Week in Review, November 12, 2012

The PharmaCertify™ Team

It’s been a wild couple of weeks. Hurricane Sandy followed a nor’easter that the Weather Channel named Athena (really, TWC?), and that was followed up by “Brutus” (again, really?), which socked western states with snow. And somewhere in the middle of all of it, we had an election. We hope all of you affected by this weather are safe and life is getting somewhat back to normal. Time for a look a back to see what made news, other than the weather. Here’s this week’s News Week in Review.

The 6th Circuit Court of Appeals ruled last week that when the False Claims Act was amended in 2009, Congress essentially used the terms “claims” and “cases” interchangeably. (Interesting bit of trivia on the ruling; it came on the same whistleblower case that prompted the 2009 amendment to the law.) In a nutshell, when the change in the law came about, Congress said it applied to pending “claims” back to June of 2008 as well as all pending “cases” at the time the law was enacted. The 2009 amended law changed the definition of a “claim,” so enter the wild litigation. A federal district court said the new standard for a claim could not be applied to cases pending in June of 2008. The courts said if Congress had intended for that to happen they would not have used the word “claim” to refer to those cases. Enter the 6th Circuit, which upon examination of the statute, said Congress used the terms interchangeably.

In other legal news, an examination of the Boehringer Ingelheim settlement and CIA begs the question, are the feds really “done” with stepped up enforcement of off-label promotion cases? The BI settlement cited two types of false claims stemming from off-label promotion not generally seen in these cases. One involved promotion of products for higher dosage than what was on the label, but the false claim only applied to Medicaid and Federal healthcare programs other than Medicare – sending a signal that state Medicaid may play an increasing role in fraud investigations. The other involved claims of superiority, which are rare in False Claims cases.

Coincidentally, during her speech at the Pharmaceutical Regulatory and Compliance Forum, Mary Riordan, of the OIG, mentioned that the agency would be focusing on less traditional promotional issues in 2013, such as superiority claims. Her remarks also focused on the results of a February roundtable with compliance officers from pharmaceutical companies who were under CIAs. The session revealed that many of the participants wanted more direction from the government regarding promotion over social media.

Dierdre Connelly’s keynote address at PCF was focused on trust. Ms. Connelly said, “Trust is a two way street” and that GSK has changed as company, and that those who hold them accountable need to understand that. She went on to discuss the change in GSK’s sales representative compensation program. The change began with a discussion with New York sales reps, during which the reps pointed out their sales metrics did not align with their customers’ goals for their patients. This was preventing the reps from building a sufficient level of trust with their customer. The company has since changed how it compensates all sales representatives, and that change appears to be helping the company regain the trust of physicians.

During Ms. Connelly’s address she said, “fines and settlements do matter.”  The SEC and DOJ agree with her when it comes to fines levied against the industry in FCPA cases. The industry has come under fire in recent years for promotional activities outside the U.S. Millions in fines have been doled out against a handful of companies but some question if the fines are much of deterrent. A fine in the tens of millions of dollars against a company that brings in billions of dollars a year is not much of hit to the bottom line. A representative at the SEC said she believes the fines are making a difference. She adds, however, that if the SEC learned companies simply view fines as a cost of doing business, the amount of the fines would certainly rise.

That brings us to the end of this week’s News Week in Review. This week, we learned new ways enforcement agencies are viewing the impact of promotional activities on federal healthcare programs, in particular promotion for unapproved uses of product. As you keep this in mind when planning your 2013 training, Pharmacertify can help with custom and off-the-shelf training focused on on-label promotion and good promotional practices.

Have a safe and dry week everyone!

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