Week in Review, April 8, 2011

The PharmaCertify™ Team

There were a couple of interesting items this week on the international compliance front. First, an important FCPA case featuring a small family owned business in California. Employees at Lindsey Manufacturing are accused of giving a yacht and a Ferrari to executives at the state owned Mexican power company. The executives say they had no idea that their sales representatives in Mexico used the money they were given in this manner, and they are seeking their day in court.

At the center of this case is the question of who is “a government official.” In many countries, the lines are blurred between private enterprise and government agencies. The case also sends a message that small companies are just as much a target as the large multi-nationals when it comes to the DOJ pursuing FCPA violation charges. Since Lindsey Manufacturing can no longer get credit from suppliers or vendors due to the charges, the company has nearly been driven out of business.

The Lindsey case points to the clear need for smaller companies to be sure their employees and agents have been trained on the requirements of the FCPA, and that executives in these companies are aware of what their agents are doing.

The UK Ministry of Justice and Serious Fraud Office (SFO) recently released guidance on the UK Bribery Law going in to effect this year.  Unfortunately, the guidance has not proved to be particularly helpful in the minds of UK consultants working in this area. According to a report in Operational Risk and Regulation (registration required to view), the guidance does clear up some questions, but other gray areas, including exactly who this law will affect, are not clarified.

Back in the U.S., CMS held a teleconference this week with stakeholders, including representatives from PhRMA, BIO and AdvaMed, on the pending regulations for the Physician Payments Sunshine Act. Industry representatives answered with a resounding “No” to the question of whether additional spend categories and requirements should be included in the regulations.

Discussion also included clarification of how payments that could be reported in multiple categories should be handled, and expanding the types of providers on which spend must be reported. The latter being proposed by a consumer-advocacy firm based in Massachusetts, where the law requires companies to report spend on Nurse Practioners and Physician Assistants. A representative from AdvaMed urged that context be provided as to the nature of the payments since patients could easily misinterpret the relationship between a company and the physician, without an explanation of why the payment was made.

The DOJ filed a compliant against Healthpoint Ltd. for False Claims in relation to reimbursements for an unapproved drug. The government claims Healthpoint stated their drug was eligible for Medicare and Medicaid reimbursement, despite the active ingredient being declared ineffective and having its market approval revoked by the FDA in the 70s. The statements caused millions of dollars in ineligible claims to be paid.

In the resolution of a similar case, Pennsylvania received its $1.8M payout from a government settlement with two pharmaceutical manufacturers over False Claims resulting from claims submitted for unapproved drugs. Like the previous compliant, the drugs involved in this case were not approved as safe and effective by the FDA and therefore not eligible for reimbursement under Medicare and Medicaid.

Are the days of the in office meal and physician consultants coming to an end? Very possibly. Spend disclosure requirements have become more widespread, and now with the passage of the Sunshine Act, doctors are questioning whether it is time to sever ties with the industry. As we know in the compliance world, just the perception of “wrong doing” is enough to raise an eyebrow, and doctors are feeling the same way about the perception of a conflict of interest in their relationships with pharmaceutical companies.

A study published in PLoS Medicine, concludes that most common off-label marketing practices are the ones most difficult to control through regulations. The study authors analyzed 41 off-label complaints brought by whistleblowers and found that there are three primary goals of off-label marketing. The researchers found that to achieve these goals, companies employed a variety of “internal” methods that encouraged off-label promotion. Methods included setting sales quotas which could only be achieved if products were marketed off-label and evaluating patient files for possible off-label uses of drugs. The cases reviewed were either settled or unsealed between 2004 and 2010.  While the authors admit the information contained in the documents could not be verified as accurate, they believe their research may help in developing better regulations.

And finally – To double glove or not to double glove, that is the question. Infection Control Today deals with the myths and the truth around the protection double gloving provides. The article presents compelling evidence that double gloving does provide additional protection against accident sharps sticks and glove failure without compromising dexterity. So the next time you have blood drawn, you may want to insist the nurse, phlebotomist etc. double glove!

That’s the PC news roundup for this week. For those of you attending CBI’s West Coast Aggregate Spend Forum next week be sure to attend Kim Life’s (subject matter expert for PharmaCertify’s State and Federal Spend and Disclosure Requirements module) session, Strategies and Best Practices for Aggregate Spend Training.

Please visit us at www.pharmacertify.com for more information on training topics such as On-label Promotion and Bloodborne Pathogens.   Until next week, follow us on Twitter.

Enjoy the weekend!

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