In today’s life sciences industry, mergers and acquisitions are becoming ever more prevalent as a means to ensure that strategic, operational, and financial goals are met, and that customers and patients have the products they need. The planning and execution of a partnership is often vetted thoroughly in terms of complementary product lines, financial goals, strategy for market presence, and access for those who need it.
So your Board of Directors and senior management just handed you the keys to a brand-new, shiny compliance program. It conforms to the seven elements of the OIG Guidance for implementing an effective compliance plan. You’ve been designated as the chief compliance officer with single-point accountability for managing the day-to-day operations of the compliance program (No. 1). You’ve approved written policies and procedures for implementing your compliance program (No. 2). You’ve developed and trained all relevant personnel on your compliance program (No. 3). You’ve implemented a hotline for employees to anonymously report putative compliance violations (No. 4). You’ve developed a comprehensive auditing and monitoring program, in partnership with Internal Audit and the company’s external auditors (No. 5). You’ve created a program to investigate and take corrective actions to remediate credible allegations (No. 6). And finally, you’ve demonstrated a track record of taking disciplinary action against transgressors (No. 7).
By Edward J. Buthusiem & Gary F. Miller, Jr.
Providing incentives to spur the development of new and novel drugs to combat rare diseases has historically posed a challenge to drug manufacturers, the FDA, the medical community, and—most important—patients afflicted with these diseases. Given the high and ever-increasing costs and challenges of drug development, combined with the relatively small number of patients that would be eligible to receive such treatments—which limits a company’s ability to recoup its R&D investment—pharmaceutical manufacturers have struggled with the economics of rare-disease drug development. The Orphan Drug Act, passed in 1983, was designed to address these concerns by providing incentives for pharmaceutical companies to develop drugs for uses for rare disorders or conditions. While the act was well intended, its application in practice has generated speed bumps as companies try to navigate through the waters of government reimbursement programs applicable to these drugs, as well as an unpredictable and often inconsistent DOJ enforcement pattern.
By Edward J. Buthusiem & Gary F. Miller, Jr.
The enactment of the Dodd–Frank Act was intended to provide the SEC with an important weapon in its mission to seek and vigorously prosecute the commission of securities and other types of frauds domestically and overseas. By providing to whistleblowers monetary incentives ranging between 10 percent and 30 percent of fines assessed, the whistleblower program has gained an element of popularity—some would say notoriety—amongst would-be reporters of putative wrongdoing. Recent Federal Court decisions, however, have created significant roadblocks that could blunt the Dodd–Frank juggernaut.
Mistakes are common. We all make them. According to my teenage kids, I make mistakes every single day! Some mistakes are benign; no one gets hurt. But some mistakes are costly and can lead to potentially catastrophic results. Whereas some individuals may have the luxury of making the same mistake twice, for many a single mistake may cause irreparable harm. Nowhere is this more evident than in the compliance field.
U.S. legislators and enforcement agencies have grown increasingly concerned with physician-owned distributors (PODs) and their relationship with hospitals and other providers. Because physicians may refer patients to hospitals—and use specific products in connection with such referrals—the government asserts that PODs have the potential to unduly influence physician decision making, encourage overutilization of certain products and services, create unfair competition and otherwise increase unnecessary healthcare spending by Federal programs.
U.S. and global regulators heavily scrutinize financial arrangements between healthcare professionals (HCPs) and life sciences companies, including orthopaedic manufacturers and distributors. Recent prosecutions and settlements involving drug and device manufacturers frequently allege that certain payments and other incentives provided to physicians are being improperly made in order to promote their products. Indeed, several prominent medical device companies have been subject to investigations and corporate integrity agreements stemming from alleged improper consulting payment arrangements with physicians.[^1]