Compliance challenges, evolving rules and regulations, building a data-driven compliance program, and false claims that lead to indictment and penalties continue to be trending topics in the world of compliance.
The Department of Justice (DOJ) recovered over $3 Billion from the False Claims Act case in the fiscal year 2019.
Of the more than $3 billion settlements and judgments recovered by the DOJ, $2.6 billion were associated with the healthcare industry, drug and medical device manufacturers, pharmacies, life sciences, physicians, and more.
As severe as this may sound, the verdict behind the stories/cases remains the same: ensuring compliance with the rules and regulations enacted by the government is a high-priority concern for compliance professionals and life sciences.
The tales we’re about to discuss today indicate the importance of building a data-driven compliance program, ensuring a centralized platform where the data is being collected, analyzed, and validated, and focusing on making compliance an effective function that protects an organization from legal and reputational damage.
So, what lessons can you learn from the guidance and settlements from the DOJ?
Let’s dive into the details and derive actionable insights.
The DOJ’s Perspective
The DOJ seems to have a radar on the life sciences segment, and the government’s expectations keep rising with evolving compliance rules and regulations, investigations, and recoveries such as the one mentioned earlier.
Compliance professionals today must understand that they need to provide optimum transparency to the government regarding how the life science or pharmaceutical company functions while disclosing all third-party interactions.
Reckitt Benckiser Group
Under the civil settlement, RB Group agreed to pay a total of $700 million to resolve the claims that the “Suboxone” marketing caused false claims to be submitted to government healthcare programs.
This amount included $500 million to be paid to the federal government and $200 million to be paid to states that opted to participate in the agreement. This was by far the largest recovery for an opioid case in the U.S.
The company directly and via subsidiaries promoted opioid addiction treatment drugs that they called “Suboxone” to physicians, leading them to write prescriptions for unsafe and ineffective uses.
There has been no determination of liability, and the claims settled by the civil agreement are allegations only. In addition, misleading statements were made by the company as they pushed Suboxone as a less abusable drug as compared to other options.
What’s even more alarming is that the drug manufacturers knew that Suboxone was being prescribed without any counseling or support and for uses outside of its legitimate use.
The “Here to Help” program was meant to support opioid addicts, but the investigation found that it was designed to connect the company with physicians ready to prescribe their drug.
Insys Therapeutics
Insys Therapeutics, a pharmaceutical company that develops and commercializes supportive care products, paid $195 million to settle civil allegations regarding kickbacks to providers for prescribing fentanyl to patients.
According to officials, these kickbacks involved sham speaker events, exorbitant meals, entertainment, etc. Speaker programs were used as covers for educating prescribers and were identified as a means to pay bribes and kickbacks.
Prescribers were incentivized to provide prescriptions to the patients, and investigations found that the prescriptions were medically unnecessary and reckless to the welfare of patients.
Moreover, the DOJ also won criminal convictions against eight executives of Insys Therapeutics.
Avanir Pharmaceuticals
Avanir is yet another company that faced charges of kickbacks to physicians because of inducing prescriptions for their drug “Nuedexta.”
This company paid over $108 million in criminal penalties and civil damages. Besides the settlement, the company’s former employees and top prescribers involved in this case were also indicted.
False claims and misleading marketing of the product were also a part of the case as the company introduced it as a long-term care (LTC) facility for dementia cases; however, this usage was never approved.
The Lesson Learned from These Settlements?
There are extremely valuable takeaways from these cases, with the #1 takeaway being that the rules and regulations enacted by the government are not to be violated at any cost. Drug and device manufacturers need to realize that the DOJ is ready to prosecute any organization that fails to meet the standards set by the government.
In addition, these cases also showcase the strength of whistleblowers who leaked the information to the prosecutors, leading to the company facing lawsuits and indictments.
To avoid such instances, Life Sciences need to think beyond compliance and abide by the obligations provided by the government.
In the DOJ’s updated guidance, they provided a blueprint to drug and device manufacturers that can be used to design a data-driven compliance program.
Adapting to the modern approach toward mitigating compliance risks, compliance professionals must leverage data-driven compliance platforms to reduce pressure on internal teams and meet stringent compliance demands and heightened expectations.
Contact us today if you want to learn more about how a data-driven compliance platform helps you stay compliant.
