The Year in Review

The PharmaCertify™ Team

(Hey, everyone does one. Why shouldn’t we?)

We’re shaking things up a bit. Rather than bring you our weekly review of the news from the world of life sciences commercial and corporate compliance, we’ve decided to take a look back at 2012. That’s right, this week we’re bringing you a “Year in Review.” We’ve selected a few key developments that stood out as noteworthy and very well may shape the landscape of compliance going forward. So, settle in and fire up Call Me Maybe (The song of 2012. This is a safe space, you can admit you downloaded it) in the background, and join us for our first Year in Review.

First up is GSK’s $3 billion settlement with the DOJ. According to the DOJ, GSK illegally promoted certain drugs, concealed safety data and falsely reported prices to the government. While the fines and penalties involved were record breaking, what made this case notable was the resulting Corporate Integrity Agreement with the OIG. Two of the new provisions in the CIA involved compensation. First, the OIG usurped GSK’s change in its incentive compensation plan for sales representatives and made it part of the CIA. The OIG also required GSK to set up a program to recoup bonuses and long term incentives of any executives found guilty of misconduct.

Time will tell if the GSK provisions will only be implemented in the more “egregious” cases going forward, or will become the norm. Either way, the OIG has sent a message that the industry does need to examine how it handles incentive compensation for executives and customer-facing employees.

In 2012, we witnessed the release of the long-awaited DOJ guidance on the Foreign Corrupt Practices Act. One year after an update was promised by Assistant Attorney General Lanny Breuer, the DOJ delivered the document. While the guidance was largely a restatement of existing prosecutorial thinking from the DOJ and SEC, it did provide clarity on some issues, like the definition of foreign official and successor liability. The document also included a number of helpful case studies regarding the provision of gifts and entertainment.

The lack of movement on the Sunshine Act is our next big story for 2012. CMS had provided the draft rule for the Sunshine Act in December of 2011, and at that time delayed the data collection start date until after publication of the final rule. Comments on the draft were then submitted by various stakeholders and we expected a final rule to be published in April of this year. Well, the final rule languished, and CMS eventually pushed back the data collection start date to January 1, 2013. There was plenty of finger pointing, with legislative types coming down on CMS and CMS blaming the Office of Management and Budget. In November, the OMB owned up acknowledged that it had received the final rule November 27th and would be reviewing the document. (Please note – OMB has 90 days to issue the final rule.) So here we are, nearly a year later, still no final rule, and data collection is just around the corner. Stay tuned. Who knows, maybe Santa will bring us all a final rule for Christmas.

We complete our look back at 2012 with the recent developments in the U.S. vs. Caronia off-label case, which could also be known as “FDA Regulations vs. the  First Amendment.” For now, the First Amendment is winning. The U.S. Second Court of Appeals overturned a lower court decision, saying the previous conviction violated Mr. Caronia’s First Amendment rights. The case was sent back to the lower court to be re-tried. In its decision, the Appellate Court said that “the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of an FDA approved drug.” The court does not believe the FDCA precluded the sharing of truthful information about off-label uses of FDA approved drugs. While off-label promotion cases have been the bread and butter for government efforts the last several years, most companies choose to settle rather than go to court over the interpretation of the law.

Since this is an Appeals court ruling, the decision only applies to handful of jurisdictions, although some legal experts have suggested this could end up before the Supreme Court. Do you get the feeling we might still be talking about this one as a top story in 2013?

Well, that brings us to the end of our Year in Review. Are there any big stories we’ve missed? Feel free to comment on this blog, hit us up on Twitter (@pharmacertify) or start the conversation in our LinkedIn group. We’d love to hear from you!

Thank you so much for checking in with us weekly as we review the news nuggets from around the world of corporate and commercial compliance. We hope 2012 was a great year for you and yours and best wishes for a safe and joyous Holiday Season!

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