Transcript Slides

Advanced Enforcement
Applications
Enforcement
Litigation and
Compliance
Washington, DC
December 9-10, 2015
Brian Dahl, Principal, Dahl Compliance Consulting
LLC
Sarah diFrancesca, Attorney, Cooley LLP
James Flaherty, Associate General Counsel – FDA
Regulatory, Fresenius Medical Care North America
Beth Weinman, Associate Chief Counsel for
Enforcement, Office of Chief Counsel, FDA
Moderated by Neil DiSpirito, Partner, Olsson Frank
Weeda Terman Matz PC
Implications of Transparency
Brian A. Dahl
Open Payments
Implications of Transparency
• Penalties for What is Not Reported
– $1,000-$10,000/transaction up to $150,000
– $10,000-$100,000/transaction up to $1 million
• Penalties for What Is Reported
– Kickbacks
– False Claims
Case Study: Insys Therapeutics
Case Study: Insys Therapeutics
Case Study: Insys Therapeutics
Case Study: Insys Therapeutics
Top 10 Physicians for Speaker / Consulting Fees
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$64,315
$61,232
$53,085
$46,452
$43,513
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10.
$43,154
$41,400
$41,225
$37,382
$36,448
Case Study: Insys Therapeutics
Case Study: Insys Therapeutics
Case Study: Insys Therapeutics
Case Study: Insys Therapeutics
http://sirf-online.org
Case Study: Insys Therapeutics
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Case Study: Insys Therapeutics
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TRICARE
Prescriptions
1/1/13-5/31/14
Case Study: Insys Therapeutics
• Company Announced Subpoenas
– OIG December 2013
– U.S. Attorney District of MA September 2014
• 6 Other States Reportedly Investigating
Advanced Enforcement
Applications
Government Drug Pricing Inquiries
Sarah K. diFrancesca
Cooley LLP
Significant Media Attention
Drug Pricing Inquiry Timeline
July 2014
Gilead receives
letter from
Senators
Wyden and
Grassley,
Senate
Committee on
Finance,
requesting
documents
related to
Sovaldi, priced
at $1,000/pill
($84,000/
course of
treatment)
April 2015
May 2015
July 2015
WSJ article
discussing
Valeant’s
strategy to
buy drugs
and
immediately
increase
prices
significantly
House Govt.
Reform and
Oversight
Committee
Ranking
Member
Cummings
sends
Chairman
Chaffetz a
letter
requesting
that the
Committee
hold a hearing
in which
Valeant and
Turing CEOs
testify
Valeant CFO
questioned by
Senate’s
Homeland
Security &
Governmental
Affairs
Permanent
Subcommittee
on
Investigations
regarding
price
increases
Summer 2015
Valeant
continues to
come under
fire for taking
significant
price
increases on
several
additional
drugs
August 2015
August 2015
September 2015
September 2015
Valeant receives
letter from
Senator McCaskill,
Ranking Member,
Senate Homeland
Security &
Governmental
Affairs Permanent
Subcommittee on
Investigations,
requesting
information
regarding
Valeant’s drug
price increases
Valeant and
Hospira receive
letters from Rep.
Cummings and
Sen. Sanders
requesting
information
regarding
Valeant’s drug
pricing practices
Turing receives
letter from
Rep.
Cummings and
Sen. Sanders
requesting
information
regarding
Turing’s drug
pricing
practices
Valeant
receives second
letter from
Senator
McCaskill, again
requesting
information
due to
Valeant’s
“failure to
respond
substantively”
to the August
15, 2015 letter
Drug Pricing Inquiry Timeline (cont.)
September 2015
18 members of
the House
Committee on
Oversight and
Government
Reform send a
letter to the
Committee
Chairman,
requesting that
he subpoena
documents that
Valeant refused
to turn over to
the Committee
in response to
the August 2015
letter
October 2015
Valeant
announces
receipt of
subpoenas
from DOJ and
U.S. Attorneys’
Offices in NY,
Massachusetts,
Pennsylvania
related to
pricing, patient
assistance, and
related areas of
interest
October 2015
Merck and Eli
Lilly each
announce
receipt of CIDs
from the DOJ
and U.S.
Attorneys’
Office in E.D.
of
Pennsylvania
related to drug
pricing,
contracting
and Medicaid
reporting
practices
November 2015
Senate
Committee on
Aging issues
letters to
Valeant, Turing,
Retrophin,
Rodelis
Therapeutics
regarding
Committee’s
“comprehensive
investigation”
into the pricing
of off-patent
drugs.
Document
response due
December 2,
2015
November 2015
Democratic
members of
the House
Committee on
Oversight and
Government
Reform form
the Affordable
Drug Pricing
Task Force
Chairman
Chaffetz agrees
to hold
hearings in
early 2016.
Valeant and
Turing are
anticipated
targets
November 2015
December 2015
December 2015
Democratic
members of
House Ways
and Means
Committee
send letter to
Chairman
Brady
requesting an
“immediate
hearing” into
prescription
drug costs
Initial hearings
by Senate
Committee on
Aging issues
scheduled
Senators
Wyden and
Grassley,
Senate
Committee on
Finance,
release a 144page report
and thousands
of Gilead
documents
produced to
the Committee
as part of its
18-month
investigation
Areas of Congressional Focus
• Senate Finance Committee
– “Senators Wyden and Grassley have raised the following policy questions
for public debate, with the goal of improving wider access to effective and
affordable drug treatments”
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What are the effects of a breakthrough, single source innovator drug on the marketplace?
Do the payers in the programs have adequate information to know the cost, patient
volume, and increases in efficacy of a new treatment regimen?
What role does the concept of “value” play into this debate, and how should an innovative
therapy’s value be represented in its price?
What measures might improve price transparency for new higher-cost therapies while
maintaining incentives for manufacturers to invest in new drug development?
What tools exist, or should exist, to address the impact of high cost drugs and
corresponding access restrictions, particularly on low-income populations and state
Medicaid programs?
Areas of Congressional Focus
• Senate Committee on Aging
– Substantial price increases on recently acquired offpatent drugs
– Mergers and acquisitions within the pharmaceutical
industry that have sometimes led to dramatic price
increases for off-patent drugs
– FDA’s role in the drug approval process for generic
drugs, FDA’s distribution protocols, and off-label
regulatory regime
Political Focus
• Presidential candidates also jumping on the drug
pricing bandwagon. Dem. Candidate Hillary
Clinton’s plan to lower drug prices includes:
– “eliminate corporate write-offs for direct-to-consumer advertising”
– “establish a mandatory FDA pre-clearance procedure for these [DTC] ads funded
through user-fees paid for by pharmaceutical manufacturers”
– “require health insurance plans to place a monthly limit of $250 on covered out-ofpocket prescription drug costs for individuals”
– Lower “the biologic exclusivity period from 12 to 7 years”
– “require drug manufacturers to provide rebates for low-income Medicare enrollees”
– “Allow Medicare to negotiate drug and biologic prices”
State Legislation
• Legislation introduced in several states
(CA, MA, NY, NC, OR, PA) that would
require pharmaceutical manufacturers to
submit reports to the state outlining the
total cost of drug production, including
marketing costs
Industry Outlook
• Companies cutting prices in response to
backlash
• Federal and state legislation
• Outcome of congressional inquiries
• Outcome of DOJ investigations
FDLI Enforcement, Litigation, and
Compliance Conference
FDCA Criminal Investigations
December 9, 2015
Beth P. Weinman
Office of the Chief Counsel, Food and Drug Administration
Food & Drug Administration
Office of Chief Counsel
•
FDA’s Office of the Chief Counsel (OCC) is composed of litigators,
counselors, and support staff.
•
Litigators handle both civil and criminal enforcement cases, and
defend challenges to provisions of the Federal Food, Drug, and
Cosmetic Act (FDCA), the implementing regulations, and FDA
policies, initiatives, and decisions.
OCI Investigations
•
On the criminal side, OCC litigators counsel Office of Criminal
Investigations (OCI) agents in their investigations and advise the
Department of Justice in its prosecutions related to FDA regulated
products.
•
In criminal prosecutions, OCC litigators have served as Special
Assistant United States Attorneys, assuming primary responsibility
for prosecuting violations of the FDCA or related statutes.
Individual Accountability
One of the most effective ways to combat corporate misconduct is by
seeking accountability from the individuals who perpetrated the
wrongdoing. Such accountability is important for several reasons: it
deters future illegal activity, it incentivizes changes in corporate
behavior, it ensures that the proper parties are held responsible for
their actions, and it promotes the public's confidence in our justice
system.
--September 9, 2015 Memorandum Issued by Sally Quillian Yates, Deputy
Attorney General
Individual Accountability
“Hardship there doubtless may be under a statute which thus penalizes
the transaction though consciousness of wrongdoing be totally wanting.
Balancing relative hardships, Congress has preferred to place it upon
those who have at least the opportunity of informing themselves of the
existence of conditions imposed for the protection of consumers before
sharing in illicit commerce, rather than to throw the hazard on the
innocent public who are wholly helpless.”
--U.S. v. Dotterweich, 320 U.S. 277, 284-285 (U.S. 1943)
Individual Accountability
“Thus Dotterweich and the cases which have followed reveal that in
providing sanctions which reach and touch the individuals who execute
the corporate mission…the Act imposes not only a positive duty to seek
out and remedy violations when they occur but also, and primarily, a
duty to implement measures that will insure that violations will not
occur. The requirements of foresight and vigilance imposed on
responsible corporate agents are beyond question demanding, and
perhaps onerous, but they are no more stringent than the public has a
right to expect of those who voluntarily assume positions of authority in
business enterprises whose services and products affect the health and
well-being of the public that supports them.” (emphasis added)
--U.S. v. Park, 421 U.S. 658, 672 (1975)
FDLI Enforcement, Litigation, and
Compliance Conference
Advanced Enforcement Applications
December 9, 2015
James M. Flaherty, Jr.
Associate General Counsel – FDA Regulatory
Fresenius Medical Care North America
Why Am I Here?
• Not here to debate policy issues behind FDA
priorities and initiatives
• Not here to explain what to do once an FDA
investigation is initiated
• Here to discuss prevention – achieving and
maintaining corporate (and individual) compliance
Focus On The Individual
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Park Doctrine and Yates Memo
Knowledge is Key!
Never Attempt to Shield/Insulate Executives
Education and Training
Metrics, Scorecards, and Culture
• Speak the Executives’ Language
• Corporate Compliance = Good Business
– Legal and Compliance as business partners
• Quality metrics adapted for business audience
• Utilize summary scorecards – simple and easy
Compliance “Tools”
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Big Data and Predictive Analytics
Safe Islands for Sales Reps
Quality Systems Approach to Training
Newsletters, Recognition, and Awards
3 Pillars of Corporate Healthcare
1. Patient Care
2. Legal/Regulatory Compliance
3. Business Success