Compliance News in Review, August 21, 2017

Opioid investigations expand; the FDA plans drug advertising studies; DOJ units team up for healthcare sector FCPA investigations; the Sunshine Act is out in South Korea; and a big settlement could signal a new enforcement avenue; all casting a shadow in this edition of the Compliance News in Review.

Here comes the sun, and the moon, and a shadow. It’s eclipse fever! The total eclipse over the continental U.S. was one for the record books, and had people flocking to places like Alliance, NE, Hopkinsville, KY, and Red Bank, SC. If you couldn’t make it to the path of totality this time, you have seven years to plan for the next event.

The shadow of the investigation into the business practices opioid makers use continues to spread. In an SEC filing, Mylan revealed it has received a subpoena from the Department of Justice (DOJ) for information about its opioid business practices. The company, a relatively small player in the opioid market, said it is cooperating with the request.

The FDA, hoping to shed some light on disclosures in drug advertising, has proposed two studies that will focus on how safety information is perceived. The first study will involve patient recall of important safety information presented in print, direct to consumer ads. The second will include oncologists, primary care physicians, and non-oncology mid-level practitioners. It will focus on the effectiveness of disclosures related to preliminary or descriptive clinical and scientific data.

The DOJ’s Criminal Fraud Section announced a partnership between its Healthcare Fraud Unit’s Corporate Strike Force and Foreign Corrupt Practices Act (FCPA) prosecutors. Speaking at an anticorruption conference, the acting chief of the Criminal Fraud Unit said, “This increased coordination will ensure that companies, their executives, employees, and agents are held to account for the payment of bribes and kickbacks to foreign and domestic officials and actors regardless of the market.” He also urged companies to empower compliance teams to take steps to make their anticorruption programs better.

South Korea is the latest nation to bring sunshine to industry-physician relationships. The country has enacted a transparency law like the U.S. Sunshine Act. The law applies to pharmaceutical and medical device companies, and covers a wide range of recipients including pharmacists, herbalists, and acupuncturists, in addition to physicians. Transfers of value covered by the new law include product samples, academic conference sponsorships, food, beverage, and other items (e.g. pens, notepads). Transfers of value must be reported on one of seven reporting templates, and companies must begin collecting data on January 31, 2018.

Is a bad moon rising over industry relationships with patient assistance charities? Recently, United Therapeutics announced it had reserved $210 million in anticipation of a settlement with the government over activities involving a copay assistance charity. Other companies have disclosed that they are subject to investigations as well. Charities do not face the same restrictions as pharmaceutical companies when offering co-pay assistance and the contributions companies make to charities can be considered kickbacks. According to an attorney with Morgan and Morgan, the United Therapeutics announcement is likely to send “shock waves” through the industry.

With that, we end this shadowy edition of the Compliance News in Review. Until next time, we leave you with a total eclipse of the sun, er…Total Eclipse of the Heart.

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