Compliance News in Review, February 1, 2016

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)

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

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

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

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

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!

The 2015 Pharmaceutical Compliance Congress: A Review

The Sixteenth Annual Pharmaceutical Regulatory and Compliance Congress, in Washington DC, featured legislators and industry leaders discussing hot topics and best practices to a diverse and rapt audience of compliance professionals.

Annual OIG Update from Mary Riordan

The opening plenary session kicked off with the annual OIG Update, from Mary Riordan, Senior Counsel, Office of Counsel to the Inspector General. In addition to her usual review of recent settlements actions (False Claims and otherwise), and the OIG’s Fiscal Year 2015 Work Plan, Riordan focused on the responsibilities of boards of directors in company compliance functions, and urged the audience to use the OIG’s April 2015 Practical Guidance for Healthcare Governing Boards on Compliance Oversight as a starting point for those expectations. Staying on the topic of board responsibility, she pointed out that prior to her appearance at the conference, Millennium Health LLC had entered into a Corporate Integrity Agreement that requires the company to maintain a majority of independent (non-executive and non-family) directors as part of the settlement.

When stressing that kickback concerns continue in the industry and for her agency, Riordan suggested that attendees “think about the kickback risks associated with financial relationships and strive to identify the relationships that would implicate risks.” What controls are in place? Are those controls meaningful and effective? She emphasized that the OIG was there to help and their goal is “not to collect penalties, rather, it is to encourage companies to comply.”

She also focused on individual accountability and reminded the audience that “individual accountability at all levels of organizations is under fresh scrutiny as the OIG tries to identify individuals responsible for misconduct.”

AUSA Panel

The Assistant US Attorney’s (AUSA) Panel followed with Charlene Keller Fullmer from the US Attorney’s Office in Philadelphia, Jeffrey Steger from the Civil Division of the DOJ, and Kristen Williams from the US Attorney’s Office in Los Angeles, presenting their views on the direction of compliance enforcement. Keller Fullmer said her office continues to see off-label cases focused on kickbacks, particularly with small companies and medical device companies. She pointed out that with smaller companies, pinpointing a paper trail is an easier and less cumbersome process than it is with the larger companies. Following up on Mary Riordan’s comments, she also suggested a review of recent CIAs, and their emphasis on individual accountability.

Williams recited her office’s mantra of “come in, come early, and come often” when discussing how companies should react to an investigation. Demonstrating a robust approach to compliance is critical when she evaluates a compliance program. She recommends a proactive approach, one in which a company responds to issues, before those issues even arise in that company.

For Steger, the key to a successful compliance program is one that involves more than just compliance personnel (a theme throughout the conference). Is compliance part of the company’s culture? Has the company taken proactive steps to initiate and invite feedback, e.g., an 800 number compliance tip line?

FBI’s New Focus on FCPA Investigations

The next plenary presentation was a bit of a twist on the usual agenda, as Jeffrey S. Sallet, National Chief of Public Corruption and Civil Rights for the Federal Bureau of Investigation, offered the update on the Foreign Corrupt Practices Act (FCPA) from the Bureau’s perspective. The focus was on a “five pillars” approach to successful enforcement and according to Agent Sallet, only through a partnership with the public, industry, and other governmental agencies like the SEC, DOJ, and IRS, can the FBI be successful in its goals to encourage a global culture of compliance.

Agent Sallet’s enthusiasm and energy was a tough act to follow and after a break, Thomas Abrams, Director, Division of Drug Marketing, Advertising and Communications, Food and Drug Administration followed up with his annual FDA-Office of Prescription Drug Promotion (OPDP) update. As per usual, Abrams presented a plethora of notes and comments describing the FDA’s efforts over the last year, a high-level review of the document and advertisement submission process and summaries of guidance released and/or updated by his office. These include the 2014 guidance documents on the use of social media.

Abrams closed with a great example of a sales aid that spurred a warning letter from his office. The product being promoted was contraindicated for children under 6 year of age, but the aid included an image of a very young child in its montage of images, and it included no risk information. Seeing such a clear violation provided a concrete and powerful case for why companies need to take the OPDP’s guidance seriously, and regularly test the process for submitting samples through the agency’s email dedicated to that process –

Chief Compliance Officer Roundtable

Following the FDA presentation, a Chief Compliance Officer Roundtable focused on the evolution of compliance programs following the expiration of Corporate Integrity Agreements. CCOs from an array of pharmaceutical companies agreed that while the end of the CIA did not cause drastic changes in their programs, it afforded them the opportunity to expand how they approached topics like training.

One panelist began by stating that on Day 1 following the expiration, there were no public displays and no celebrations, saying “it was business as usual.”

Another panelist recalled that her department was relieved that they could now think beyond four hours of online training and include “short spurts of training throughout the year.” When asked about tracking that training, the panelist admitted that doing so was sometimes a challenge, but the organization was able to “focus on getting back to their true purpose, educating the learners.”

A third panelist brought up the topic of policies and how the shift to a post-CIA environment gave them an opportunity to survey the full staff for thoughts on what works best in compliance polies and subsequently revamp those policies based on that feedback. The company even hired a creative agency to help them create documents that presented policy content in a more graphical and engaging fashion.

The fourth panelist emphasized the importance of developing a risk assessment model and addressing risk-based needs accordingly. Others agreed, emphasizing that they are now using data analytics gathered during the CIA to address those risks.

FCPA Anticorruption Panel

Day 1 closed with a unique twist on the standard presentations, as a panel of in-house and outside attorneys discussed the FCPA through the lens of a hypothetical case. The structure offered a relief from the standard didactic approach to the content, with moderator, Gary Giampetruzzi, Partner at Paul Hastings, guiding panelists through the scenario.

The scenario was structured and branched in a manner that allowed for gray areas and debate as to the best resolution for each question. As an example, when discussing whether post CIA, the Compliance department should be moved back into the Legal department, one panelist avoided what may have seemed the obvious answer of “no,” and stressed that combining the two would be okay if Compliance still had independence despite the structure. An attorney on the panel agreed, especially in terms of the Foreign Corrupt Practices Act, having that independent voice is the key.

US DOJ Civil Section Update

Day 2 started early, with an 8:15 AM update on the DOJ Civil Section from Benjamin Mizer, head of the agency’s civil division. Mizer discussed the growth in qui tam civil cases (FY 2014 saw 469 healthcare-related cases) and presented compelling statistics on the cases involving rewards to relators. In a comment that was prevalent throughout the conference, he reminded the audience of the government’s use of data to expedite investigations and make a decision as to whether or not to proceed.

Update from CMS on Open Payments

The highly-anticipated presentation from Douglas Brown of CMS didn’t disappoint attendees interested in learning details around the data collected and the updates/improvements to the Open Payments system. Brown pointed out that covered recipients with higher counts of payments records were more likely to review and dispute transfers of value, and there were just over 30,000 disputes, equally divided across teaching hospitals, physicians and principal investigators.

On the enhancements front, the agency is focusing on eliminating the character limitations in the system, so email addresses won’t be blocked. The ability to download reported records will also be enhanced to include dispute information and recipients will have the ability to exchange contact information with the reporting entity to further facilitate the review and dispute process.

After providing the audience with a number of reminders, (e.g., device names are now required on submissions, and TOVs to physician-owned distributors are considered indirect payments and must be reported), Brown informed the attendees that the next Open Payments Open Session Webinar is scheduled for Thursday, October 29th.

Qui Tam Panel

The Qui Tam Panel started with Jillian Estes of James Hoyer Newcomer & Smiljanich, PA, reviewing her recent representation of a relator who worked undercover seven years in a pharmaceutical company investigation. Estes used the case to describe who she considered the ideal relator – a principle driven person with a fearless mindset, who is willing to suffer the consequences of a whistle blower. The individual needs to be realistic in expectation and understand that the process is a long one, usually 3-5 years.

Joseph Trautwein, of Joseph Trautwein & Associates LLC, made it clear that the reason potential relators come to him is because they went to their employers first and the situation was not corrected. The panel listed the characteristics of a good whistleblower case:

  • A lie took place
  • A party benefits form the lie
  • The scheme can be easily explained to the government
  • There is enough evidence of misconduct that the complaint will survive a motion to dismiss
  • There is proof of damages
  • It’s a “good story”

Off-Label Communications and the First Amendment

In the final plenary session of the morning, Paul Kalb of Sidley Austin LLP, delved into the Amarin and Pacira lawsuits, whereby the companies presented the argument that criminalizing off-label promotion when it is used to communicate truthful information is unconstitutional. Kalb reviewed the potential ramifications of those cases and closed with the reminder the proverbial jury is still out on how on-going cases will be settled. Based on recent rulings though, we are fast approaching a fork in the road in this core and critical compliance issue.

Mini-Summit: Evaluating Compliance Program Effectiveness

Among the first series of “Mini Summit” breakout sessions, I chose to attend the Evaluating Compliance Program Effectiveness – Board Responsibilities, Board Advisors, and Compliance Experts panel discussion and Q&A.

The first panelist indicated that a good starting point for evaluation of the program is how the company manages high-risk third parties. Are there strong and effective controls in place for third-parties doing business on behalf of the company? Another stressed the need to have outside counsel involved in the program to provide an outsider’s view on the process and the program. A third panelist felt strongly that having people with different backgrounds on the compliance team is important. He also suggested that attendees look at the OIG’s recent guidance for board oversight of the program. “The board needs to demand frequent dialogue,” he said. Another felt that board members have a responsibility to ask questions, review the data, and speak up.

When evaluating training, one panelist emphasized the power of employee surveys to assess whether all participants understood the content of the training. When an audience member asked whether those surveys should be broad or targeted, that panelist said it depends on how each company operates and another added that at his company, they survey the entire employee population.

One panelist also warned the audience about the risk of getting too comfortable in their policies and procedures. New people coming into the company may be coming from a different industry, and may not have had orientation to a compliance program. “Be ahead of the curve,” he said, “when decisions like Amarin come down, you need to be having a conversation.” A fellow speaker followed with the need for an interaction between compliance and the businesses. “It’s important to vet your compliance procedures with the business owners,” he said.

Mini-Summit: Managing Multi-national HCP Meetings

In the Managing Multi-national HCP Meetings: Complying with the Codes and Transparency Requirements session, a panel from around the world discussing the codes and laws relevant to their particular regions.

One industry executive discussed the challenge of holding meetings with physicians from around the world, who each bring their own set of rules from his or her home country. For example, when holding an advisory board with multinational participants, how should meal limits be addressed when those limits vary? The company establishes ground rules but allows common sense to prevail – for example if a limit is slightly above the physician’s home limit, allowing the meals may be a more realistic approach. The executive added that it’s important to create a list of approved meeting places in each country and to train travel agencies on that list.

Hwa-Soo Chung of the Kim & Chang Law Firm in Seoul, South Korea, reviewed the rules in her country, where practices are driven by industry codes with strict limits on speaker meetings no matter where the meeting is held. That severely restricts how much companies around the world can invite Korean doctors to their meetings.

According to Yuet Ming Tham, of Sidley Austin and former Asia-Pacific Compliance Director for Pfizer, “the biggest risks are Korea and China.” The companies she works with will go for lowest meal limit among the group of physicians. In terms of content, companies should always follow the rules of where the meeting is taking place.


The Sixteenth Annual Pharmaceutical Regulatory and Compliance Congress managed to deliver new perspective and debate on the topics facing the life sciences compliance industry, despite what some attendees described as a lack of new guidance, news or government policies in recent months. Each day of the conference was filled wall-to-wall with the type of keynote speeches, panel discussions and networking opportunities both experienced professionals, and newcomers to the field, need to consider as they strive to create and maintain compelling and effective compliance programs.

Thanks for reading,

Sean Murphy

About NXLevel Solutions

Through its PharmaCertify™ division, NXLevel Solutions helps life science companies build positive compliance cultures and reduce risk through innovative training and communication solutions. Our newest tool,, is a streamlined and intuitive site that enables manufacturers to share payments information with HCPs and HCOs before data is reported to CMS or other authorities. Contact us or visit for more information.


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