Week in Review, April 28, 2013

The PharmaCertify™ Team

This is quite an exciting week in the world of entertainment! No, we’re not referring to an award announcements or anything else equally as mundane. This is much more news worthy…Friday is the kickoff of the summer blockbuster movie season! It begins with the release of Iron Man 3…or as it is better known by some of us here at the News, That Movie that is Opening Two Weeks before the New Star Trek. That’s a lot to put on a movie poster so we can see why Disney/Marvel just went with Iron Man 3. And if that isn’t enough drama and excitement for you, we pull the curtains back on this week’s News Week in Review.

The drama in state Attorney Generals’ offices is high these days with states getting more aggressive in the pursuit of deceptive marketing cases against pharmaceutical companies. While the multi-state nature of many of the cases leads to large settlements, an assistant attorney in the Oregon Justice Departments points out that more states are feeling empowered to pursue these cases on their own. Several states have filed suits against GSK over Avandia. J&J faces a similar situation with Risperdal, and is currently appealing decisions in cases in Arkansas and South Carolina. For the states involved, the cases are appealing because they don’t have to prove that consumers have been harmed.

The incentive compensation “claw back” provision in two recent CIAs has prompted a spin-off of sorts. A working group featuring six pharma companies created a set of principles by which a company may reclaim the bonuses of executives in the wake of corporate compliance or other violations. Members of the group believe the principles will aid in deterring unethical behavior. The principles include the claw back being at the discretion of the board’s compensation committee, and the compensation committee having full discretion as to whether a violation caused serious financial harm to the company.

Don’t let the fact that there haven’t been any recent record-breaking FCPA settlements or cases announced recently fool you. The government isn’t taking a break from enforcement. According to a report from the law firm, Miller and Chevalier, the number of government-initiated investigations was at its highest in 2012, and four investigations are already underway in 2013. The number of companies self-reporting potential violations is also on the rise.

There’s nothing like success to get your next project “green lit,” and the OIG is using that approach to justify its proposed FY2014 budget. Some of the highlights in that justification include the $7.90 recovered for every dollar the agency spent on investigations, and the $15 billion in savings and recoveries expected for FY2012. The OIG is asking for $320 million for Medicare and Medicaid oversight, which includes continued support for the Health Care Fraud Prevention and Enforcement Action Team (HEAT).

Ah, the plot twist, the cornerstone of any thriller…but why should the movie makers have all the fun? One twist is playing out in Federal court in California, with two pharmaceutical companies facing off in a False Claims Act whistleblower case. In 2009, generic manufacturer, Amphastar, brought a whistleblower case against Aventis, saying Aventis (now Sanofi) fraudulently gained the patent for an anti-clotting drug. The suit claims patent allowed Aventis to raise the price of the drug, which caused Medicare and Medicaid to overpay for the drug. Aventis argued that the information regarding the patent had been publically disclosed, and as such, Amphastar could not use the information to bring a suit under the False Claims Act. Amphastar argued that the fraudulent patent was discovered only through their investigation and therefore, they were the source of the information. As an original source, Amphastar is able to bring suit under the False Claims Act. The judge agreed and another hearing is expected to occur later this year.

Last week, CMS posted FAQs for the Sunshine Act on the OPENPAYMENTS website. Are the FAQs helpful? Sure, but with all respect, it isn’t the most user-friendly section of the website. Sunshine is hotter than ever and the information is flying fast. That’s why we cover topics like reportable and excluded payments and the differences between Sunshine and state laws, in our new user-friendly and customizable eLearning module titled, The Sunshine Act: the Federal Physician Spend Disclosure Law.

Have a great week everyone, and we’ll see you at the movies!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s