Sunshine Act

Week in Review, January 7, 2013

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The PharmaCertify™ Team

Despite the doom and gloom “allegedly” predicted by the Mayans, 2013 arrived, and we’re all here raring to go for a new year! Well, maybe not raring…quite yet, but there is something rejuvenating about the turn of the year isn’t there – contemplatively looking back on the past year while looking ahead to the new year with hope. So time marches on, and so does the news. Let’s take a look at the happenings between the holidays in this week’s News Week in Review.

Victory Pharma didn’t go out on the happiest of notes in 2012, agreeing to pay $11.4 million to settle criminal and civil allegations surrounding the marketing of several of its products. Of the total settlement, $1.4 million was to resolve criminal allegations of violating the Anti-kickback Statute. The remaining $10 million is to resolve allegations of violating the False Claims Act. The case was brought by a whistleblower who was a former company sales representative.

And speaking of sour notes, 2013 didn’t start happily for a physician who blew the whistle on Amgen. A circuit court has denied the NJ physician’s petition for a court hearing to challenge the government’s recent $612 million dollar civil settlement with the company. The physician claims the government told him to either agree with the settlement or face the possibility of seeing his case dismissed. He declined to sign on, and now the government has asked the court to dismiss the case against Amgen. A lawyer for the physician says his client did not agree to the settlement because government prosecutors would not inform him of his share of the settlement.

A new survey from Ernst and Young shows that mid-market UK companies need to put learning about the UK Bribery Act on their resolution list for 2013. The survey of procurement managers and directors reveals that 64% of mid-market companies do not understand the law. Of those familiar with the law, just over half vet their suppliers for information on how to comply.

As you may know, in December of 2012 Eli Lilly settled allegations of violating the FCPA. In case you haven’t had time to read the enforcement action against Lilly, we have good news for you; Tom Fox has posted a brief video with an overview of the enforcement action, along with the specific internal audit function lapses cited by the government.

The American College of Obstetrics and Gynecology (ACOG) is ringing in the New Year with an update to its policy on professional interactions with the industry. The new policy encourages ACOG members to refrain from taking part in speaker’s bureaus; discourages professionals from accepting gifts (including meals) tied to promotional information; and encourages the provision of  vouchers or samples only to those with a “true need.”  The new policy also encourages physicians to  attend device training conducted by a professional association that has CME accreditation or only attend training focused on the FDA-approved use of the device. The policy also covers ghostwriting and research.

So is the idea of updating your compliance courses on your list of 2013 resolutions? How about investigating mobile technology for expanding the delivery of compliance content? Pharmacertify can help, with custom and off-the-shelf solutions designed to integrate compliance training throughout your company. Check out our course listing and mobile learning options at www.pharmacertify.com.

Happy New Year from all of your friends at the News Week in Review! Have a great start to the year everyone.

Compliance and the Petraeus Scandal

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By Lauren Barnett

PharmaCertify™ Compliance Specialist

CBS Moneywatch recently ran an article about the lessons businesses could learn from the situation that brought on the resignation of General Petraeus as Director of the CIA. Is there a compliance lesson to be learned here? If we look at the situation through the corporate lens and skip past the “soap opera” elements, we have a classic whistleblower situation. Let’s set the scene.

Person P is a high ranking, highly esteemed individual knocking on the door of the c-suite. As it turns out, Person P and Person B are engaged in some sort of activity that is at best unethical, and at worst, illegal, and that activity could cause a problem with the government. Person K knows about it, but doesn’t feel the need to say anything until Person B starts dishing out threats; perhaps saying to keep quiet, or threatening Person K’s position within the company. Person K decides the time is right to come forward and report the threats, as well as the activity of Person P and Person B. The investigation eventually results in Person P resigning his position.

So what went right? First, Person K identified the questionable activity and had access to a method for reporting it. Through training provided by the company, Person K knew the activity was not permitted. The company had procedures in place  to allow Person K to report the issue, and also created an environment in which Person K felt comfortable coming forward to report the issue.

Second, the report was taken seriously and was investigated. The high ranking status of Person P was a non-issue and the evidence brought forward was not swept under the rug to protect Person P.

Third, there were repercussions (as far as we know) for Person P and for Person B. Again, the rank of Person P was not an issue. We don’t know if the company allowed Person P to resign or if Person P saw the writing on the wall and chose to leave before the company imposed its own discipline. In either case, there was no effort to cover up the situation or simply slap Person P on the wrist.

Sounds like a textbook handling of the situation, right? Well not completely. Unfortunately, Person K didn’t come forward as soon as she knew Person P and Person B were involved in unethical or illegal activity. She waited until she was  threatened to file a report. Maybe Person K simply didn’t care about the activity, despite the fact it could mean trouble for the company. Or, perhaps she feared retaliation or assumed no punishment would occur due to the status of Person P.

Communication is key. Employees need to know the policies apply to everyone, regardless of rank or their perceived value in the company. The policies regarding the protection of those who do come forward also need to be communicated throughout the organization.

These situations are never easy, and admittedly it can be daunting for employees to come forward. (And if we’re being honest here, whistleblower awards from the government don’t make it any easier.) It all starts with training and communication about what constitutes appropriate behavior and the responsibility of each employee to ensure that business is conducted appropriately. Whether through an open door policy and/or an anonymous reporting hotline, employees need a clear pathway to report problematic behavior. However, it will all be for naught if the company doesn’t take reports seriously, conduct a thorough investigation and then act to correct the behavior.

Week in Review, December 10

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The PharmaCertify™ Team

Tis the season for giving. And if you ask us, “giving” represents the best part of the season. Sure, there’s the stress of coming up with just the right gift for that friend who doesn’t want to offer any hints, or the pressure of deciding whether to pick from the pile or “steal” from your coworker at the company’s yearly White Elephant. So before you’re faced with such daunting decisions as whether a Chia Pet or Pet Rock (how’s that for a dated reference?) makes more sense, we offer our gift to you: the week’s News in Review.

We begin with the week’s big surprise gift. The Second U.S. Court of Appeals overturned the conviction of a former sales representative for promoting a product off-label. The court agreed with the sales rep’s contention that his First Amendment rights were violated and the case was sent back to the lower court for reconsideration. The court also cited the reversal of Vermont’s data mining law by the Supreme Court in support of its decision.

Speaking of First Amendment cases, a former InterMune executive is appealing his conviction for wire fraud, which was based on a press release that touted the use of one of the company’s products for unapproved uses. The executive’s argument is based on his right to express a scientific opinion and the government is arguing that the First Amendment does not protect fraudulent speech, even if it “concerns scientific matters.”

While some may consider the FCPA guidance to be a gift that keeps giving throughout the year, the pharmaceutical and medical device industries would be hard pressed to agree. Michael Volkov, partner at the law firm, LeClairRyan, points out that the guidance confirms that life sciences professionals are operating in a high risk environment, where interactions with physicians can be problematic in regard to the FCPA. Volkov cites three takeaways for pharma and med device. First, doctors are foreign officials or instrumentalities and nothing in the guidance indicates that the government intends to back away from that position. Second, companies are liable for their distributors and sub-distributors and due diligence is a must when doing business overseas. Third, companies need to be careful when considering medical conferences, since foreign doctors have significant expectations for company-sponsored attendance.

Healthpoint Ltd. and DBF Pharmaceuticals picked the gift that no one wants; a fine. The companies agreed to a settlement of up to $48 million to deal with False Claims allegations over the product, Xenaderm. The government contends that the active ingredient in Xenaderm was found to be less than effective for its intended use in 1970, making the ointment ineligible for reimbursement by Medicare and Medicaid. Further, the companies were not forthcoming about the regulatory status of the ointment, causing false claims to be submitted to the government. The companies will pay $28 million to resolve the allegations, with another $20 million to be paid if either of the companies experiences a change in ownership over the next three years.

It’s time to tie the last ribbon and bow onto this week’s News in Review. Remember, if iPads are on the gift list for your sales reps this year, PharmaCertify offers the app development and mobile training programs you need to ensure critical compliance information is at their fingertips year round.

Have a great week everyone, and happy giving…and we suggest the Chia Pet.

Week in Review, December 3, 2012

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The PharmaCertify™ Team

Thanksgiving is behind us and now we move on to other celebrations of the season. As December kicks off, so do the many Christmas parades in towns, cities and theme parks around the country. And who doesn’t love a parade? We can’t wait for the colorful floats, marching bands, and classic cars, while we stand for hours in the cold, breathing in the fumes from the tractors pulling the floats, getting pelted by candy thrown from the floats by overzealous scouts. What’s not to love.

Speaking of causes for celebrations, we begin this week with the big news that the Office of Management and Budget is now in possession of the final rule for the Sunshine Act. CMS says the final rule will be published by the end of the year. (is that the sound of skepticism we hear out there?) Data collection begins January 1, 2013.

The speaker’s bureau parade is coming to an end for faculty at the Oregon Science and Health University. The proposal prohibiting faculty from serving as paid speakers for pharmaceutical companies is expected to be approved in the next couple of months. A petition supporting a ban on participating in speaker’s bureaus was signed by over 100 students at the University earlier in the year. Not everyone is thrilled with the idea. The faculty responsible for the presentations is concerned that the information they share during lectures will be delivered by less qualified physicians.

The OIG has billions of reasons to celebrate this season. In its semi-annual report to Congress, the agency lists expected recoveries totaling $6.9 billion among its accomplishments for the second half of the fiscal year. The OIG identified $8.5 billion in savings for the government, and that they excluded over 3,100 individuals from federal healthcare programs.

The OIG also informed Tennessee that the state’s false claims act needs work. In 2011, the agency notified several states their laws regarding Medicaid false claims were not as stringent as the federal law and they needed to bring the laws up to snuff in order to receive additional recovery money. Tennessee amended its law, but the OIG says the amended law does not offer enough protection for whistleblowers.

On the anti-bribery front, a drilling company located in Scotland became the first company to negotiate a settlement under the UK Bribery Act. The company will pay £5.6 million, the amount of profit gained through the bribes, and will not face further investigation.

In FDA news, the OPDP issued an untitled letter to Cornerstone Therapeutics addressing a pitch letter generated by the company, which allegedly contained false and misleading information and  unsubstantiated superiority claims. It’s rare to see an FDA letter issued against a PR piece, as FDA enforcement tends to focus on non-PR pieces.

That’s all for this News in Review folks. Have a great week and remember, as you map out your 2013 compliance training, PharmaCertify offers the custom, off-the-shelf, and mobile training you need to help ensure your team has the latest in compliance content integrated into their daily work lives.

See you next week!