Compliance News in Review, February 15, 2016

Ah, l’amour! It is the stuff of literature, song, poetry, and this time of year, greeting cards galore. Some might refer to Valentine’s Day as a “Hallmark Holiday,” but any day that makes the consumption of chocolate practically mandatory is okay by us. Valentine’s Day…a day to do something special for that special someone and/or the special people in your life. While it may not be as exciting as the dozen roses or heart-shaped box of candy you received, we offer a valentine of our own, with this edition of the Compliance News in Review.

If the cliché, “sharing is caring,” is true, CMS is ready for life sciences companies to commence with their annual caring. The Open Payments system is now accepting registrations, registration certification, and data submissions.

Sweet nothings, or any other comments for that matter, were definitely not whispered by Martin Shrkeli at a recent Congressional hearing into extreme drug price increases by his former company, Turing. Shrkeli was questioned and lectured by members of Congress, but he continually stated that he was invoking his Fifth Amendment right to not incriminate himself by testifying. Following the hearing, he took to Twitter, where he referred to the members of Congress as “imbeciles.” Valeant Pharmaceuticals CEO, Howard Schiller, did testify, and spoke of efforts his company was making to respond to the outrage over extreme price increases.

We just received a veritable bouquet of bills from the Senate Health, Education, Labor, and Pensions (HELP) Committee. The Committee passed seven bills as part of the House of Representatives’ 21St Century Cures. The seven bills are intended to increase funding for medical innovation and streamline requirements for new drug approvals. HELP members spend the better part of year deadlocked over increased NIH funding and regulatory changes for drug approvals, so chairman Lamar Alexander created the smaller measures to move the process forward.

It’s all candy hearts and flowers now between SciClone and the SEC. The company reached a $12.8 million settlement agreement with the SEC to resolve allegations it violated the FCPA. The DOJ chose not to pursue charges following its investigation. The allegations centered on the company’s actions in China. The government claimed the company provided gifts and travel for corrupt intent, failed to conduct proper due diligence of travel vendors who were used to funnel bribes to government officials, and failed to conduct an effective internal investigation when t learned of instances of bribery.

The SciClone case points out the need for a robust anticorruption program. SciClone employees provided gifts, travels and expensive meals to government officials and their family members with a corrupt intent, and a vendor provided bribes as well. Due diligence and proper monitoring are key pieces of any anti-bribery program, but so is training. In-depth anticorruption training needs to be deployed to employees, vendors, and any third-party agents conducting business on the company’s behalf. Anyone who represents a company must understand who is considered a government official, what constitutes a bribe, and the types of activities that raise red flags. This is particularly important for pharmaceutical and medical device companies since healthcare professionals may fall under the broad umbrella of a government official. The feds are adding additional headcount to focus on FCPA investigations, so now is the time to evaluate, re-energize, and re-boot anticorruption training.

Have a great week everyone!

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