FCPA

Week in Review, September 24, 2012

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The PharmaCertify™ Team

Well, fall officially arrived on Saturday! Bring on the rich colors, cooler weather, outdoor festivals and fairs, and perhaps most importantly, the end of the growing season for lawns most every where.  If none of this inspires you for the turn of season, perhaps last week’s revival of Starbuck’s Pumpkin Latte will do the trick. As you take time to enjoy this beautiful time of year, don’t forget to schedule a few minutes to check in on the compliance news of the past week, with the News in Review.

Winds of change are blowing slowly in Australia. Medicines Australia’s revised Code of Conduct currently sits with a government regulatory agency awaiting approval. The change under consideration is the reporting of monies paid to physicians for speaking and consulting services, including payments for travel and hospitality while providing those services. If the change is implemented, reports will be published beginning mid-2014. Not everyone is happy. Transparency advocates would like to see individual payments reported, not aggregate payments.

Staying in the South Pacific (where it isn’t fall at all), the Penang Health Department is investigating six pharmaceutical advertising claims involving products for heart and kidney diseases. An enforcement representative said none of the ads received the required regulatory approvals.

Moving on to a cooler climate, a compliance professional in Russia explains what “compliance” means to the Russian pharmaceutical industry. He explains that a successful compliance program is not just about making sure your company is following the “rules” as defined by government agencies, but also involves the proper flow of information. A company needs to have systems that allow the information to flow from the compliance team and back from the organization.

A new study finds that physicians have a skeptical view of clinical trials sponsored by industry. Board certified internists were provided abstracts of results for clinical trials for fake drugs. The physicians were informed that the funding for the studies came from either the industry or the NIH, or there was no disclosure at all. Participants were then asked to offer their confidence in the results of the study and whether they’d prescribe the drug. Products related to those studies identified as funded by industry were less than half as likely to be prescribed as those funded by the NIH.

In corporate fraud cases, whistleblowers can definitely rake in the big cash, but the big dollar awards are rare, according to experts. That’s because most cases involve multiple whistleblowers, and the awards are split among the group. Then the relators’ lawyers and Uncle Sam take their cut. Across all industries, five of the top seven awards went to whistleblowers in healthcare cases. Three of those five are from pharma cases: Pfizer, GSK and Abbott. To keep your team reporting to the compliance office instead of their lawyers’ offices, PharmaCertify’s off-the-shelf compliance modules include topics like open door and anti-retaliation policies and are easily customized to include your hotline and contact information.

A new study finds that 25% of pharmaceutical companies do not have dedicated compliance teams in place. (Color us a bit shocked.) According to the researchers, many of the companies believe that compliance needs to be decentralized in order to be in better contact with the issues “on the ground” so they tasked “function-specific personnel with compliance responsibilities.”   Unfortunately, that approach has resulted in business units being unaware of what other units are doing in terms of compliance polices and processes. The researchers recommend that one individual be assigned to oversee all the company’s compliance efforts, and to draw a line between regulatory and commercial compliance responsibilities.

And with that, we come to the end of this week’s NWR. Enjoy the fall weather everyone and have a great week!

Week in Review, September 17

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The PharmaCertify™ Team

It starts earlier every season, and before long, you’re sick and tired and just ready for all the hype to end. “Christmas sales?” you ask. No. (Although the fact there are trees up and decorated in stores before we’ve even brought out our fall clothes is disturbing.) We’re talking about campaign season. We’ve had enough of all the posturing, the non-answer answers, the ridiculous campaign and PAC ads that run more often than beer ads during a ball game. There should be some sort of rule, law or generally accepted practice that there is to be no campaigning by candidates, or thought provoking messages by PACs, more than six months prior to the first primary! Okay, we’ll step off the soapbox now and move on to news you can actually use: this week’s News Week in Review.

We’ll lead off the NWR with a politician attempting to hold the bureaucracy accountable. Senator Chuck Grassley issued a statement regarding the current status of the Sunshine Act during a roundtable session of the Senate Special Committee on Aging. After some brief background regarding the Act, Senator Grassley expressed his frustration with CMS’s continued delay in releasing the final rule for Sunshine, and their lack of communication regarding the reason for the delay. He even brought up the rumor that CMS has sent the final rule to the Office of Management and Budget (OMB), and the OMB is holding up releasing the rule until after the election. He called on CMS to confirm whether there is any truth to the rumor, and if there is to clear up why the rule is being held. Grassley closed his comments by defending the companies that will have to implement the law by saying companies need the final rule released to assure their systems would allow them to meet the “letter of the law.”

From the halls of the Capitol comes the shocking story that fighting over budget cuts by our elected officials now threatens to hold up the dollars paid in user fees by drug and device makers. In order for the FDA to access the money paid by the industry, it must first receive certain funding from Congress, and the budget stalemate in Congress is delaying that funding.

In news from the FDA, the Office of Prescription Drug Promotion (OPDP) issued an untitled letter to Eli Lilly questioning the use of color on an image of a brain that appeared  on a product website and on promotional materials. The OPDO said Lilly was misbranding the product, a radioactive agent used for PET Scans, because the color images suggest that scans can be displayed and reviewed in color. The prescribing information specifically calls for the use of black and white scale and gives several examples of how to read scans in black and white.

On the political history front, the DOJ has re-released the original FCPA document signed by President Carter and Speaker of the House, Tip O’Neal. A nice slice of history, but what isn’t history is the DOJ’s focus on investigating healthcare companies for potential violations of the law. The medical device industry has found itself squarely in that bull’s eye. An article in Compliance Week examines recent settlements and the risks that make the industry vulnerable to potential violations. The author says the top factor regulators take into consideration during investigations and settlements is a strong culture of compliance within an organization. Robust training is an important part of building a culture of compliance, and we can help with our Understanding and Preventing Bribery in the Global Life Sciences Marketplace module.

Hey, look who’s jumping on the Pinterest bandwagon; it’s pharma! A handful of companies are embracing this rapidly expanding social media platform. Bayer was the first to “pin it,” and now, they’ve been joined by Boehringer Ingelheim and GE Healthcare.

BI also upped the social media game for the industry with the beta launch of its Facebook game, Syrum. The game allows players to run their own pharmaceutical company and develop drugs for a variety of diseases. The company also has a YouTube channel, Twitter feed, and blog focused on the game. The game is in public beta in Europe, with a global launch expected in 2013. We can’t wait to see the FB requests for lab equipment appear in our news feed.

For an executive at a pharma or med device company, being excluded from federal healthcare programs is never a good career move. So the former CEO of InterMune is fighting his five-year exclusion handed down last year. The CEO claims that since his wire fraud conviction had nothing to do with delivering a health care item or service, the OIG had no basis for exclusion. He claims the OIG based the exclusion an unproven allegation of misbranding, for which he was acquitted. The OIG says the CEO is misinterpreting the law, and that a direct correlation between the conviction and the provision of a health care item or service is not required.

That certainly was a big week for political mudslinging, but we’ve hosed off and we’re hoping to evade the muck this week. Oh well, that’s what they make volume buttons for, right? On the bright side, we are one week closer to the election, so it will all be over soon. We can take some comfort in the fact that this sort of craziness has been around since well, since a political system existed in this country. If you think political races of modern times are harsh, take a look at some old school mudslinging.

Have a great week everyone!

Week in Review, September 4, 2012

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The PharmaCertify™ Team

At last, this past weekend was the time to dust off the pompoms and break out the stadium seats! Fall “officially” arrived with the start of the college football season! This is truly the most wonderful time of the year! Decorating the car with magnets and flags, preparing a game day feast for family and friends, and let us not forget the ever important ritual of face and body painting. Good times, good times. After such festivities and a long holiday weekend, it’s hard to focus and get back to work, but we’re here to help kick off this first work week of fall with the News Week in Review.

We’ll kickoff this week’s review with a story of kickbacks. Omincare has struck an agreement in principle in a whistleblower suit that accuses the company, and its owner, of paying kickbacks when it purchased a pharmacy services company. The government declined to join the suit. Omincare has agreed to settle the suit, but the company’s owner has not, and that case continues.

Pharmaceutical sales reps in India haven’t exactly been cheerleaders for their industry, as made obvious by the day-long strike by the Federation of Medical and Sales Representatives’ Associations of India. The group protested against threats to job security, high prices of drugs and corporate corruption in the industry. In a letter, the FMRAI said the effort to shift responsibility for corporate corruption onto sales representatives has led to reps being banned from hospitals and medical institutions. The group says the true corruption is occurring at the corporate level and it is demanding that a statutory code of ethics be enacted.

And now for the halftime show! Taking the field is the American College of Informatimusicology with their salute to obtaining your medical information. Sit back, relax and enjoy the show!

The California Assembly passed a bill that will amend the state’s False Claims Act. The amendment will more closely align California’s law with the federal statute. Changes in the California law include increased protections for whistleblowers, provisions for awards to relators even if those relators were involved in the action that led to a violation, increased penalties for violations, and broadening of the definition of what constitutes a claim. The bill has been sent to the governor for signature.

The much anticipated FCPA guidance from the government appears to be advancing down the field ahead of schedule. Assistant Attorney General Lanny Breuer had said the guidance would be released in November, but now sources say the government will release the guidance in advance of the OECD meeting in October. The release could come this month with the officials from the Justice Department scheduled to speak about the guidance at the National Conference on the FCPA.

Some Georgia men may find themselves wearing a black and white striped uniform, but it won’t be as referees. The Securities and Exchange Commission charged eight men with insider trading related to Sanofi-Aventis buying publically traded Chattem, a pharmaceutical products company. The SEC says one of the men, an accountant, learned of the pending sale from a client who had come to him to discuss the tax implications the Chattem purchase would have on his stock options. The accountant then shared the information with four friends and as the cliché goes, “they told two friends, and they told two friends, and so on, and so on.”  The SEC said the group made just over $500,000 in trades. Four of the accused have agreed to settlements with the government without admitting wrongdoing. Cases against the other four men are moving forward.

Well folks, the clock has run down on this game, and all that’s left is to tune up the band and sing the Alma Mater before we head out of the stadium. We hope your team, high school or college, emerged victorious over the holiday weekend! Have a great, short, work week everyone.

Week in Review, August 27, 2012

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The PharmaCertify™ Team

Time is a ticking on summer with Labor Day just around the corner and now is the time to squeeze in those final cookouts and road trips. Of course, any proper barbecue or cross country trip wouldn’t be complete without a list of great summer tunes. Remember that great anthem that you heard all summer long and brought back great memories when you heard it years later? Well, as you start building this year’s Labor Day weekend playlist of guilty pleasures, we have a bit of “list” to tune up ourselves, the News Week in Review.

There’s been a British invasion over at Shire as the company joins the Association of the British Pharmaceutical Industry (ABPI) as a full member. Regarding the decision, company representatives said, “we seek to play a role in the development and growth of our industry, so joining the ABPI will be one way of contributing to this.”  Shire will also have a representative joining the ABPI Board of Management.

Two congressmen are not singing the praises of the current 510(k) approval process for medical devices. In a letter to the head of the FDA’s Center for Devices and Radiological Health, the pair expressed concern that faulty medical devices are able to reach the market through a loophole in the 510(k) approval process. The congressmen would like to see the FDA’s authority extended to deny approval for devices with designs that are based on devices that have previously been recalled.

On the legal front, former baseball star, Eddie Murray, and Abbott executive, James Mazzo, were indicted by the SEC on charges of insider trading related to the purchase of Advance Medical Optics by Abbott. Mr. Mazzo, former CEO of Advance Medical Optics, is alleged to have shared non-public information regarding the sale with one of Murray’s teammates. Murray learned of the sale from the teammate and profited from the inside information. Mr. Mazzo denies the allegations while Mr. Murray has agreed to a settlement with the SEC, but has denied any wrongdoing.

A former employee at Abbott is whistling an interesting tune about the company’s marketing practices for its cholesterol drug, TriCor. A new whistleblower case has been filed alleging the company used misleading and off-label marketing practices and provided kickbacks to doctors, which all led to Medicare and Medicaid paying for unnecessary prescriptions.

The definition of a foreign official under the FCPA, an oldie but goodie, was making the rounds on the anti-bribery playlist last week. This time, the case involves a Haitian telecommunications company. One of challenges to the defendants’ conviction centers on whether Haiti Teleco could be considered an instrumentality of the government simply because Haiti’s national bank owned a majority of shares in the company. In its brief, the government said 97% of the telecom company is owned by the bank, thereby making it an instrumentality of the government. The government also said the defendants could have requested an opinion from the DOJ as to whether the telecom company counted as an instrumentality.

Boehringer Ingelheim wants to “blind you with science,” but not in the typical fashion. Rather than announcing a breakthrough drug, the company announced they launch a social game that lets players run their own lab. The game, Syrum, is scheduled for beta trial in September. The company says they developed the game to educate “players about the pharmaceutical industry in a fun and engaging way.”  Game on!

And so we’ve reached the end of our playlist. If you’re like us, you’ll soon be breaking out the seersucker suit and white shoes for one final spin as you relish the memories of another summer season? Have a great week everyone. Enjoy the Labor Day festivities!

Week in Review, August 20, 2012

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The PharmaCertify™ Team

It’s that time of year again. It’s the season when we’re inundated with television commercials compelling us to wait in long lines for the latest must-have items. It’s back to school time! And we have a reading assignment for you…this week’s News Week in Review. The bell is about to ring, pencils out please.

Medicines Australia is starting the school year with a group project: determine the best way to publically disclose information about payments to doctors. The organization’s Working Group on Transparency is comprised of members of the medical community, consumer groups and pharmaceutical companies. While Medicines Australia has stated its commitment to improving transparency of physician payments, the Australian Medical Association is concerned about the identification of individual doctors. Their concerns echo those that have been raised by medical groups here in the U.S. about the Sunshine Act, including the potential for misrepresentation of the data to the public.

The DOJ appears to be cutting back the amount of “school supplies” it requires of companies accused of FCPA violations. During 2012, the DOJ pulled back on the requirement that companies hire an independent monitor. Only three of seven companies have been required to hire the monitor thus far this year. The others have been asked to self-monitor and then report to the DOJ. In recent years, the problems with the independent monitors have been a source of embarrassment for the Department, and that may be the reason for the cut back. While we’re on the FCPA, check out this list of the top 10 corporate settlements. Guess what industry did not make the list?

A new study finds doctors are more likely to move sales reps carrying iPads to the head of the class.  According to the study, 65% percent of doctors say when they’ve seen reps carrying an iPad. More importantly, 35% of doctors say they are more likely to request a sample from a rep that is carrying an iPad, and 29% say they are more likely to prescribe.

We’ve reached the lunch portion of our “school day.”  If your beverage of choice is chocolate milk made with Hershey’s syrup, it may not be as nutritious as the label led you to believe. The FDA issued a warning letter to the chocolatier regarding wording on the labels of a couple of the syrups. One product said “plus calcium” and another used the wording “fortified with vitamins and minerals.” Neither product met the guidelines necessary to make those claims. The company has since changed the labels.

Vein treatment device maker, Vascular Solutions, seems to have gotten on the class monitor’s list. The company has announced the federal government will intervene in an off-label investigation. The investigation stems from a complaint filed with the U.s Attorney’s office alleging the company’s promotional practices cost the government around $20 million in damages. The company said it will continue to cooperate with the U.S. Attorney’s investigation, but will defend the case “as something that’s factually inaccurate and without merit.”

PhRMA, AdvaMed, Biotechnology Industry Organization (BIO) and Medical Imaging and Technology Alliance (MITA) teamed up on a letter writing assignment this week. The industry trade groups sent a letter to CMS this week regarding the pending final rules for the Sunshine Act.  The groups expressed their appreciation to CMS for their careful consideration of the many comments received on the proposed rules and requested CMS allow manufacturers 180 days to implement the final rule before beginning data collection.

Speaking of AdvaMed, a gold star goes to the group for its hiring program for returning military veterans. The program is called MedTech Veterans Program Boot Camp for Returning Heroes, and it will provide training in resume building and interviewing skills. Additionally, 25 vets will be provided mentors to help them transfer their skills into jobs in the med tech sector.

The bell is about to ring, so time to pack up and head to the next class. For those of you who are still on “summer vacation,” enjoy the final beach weekends before you’re rockin’ the school’s carpool line. Have a great week everyone!

Week in Review, August 13, 2012

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The PharmaCertify™ Team

The thrill of victory, (US Women’s soccer team), the agony of defeat (Aly Raisman and Catalina Ponor both finding themselves out of a bronze medal due to gymnastics’ tie break rules) as well as the human drama of athletic competition (Oscar Pistorius and the first Saudi female athletes), has played out in London as the Olympics came to a close this weekend. And shockingly it ended without an overload of Miley Cyrus’ “Party in the USA” from the broadcast team at NBC. Something to be thankful for! Now it is time to return to the grind. If you’ve been glued to your computer for the around the clock, live stream, we’ve got your back with the News Week in Review.

In the Olympic spirit, an international group of researchers conducted a study regarding the disclosure of conflicts of interest in medical journals. The researchers targeted articles published by physicians and scientists that were reportedly involved in off-label marketing activities. The group found that one in seven authors fully disclosed their conflict of interest. Of the articles reviewed by researchers, only 15% contained adequate disclosure. Researchers are concerned because journal authors may have a strong influence on the prescribing habits of other physicians considering an off-label therapy.

Not defeated but most likely in some agony, KV Pharmaceutical filed for bankruptcy. The company’s CEO said the company has not realized the full value of its most important drug because the FDA has not enforced KV’s marketing exclusivity on the product. Since the exclusivity has not been enforced, several state Medicaid programs have made access to the drug more difficult.

Forest Labs has received another yellow card, in the form of an untitled warning letter, from the Office of Prescription Drug Promotion at the FDA, for statements made by two of its sales representatives. According to the letter, the representatives failed to communicate the drug’s appropriate patient population as well as its limitations of use. In addition, the reps allegedly minimized the risks associated with the product. The OPDP is especially concerned because the company is already under a CIA.

A law firm in Hong Kong has issued a report indicating that more Asian countries are joining in the anti-corruption game. While the FCPA and UK Bribery Act remain the top dogs in driving anti-corruption reform, individual countries are increasingly enacting their own anti-corruption laws. The group found that while the laws are similar in structure, enforcement varies from country to country.

And speaking of anti-corruption, there was certainly a whirlwind of enforcement activity last week. First on the podium is Fresenius Healthcare AG, the world’s largest provider of dialysis equipment and services. The company notified the SEC and DOJ it was conducting an internal investigation into possible violations of the FCPA. Next up, generic drug maker Teva says it has received a subpoena for documents related to its business practices in Latin America. Teva is cooperating with the feds and has hired independent counsel to conduct an investigation. Rounding out the anti-bribery “awards,” Pfizer  announced FCPA settlements with the government for over $60 million. The company’s subsidiary, Pfizer H.C.P. Corporation, agreed to pay $15 million to resolve an FCPA investigation and will enter into a Deferred Prosecution Agreement with the DOJ.  Pfizer H.C.P. admitted to paying $2 million in bribes to government officials in Russia, Bulgaria, Croatia and Kazakhstan. The DOJ says self-disclosure and cooperation led to a reduction in the base fine and the company is not required to hire a corporate monitor. Apart from the subsidiary settlement, Pfizer Inc. and Wyeth negotiated settlements totaling $45 million with the SEC, to resolve civil FCPA charges.

Well, that brings us to the end of this week’s Review.  We’ll be going through a bit of Olympics withdrawal this week without the nail-biting competition, or of course, those awesome interactive Olympic-themed Google Doodles! On the up side though, we can finally look forward to a good night’s sleep. That television coverage to midnight and beyond is a killer! Time to get back to normal, and that includes keeping an eye on the news for all of you. Have a great week everyone!

Week in Review, August 3, 2012

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The PharmaCertify™ Team

A tropical storm is churning in the Atlantic, the summer Olympics are going strong and the temperature is steaming hot. Yes, summer is in full swing, but over the weekend the first glimmer of fall appeared! The NFL kicked off its pre-season with a game between the Cards and the Saints. Relief from the heat is on the horizon! You could practically feel the crisp air and see the falling leaves. While there was only one game this past weekend, the rest of the league will be in action soon, so you still have time to dig that foam finger or team towel out of storage. Before you do though, take a gander at the week that was. Down, set, hike! Here we go.

Let’s kick off this week with news of pharma and med device advertising going digital. A publisher of medical journals and texts says advertisers are moving to digital platforms. Why… because that is where the doctors are. Use of iPads by medical professionals is on the rise. Medical journal publisher, Wolters Kluwer, has commitments from 50 companies, including several top pharmaceutical and medical device companies, to advertise in a digital format. To encourage companies to adapt their ads, the company no longer offers the option to purchase print only ad space and instead they bundle print and digital ad space. As it turns out, more time is spent viewing journal ads through apps than through traditional print. Several manufacturers are also incorporating video in their ads.

Pay-for-delay deals are facing a possible judicial sack on both sides of the Atlantic. Here in the US, the Third Circuit Court for Appeals issued a decision that such arrangements are anti-competitive. The Federal Trade Commission has been critical of pay-for-delay deals, and a spokesman for the FTC said the decision by the court was a step in the right direction in “solving this very real problem.” Both generic and branded drug makers argue that the deals are simply a way for solving patent disputes. Across the pond, the European Commission has brought the first anti-trust case against a drug maker for a pay-for-delay deal. A Danish drug company is accused of violating EU anti-trust laws through deals with generic companies that delay the entry of a generic competitor for as much as two years. The Commission says the drug maker may have caused consumer harm through its deals. The company refutes the charges and says its practices are compliant with both EU and national competition laws.

Olympus, the world’s largest maker of endoscopes, is calling a penalty on itself…well a potential penalty. The company discovered “irregularities” in a doctor training program in Brazil and has reported the matter to the DOJ. The company says a violation of the FCPA may have occurred. According to Olympus, the issue springs from the way the company may have handled expenses for travel, food and entertainment for doctors. The DOJ is also looking into the company’s marketing in the US.

Over at Bayer in the UK, there’s been an acknowledgement of a breach of the ABPI Code. Apparently, an employee created and distributed drug information without the company’s knowledge. Three documents were that had not been through the company’s review process were distributed. Some of the volatile material in the documents included comparative claims, inaccurate data, lack of fair balance, and the discussion of license uses. In all, the company has admitted to 12 breaches of the Code.

Vermont has not moved the ball forward in quelling pharmaceutical spending in the state. Despite the transparency brought by the state’s disclosure law and the banning of gifts, pharmaceutical companies have continued to spend at pre-law levels. With changes in the statute, the collected data can be difficult to compare, but according to the state’s Attorney General’s office, the level of spending has been roughly the same the law was passed.

Like the summer, the clock is ticking down on this week’s Review. We hope everyone locates their tailgating essentials in preparation for the weekend’s games. It may still be a bit warm to enjoy our tailgating favorite, chili, but a few burgers and dogs on the grill and an ice cold beverage should hit the spot. Have a great week everyone!

Week in Review, July 27, 2012

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The PharmaCertify™ Team

The majestic tones of the trumpet and pomp of the kettle drum of the Olympic theme rang out on tellies across the world this past weekend with the launch of the 30th Olympiad in London. As exciting as all the sporting contests are, nothing was probably more anticipated than the opening ceremonies. Other than the few carefully leaked bits of information, the majority of the details were shrouded in the mists of Brigadoon. So when the veil of mist finally parted, what did you think? What was your favorite part? We’d give it to the parachuting “Queen”. So, with that in mind, Mr. Bean and the Chariots of Fire sequence wins the night (honorable mention to the bicycling doves.) With opening ceremonies over though, it is time to get down to the business of competing, and this week’s News Week in Review.

Our first story takes us to the 2016 Olympic host country of Brazil. The legislature there has again delayed a vote on the country’s proposed anti-bribery law. However, compliance professionals and others are not waiting on the vote to pass and are getting ready for the law now. According to the OECD, Brazil was the number four country receiving direct foreign investment in 2011. That trend is only expected to rise. Additionally the country will be hosting two key international sporting events in the very near future; the soccer (or football) World Cup in 2014 and the Olympics in 2016. These events will bring a flood of direct and indirect investment into the country. The country is expected to spend billions to make infrastructure improvements to prepare for both of these events. Construction and sports are typically fertile grounds for bribery to occur. As it stands now, the proposed law is built on two pillars: the tough sanctions for violators and incentives for companies to act ethically and comply with the proposed law. It is expected the law will be passed in 2013.

But, back to our current host city of London. Reports are that many high dollar tickets have remained unsold (hmmm…last minute trip anyone?). Could this be due to company restrictions on personal gift giving and receiving? A recent survey from the Society of Corporate Compliance and Ethics (SCCE) and the Healthcare Compliance Association (HCCA) suggests this could be contributing factor. The survey from the two groups showed that most companies are pretty restrictive of the gifts employees can give or receive. The survey found that more companies ban the giving of gifts by employees than receiving. Non-profits and healthcare were tops in banning the giving of gifts. Entertainment also is restricted, but more companies restrict the receiving entertainment than the provision of entertainment. Again healthcare led the way in restricting entertainment over other industries.

The FCPA professor passed the torch to some guest authors this week, three of the defense counselors involved in the first trial in the FCPA sting case. The three attorneys represented a UK citizen in the first group of defendants. They believe there were two overarching factors which led to the results of the first trial and the eventual failure of the prosecution: 1- the pre-trial exclusion of evidence of previous bad acts and 2- their unorthodox decision to call the government’s lead investigator as their only witness.  In the first factor the lawyers said the government intended to bring in seven examples of prior bad acts. They argued this would lead to confusion, and in the case of their client, if he had actually participated in these bad acts, it was not evidence that he intended to defraud the U.S. or violate the FCPA. The judge agreed, and the evidence was not permitted in trial.  In calling the government’s lead investigator as their only witness the lawyers admit they took a huge risk. However, it became clear to them that the government did not intend to have him or their key informant as witnesses. The team took the tactic to ask government witnesses about who made the key strategic decision regarding the investigation. When witnesses answered with the name of the lead investigator, it opened the door for the defense to call him as a witness to answer questions about the investigation. They were then able to illustrate the flaws in the government’s investigation. The resulting mistrial in the first case led the government to change its strategy for the second case.

If you do business with the government, the last thing you want to take a tumble on is a violation of the False Claims Act (FCA). With hefty penalties and treble damages not to mention the specter of exclusion all on the table for violations, companies have to take care to assure they do not run afoul of this piece of legislation. In 2009 and 2010 there were six significant amendments to the FCA brought around by passage of the Fraud Enforcement and Recovery Act and the Patient Protection and Affordable Care Act.  These six amendments are: the Anti-kickback liability; public disclosure and original source requirement; expansion of liability for overpayments; reverse false claims; elimination of the presentment requirement; expansion of the term “claim.”

Industry grants for CME took another dive in 2011. Industry support has been waning since 2008. According to the ACCME industry funding dropped by 11.4% in 2011. The money collected from ads and exhibits fees from industry did go up in 2011, but unlike the previous year, the revenue from these sources was not enough to keep CME in the black. The number of providers and overall attendance also declined in 2011.

The former President of R&D at Pfizer, John LaMattina, has an interesting suggestion in the wake of the loosening of restrictions in the Massachusetts gift ban. Bring the doctors to the researchers. Mr. LaMattina points out that while the charge to loosen the restrictions on meal provisions to doctors was led by Massachusetts Restaurant Association, pharma was not doing itself any favors by joining in. Public perception is that these meals are meant to entice doctors into prescribing expensive drugs, and by the industry arguing for the restrictions to be repealed, it was not doing anything to enhance its public image. LaMattina believes there is true value in physicians and industry representative communicating, but that perhaps there is a better venue in which the communication can occur. His suggestion is for companies to bring the doctors to the labs. In Massachusetts many large companies have research facilities. He points out doctors are very interested in the science behind the drugs, and in turn, the scientists at these facilities enjoy talking about their work. This makes the R&D facilities a great spot for companies and physicians to discuss products and exchange ideas.  What do you think? Gold medal idea, or false start?

That brings us to the end of this week’s News Week in Review. We hope you’ve enjoyed the weekend of competition. We sure have, and after Kazakhstan’s victory in the cycling road race, we’re sure Borat is pretty stoked as well. Have a great week everyone, and go Team!