Week in Review, December 10

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.

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