Compliance News in Review, March 24, 2015

Oregon considers the idea of requiring pharma companies to disclose pricing information, CMS offers Open Payments updates, Sandoz settles with the OIG over alleged pricing data misrepresentations, the DOJ beefs up its FCPA enforcement team, and Public Citizen petitions the FDA on the issue of companies distributing peer-reviewed articles.

It’s time to dance everyone! March Madness is here. And what a dance it has been so far. As per usual, a couple of Cinderella moments wreaked havoc on brackets far and wide. Now it is onto the Sweet 16. Is your team still in the mix? While there’s a momentary break in the action, let’s take a look at the stories that filled our dance card this past week. Time to tipoff this week’s Compliance News in Review.

Our first story takes us to the home of the Oregon Ducks. Perhaps taking a cue from its neighbor to the south, a bill has been introduced in the Oregon legislature to require pharmaceutical companies to disclose information related to drug pricing. California introduced similar legislation recently, and like the California proposal, Oregon’s proposal would apply to drugs with an annual wholesale acquisition cost of $10,000. Companies would be required to file an annual report with the State, detailing information such as the manufacturer’s costs related to R&D, and costs paid for distributing the drug. Representatives from industry groups, PhRMA and BIO, testified before a committee, saying that the proposed law would harm patients and industry companies.

The clock is running down for 2014 data submission to Open Payments. With that in mind, CMS recently held a Q&A session to deal with any burning questions from Applicable Manufacturers and GPOs. During the call, CMS suggested that companies that have United States spelled out in their files deleted their records, change to “U.S.” and resubmit. So far the work around has proved largely successful. The agency also noted that it can trace deleted manufacturer records and said in order for companies to avoid audit issues and possible penalties, companies should separate rejected records from accepted records.

Sandoz was called for a costly foul when the company agreed to settle with OIG for $12.6 million over allegations it misrepresented drug pricing data. According to the OIG, between 2010 and 2012, Sandoz misrepresented the Average Sales Price (ASP) to CMS. As part of the settlement, Sandoz had to certify that it has established a government pricing compliance program.

The DOJ is adding quite a few new players to its FCPA enforcement team. The agency has confirmed it is adding 30 new agents specifically to deal with FCPA violations. More hands on the DOJ deck raise the stakes for companies in their compliance efforts. Legal experts say companies need to take a look at their internal and external anticorruption programs, and conduct reviews of internal controls, risk assessment, and third-party due diligence.

The SEC plans on beefing up its FCPA enforcement schedule. At the Corporate Counsel Institute conference, the SEC’s enforcement director, Andrew Ceresney, said that the agency’s regulatory focus would be on internal controls, and more FCPA enforcement actions. He pointed out that the SEC has already brought more FCPA cases in the five months of the 2015 fiscal year, than it did in all of 2014.

Public Citizen is asking the FDA to withdraw a proposal that would allow pharmaceutical companies to distribute peer-reviewed articles containing data stating a drug is not as risky as indicated on the label. The group sent a letter to Health and Human Services, saying the proposal would allow drug companies to “sell more drugs by making them appear safer than the FDA judged them to be.” Public Citizen has obtained and published all the comments the FDA has received on the proposal. Most of them are in opposition to the idea.

That about wraps it up for this edition of the Compliance Week in Review. Here’s hoping your favorite college squad is still in the hunt for a Final Four – we’ll be here wondering what exactly happened to our Villanova Wildcats (there’s always next year…again).

Have a great week everyone!

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