Compliance News in Review, May 20, 2015

New York introduces a drug price disclosure law, a judge dismisses a deceptive marketing lawsuit against four painkiller manufacturers, a new survey shows the public still holds the pharmaceutical industry in low regard, and we offer our take on the bribery reforms around the world, and what they mean for your compliance program.

Are your ready for a three day weekend, and the unofficial start of the summer season? Long days, barbecues and fireflies (or lightning bugs, if you prefer) are upon us again. In the spirit of the changing seasons, we’re making a bit of a change ourselves. This week you’ll notice we shine a spotlight on a specific story from the news. We’ll take a look at what this story means to us in the world of commercial compliance and more specifically, in training. As always, we welcome your feedback.

New York is the latest state to jump on the drug price disclosure bandwagon. A bill was introduced in the State Senate which, if passed, will require drug manufacturers to report information related to the production cost of the drug. Those costs include research costs, clinical trial costs, and marketing expenditures. The law will apply to drugs that have a wholesale acquisition cost of $10,000 or more annually, or per course of treatment.

A federal judge has dismissed the city of Chicago’s lawsuit against four painkiller manufacturers. The suit was filed against five manufacturers, and claimed that deceptive marketing practices by the manufacturers led to patients becoming addicted to the drugs. The judge said Chicago failed to cite specific examples of the deceptive marketing from four of the five manufacturers. The case against the remaining manufacturer will move forward.

The pharmaceutical industry is still struggling to improve its reputation with the public, according to a new survey. The largest industry companies were rated “average” based on seven attributes measured in the study, including products and services, citizenship, and governance. The rating has not improved over the last three years.

This week’s spotlight story concerns changes coming to China’s healthcare system. The State Council and National Health and Family Planning Commission have introduced reforms to the nation’s healthcare system, some of which are designed to reduce corruption involving medical staff. A number of changes were announced, including the establishment of a merit system for employees at county public hospital. Physicians will also be removed from the drug procurement process, unless they serve on a procurement team. The teams will be required to operate openly and may be subject to public reporting. Hospitals will also be required to sell drugs to patients at cost.

While none of the reforms were directed at pharmaceutical or medical device companies, they do point to China’s ongoing commitment to the elimination of corruption in its healthcare system. For life sciences companies, now is the time to establish a strong anticorruption program and a well-vetted policy on interactions with foreign officials needs to be an integral component in that program.

In addition, updated training needs to be deployed to employees and third-party representatives alike. Countries around the world are revising anticorruption laws and are stepping up enforcement of those laws. The Foreign Corrupt Practices Act is no longer the only game in town, and training needs to cover regulations like China’s Circulars 49 and 50, the U.K. Bribery Act, and Brazil’s Clean Companies Act. While there are similarities across the laws, it’s not a one-training-fits-all situation. Focusing only on the FCPA is no longer enough.

With that, we end this edition of the Compliance News in Review. Have a great Memorial Day everyone and for those who have served or serve now, we thank you!

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