Life Science Compliance Update

September 22, 2017

To Disclose or Not to Disclose… That is the Question: The DOJ’s FCPA Pilot Program – Insights from Year One and Beyond


It has been over one-year since the US Department of Justice has launched its pilot program aimed to incentivize companies to self-report potential Foreign Corrupt Practices Act violations. Since its launch on April 5, 2016, the Justice Department resolved nine investigations. However, the question still remains – “Is the carrot bigger than the stick?” This article examines settlement trends before and during the Pilot Program to answer the question of whether or not it is sensible to self-disclose.

Last month, Sandra Moser, the acting chief of the DOJ’s Fraud Section made it clear that the DOJ would be increasing its enforcement efforts of healthcare related companies. Although life science companies have not been immune to Foreign Corrupt Practices Act (“FCPA”) investigations in the past, Moser stated that the DOJ viewed the healthcare industry as ‘one that faces serious compliance and corruption challenges not only in high risk markets overseas but right here at home as well.’ Simply put, life science companies will be under the FCPA microscope more than ever.

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September 20, 2017

False Claims Act Mid-Year Review: Significant Life Science Settlements, Post-Escobar Developments & Industry Round Up


Several significant False Claims Act settlements and judgments in the first six months of 2017 suggest this year will result in the eighth year of over $3 billion in FCA recoveries. Additionally, recent judicial decisions in FCA suits have further refined the test outlined in the Supreme Court’s 2016 Escobar decision, statistical sampling has resulted in significant FCA judgments, and the government continues to explore new frontiers for FCA liability.

The False Claims Act (“FCA”) continues to be a powerful tool for the government (and relators) to curb fraudulent conduct. FCA settlements and judgments to date in 2017 have surpassed $1.5 billion in recoveries. This rate suggests that for an eighth consecutive year the government is on track to collect more than $3 billion total from FCA cases.

As in the past, several significant FCA settlements and judgments this year have targeted the life science industry. Additionally, several decisions in the first half of 2017 helped refine the Supreme Court’s consequential Escobar decision, demonstrated willingness by the government to apply statistical sampling to calculate recoveries, and further refined the heightened pleading standards required for FCA suits. Finally, government scrutiny of pharmaceutical manufacturers related to donations to charitable patient assistance programs (“PAPs”) signals the possibility of burgeoning FCA risk and underscores the importance of compliance.

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September 18, 2017

Ohio Drug Distribution Verification: America’s Key Battleground State Shakes Up the Pharmaceutical Supply Chain


The pharmaceutical industry faces monumental challenges in the age of globalization within the United States: state laws and regulations that are more stringent than their federal counterparts. This article provides the historical context and current overview of Ohio’s laws, regulations, and sub-regulatory guidance concerning the distribution of prescription drugs, including drug samples, into and within the state, the verification requirements when distributing product to terminal distributors of dangerous drugs and prescribers, record retention responsibilities, and penalties for noncompliance. The article then examines the industry’s response from a major manufacturer, a distributor/third-party logistics provider, verification vendor, and compliance advisory vendors. It concludes with a call to action to the industry to form a new coalition to address state legislative and regulatory actions that have the potential to disrupt the entire supply chain.

The pharmaceutical industry faces a major dilemma: active state legislatures, administrative agencies, and state attorney generals. There is a plethora of reasons why states have turned their attention towards the manufacturers and trading partners, such as wholesale distributors and third-party logistics providers (“3PLs”). There is an opioid crisis gripping the nation, an ever-growing increase in healthcare costs, unstoppable negative publicity aimed at the pharmaceutical industry, an emboldened citizenry demanding their legislatures to do something, hospital and insurance lobbies joining the fight. As a result, state politicians are using all of this to their advantage to pass laws aimed at the industry.

This article discusses a law that has been on the books for over forty years, and amended numerous times, including a 2017 revision that lead to Ohio becoming pharma’s “key battleground state.”

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