This robust public policy discussion puts a spotlight on enforcement in the pharmaceutical sector — a major focus of federal regulators and law enforcement — while also incorporating perspectives of industry, outside counsel, academics and stakeholders.
The Departments of Justice and Health and Human Services levied a record $4 billion in fines, penalties and administrative resolutions in fiscal year 2010 from health care companies found to have defrauded Medicaid and Medicare. More than half that amount came from companies in the pharmaceutical sector.
But with success can come pressure to keep such numbers high, spurring increasing challenges from industry about the purpose and goals of enforcement. At the same time, new initiatives and laws like the Affordable Care Act stand to change the enforcement landscape in ways not yet fully understood.
The introductory half-day forum gave an overview of the history and purpose of government fraud and abuse efforts. The forum surveyed the laws used to combat fraud and abuse and assessed how they’re working, with an emphasis on the pharmaceutical industry.
Themes included the inherent tension between industry’s desire for clarity as legal standards evolve, and the government’s wishes for broad latitude in enforcing anti-fraud laws.
King & Spalding’s Christopher Wray, a former Assistant Attorney General for the Criminal Division, participated in a Q&A session with Rx Compliance Report’s Matthew Hay. Panelists included John J. Pease, Assistant U.S. Attorney and chief of health care fraud in the U.S. Attorney’s Office of the Eastern District of Pennsylvania; Larry Freedman of Patton Boggs LLP, a qui tam expert who was an assistant director and trial attorney in the Civil Fraud Section of the Department of Justice from 1991 to 2005; University of Minnesota Professor Ralph F. Hall, counsel to the law firm of Baker & Daniels LLP and a frequent writer on topics from the False Claims Act to Food and Drug Administration regulation; and Nielsen Hobbs, Editor of The Pink Sheet.
- The False Claims Act. How the Civil War-era anti-fraud whistleblower statute became a potent tool to recover billions from health care providers, pharmaceutical companies and medical device manufacturers.
- The Anti-Kickback Statute. The law against providing remuneration to health care providers to make referrals for products or services raises a raft of thorny legal issues about financial relationships in the health care industry.
- Food and Drug Cosmetic Act. 1962 amendments to the 1938 Food Drug and Cosmetic Act for the first time required pharmaceutical companies to submit evidence of drug efficacy as well as safety. These 1962 amendments still substantially regulate drug research and development t0day.
- Medicare Modernization Act. This eight-year-old law gave the Department of Health andHuman Services Office of Inspector General new tools to examine pharmaceutical pricing. It’s created a successful new avenue for criminal referrals stemming from OIG analysis of pricing.
- Affordable Care Act. The new health care law strengthens the HHS OIG’s ability to impose civil and monetary penalties fraud, and authorizes an additional $350 million for prosecution and investigation. It also eliminates requirements that providers be found to have knowingly and intentionally committed fraud, making it easier to pursue enforcement actions but raising questions about theories of accountability.