Life Science Compliance Update

April 21, 2017

Going Back to the Roots of the False Claims Act - Baxter Settles cGMP Allegations

Reverse-whistle-CROP-1-red-lanyard-iStock_000004125034XSmall1

While False Claims Act cases are relatively common in the life science industry, FCA cases for cGMP violations are not. This article explores the most recent case involving Baxter Healthcare Corporation and some of its troubling implications.

It was the darkest hours of March 1863, and things were not going well for the Union Army. Confederate victories continued to pile up, and President Lincoln had yet to find a leader for the Army of the Potomac who could best Robert E. Lee. To make matters worse, there was a steady stream of reports coming from the front that the Union Army suffered from substandard equipment despite the mighty industrial advantage the North possessed. Wartime profiteering was at an all-time high.

A frustrated President and Congress decided to act, and on March 12, 1863, President Lincoln signed the False Claim Act (“FCA”) into law. At the heart of the new law was the concept of using rogues to catch the parasites by allowing private individuals to sue on behalf of the Government and then to share in the recovery.

To Read the Full Story, Subscribe, Download a Sample Issue, or Sign In
PM_LSCU_Box

April 04, 2017

DOJ Has Third Highest Annual Recovery in FCA History

O-PILES-OF-AMERICAN-MONEY-facebook

The United States Department of Justice has announced the fiscal year 2016 recoveries from civil False Claims Act. This article delves into the numbers, extracting those recoveries related to the healthcare industry, and comparing DOJ-brought suits versus whistleblower-brought suits.

The United States Department of Justice (“DOJ”) announced fiscal year (“FY”) 2016 recoveries from civil False Claims Act (“FCA”) cases mid-December 2016. The total, over $4.7 billion, includes both settlements and judgments and was the third highest annual recovery in FCA history. The 2016 recoveries brought the fiscal year average to nearly $4 billion since FY 2009, and a total of $31 billion has been recovered over the last eight fiscal years. 

To Read the Full Story, Subscribe, Download a Sample Issue, or Sign In
PM_LSCU_Box

February 06, 2017

Department of Justice Increases FCA Civil Penalties, Again

ITAR-violation-civil-penalty-increase-be59c7c6

On February 3, 2017, the Department of Justice (DOJ) announced that False Claims Act (FCA) penalties will once again be increasing, effective immediately. Pursuant to the 2015 budget bill, which requires annual re-indexing of FCA penalties for inflation, the minimum per-claim penalty will increase from $10,781 to $10,957 (it jumped from $5,500 to $10,781 last year). The maximum per claim penalty will increase to $21,916 (after jumping from $11,000 to $21,563 last year). The penalties will continue to be adjusted each year to reflect changes in the inflation rate, required to be done no later than January 15th of every year. Each agency is to publish regulations in the Federal Register that note the adjustment of civil monetary penalties (CMP) within its jurisdiction.

As we have previously written about in our sister publication, Life Science Compliance Update, the Bipartisan Budget Act of 2015 requires all federal agencies to increase the civil monetary penalties within their purview, an annual “cost-of-living-adjustment.” Prior to last year, the last time FCA penalties were adjusted was in 1986.

The cost-of-living adjustment is the percentage (if any) for each CMP by which the Consumer Price Index (CPI) for the month of October preceding the date of the adjustment (January 15) exceeds the CPI for the month of October in the previous calendar year.

These increases apply to any FCA penalties assessed, starting last Friday, for FCA violations that occurred on or after November 2, 2015. Violations that occurred from November 3, 2015 to February 2, 2017, will be assessed at last year’s rates. For any violations that occurred prior to November 2, 2015, the $5,500-$11,000 penalty range still applies.

While many predicted that the previous increase in FCA civil penalties created a situation ripe for constitutional challenges, we have not seen that play out. While this year’s increase is smaller than last year’s (i.e., doesn’t almost double from one year to the next), it is certainly still possible to see some court action on this move.  

Newsletter


Preview | Powered by FeedBlitz

Search


 
Sponsors
April 2017
Sun Mon Tue Wed Thu Fri Sat
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30