Transcript Enforcement Trends in the Pharmaceutical Industry

Enforcement Trends in the
Pharmaceutical Industry
Lewis Morris
Chief Counsel
Office of Inspector General, DHHS
Overview
Review of OIG work related to Medicaid
and Medicare Part B drugs
 Describe OIG priorities in response to
MMA
 Discuss preventative measures you
may wish to consider

Review of 340B Drug Prices

Objective: determine if 340B drug pricing
program participants received the required
discount prices.

Method: compare CMS’ calculations of the
ceiling price to the invoice prices paid by 37
sampled providers.

Findings: Identified significant discrepancies
between invoice prices and 340B ceiling
prices.
Review of 340B Drug Prices


Problems identified with the underlying data
after the report’s release
 OIG was given ceiling prices for the wrong
time period
 Questions regarding application of
package size information in the ceiling
price calculation
Conducting a more systemic review of the
accuracy and completeness of the data used
to calculate 340B prices
Completed MMA-related Work
Civil Monetary Penalties related to
Medicare-endorsed drug discount cards.
 Guidance on outreach efforts between
endorsed card sponsors and network
pharmacies.
 Review of end stage renal disease
(ESRD) drug costs

Additional OIG Work Related to MMA
Monitoring Part B Prices (AWP Reform)
 Utilization of Drugs and Services
 Access to Drugs
 Competitive Bidding Process
 Part D Drug Benefit
 Calculation of Aver. Mnf. Price

Troubling Industry Practices
Misreporting wholesale prices and
marketed the “spread”
 Suppressing negative research findings
on a product
 Knowingly failing to report price
concessions made to purchasers
 Offering and giving physicians
kickbacks to induce the ordering of
products

Additional Troubling Practices
“Wining and dining” high prescribers
 Excessive consultant fees
 Free samples that are to be billed to the
health care programs.
 Illegal promotion of off-label uses
 Part D Discount card fraud
 Providing bogus research grants
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Suggested Compliance SelfAssessment Questions
Does the compliance office substantial
authority and adequate resources?
 Is the board of directors well informed
about the compliance function?
 Has the company too narrowly
construed the compliance function?

Suggested Compliance SelfAssessment Questions
Has the organization inappropriately
limited what are considered “compliance
issues”?
 Have you considered the structure of
the organization when designing
compliance training?
 Do you know your company’s pricing
practices and systems?

Suggested Compliance SelfAssessment Questions
Do you understand the marketing
techniques available to your sales force,
and the procedures required to use
those tools?
 Do you know what message is being
delivered about your products?
 What steps are taken in instances of
non-compliance?
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