AMA expressed similar sentiments, saying it was opposed to the sharing of data that physicians haven’t validated as accurate, and pointed out there was still much work to be done in this area on the Open Payments website.

Team Sunshine Act is back in the game. Senators Grassley and Blumenthal introduced legislation that will require drug and device manufacturers to report payments and transfers of value to mid-level practitioners. The legislation is called the Provider Payments Sunshine Act, and if passed, would go into effect in 2017. Senator Grassley said the law closes a void in the current requirements, and it would provide a complete picture of the payments provided to healthcare providers. Senator Blumenthal said all providers need to be “held accountable,” and that this level of disclosure is necessary “in today’s world.”

Transparency continues to be a hot topic in the industry, both in the US and abroad. We’ll be watching to see if the law proposed by Senators Grassley and Blumenthal makes it out of the Senate, or if more states take up the initiative to pass laws requiring the reporting of payments to mid-level practitioners.

The evolving nature of transparency laws and requirements requires pharmaceutical and medical device companies to actively train and communicate with employees about what’s expected. Effective training is needed to ensure compliance with the laws and requirements, and, as importantly, to work toward clearer communications between sales representatives and the healthcare providers whose information will be disclosed.

Have a great week everyone!