Monday, November 22, 2010

Pharma’s Wake-Up Call: More Individuals, More Often

Today’s topic of conversation: Why the DOJ has begun focusing on pharma execs -- and not just their companies.

Just recently, the feds announced they don’t want pharma executives doing business with the U.S. government if their company has been convicted of ripping off Medicare -- which is above and beyond existing legal restrictions.

According to the Washington Post, the new DHS guidelines say executives can be barred from doing business with the federal government from the time they knew about the fraud, or if the inspector general determines the executive should have known about the fraud.

And, in an unrelated, highly unusual move, the DOJ charged a former GSK attorney of various counts of fraud, alleging that she lied to federal authorities about what she knew regarding off-label promotion of Wellbutrin SR.

Let’s look at the numbers. According to these attorneys, who specialize in representing whistleblowers, “Over the past two years, the Department of Justice has collected over $2 billion from big pharmaceutical companies in fines, damages and civil penalties for defrauding Medicare and other health care programs funded with tax payer dollars.”
 That’s just the companies. Just think what the DOJ could collect if it also went after the execs. Think Jeff Skilling, Bernie Madoff, Michael Milken – who paid $600 million in fines for his financial sins.

According to the whistleblower attorneys, the DOJ doesn’t have to get personal. Under the False Claims Act, the offending pharma company could be forced to pay a $10,000 penalty for each script written under the offending scheme.

That’s certainly a lot of money – but it doesn’t have the same impact as being personally charged with a crime, or crimes.

"The current administration is feeling that they want to increase enforcement in this area, and they're of the belief that monetary settlements aren't sufficient, and they need to charge individuals to deter the conduct," Jeffrey Senger, former acting chief counsel with the FDA, told the Washington Post.

“The theme of [a] drug-law industry conference last month was ‘more individuals, more often,’” wrote the New York Times.

For those industry members who aren’t reading the writing on the wall, it’s either time to get new glasses or a very good translator.

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