Crackdown on the C-Suite - Pharmaceutical Executive

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Crackdown on the C-Suite


Pharmaceutical Executive



Major Cases on the Current Docket
Under the terms of the CIA, the company agrees to a wide range of measures including hiring a compliance officer, putting in compliance committees, and doing internal audits and training. The objective is to help the company rebuild its corporate culture. So instead of thinking it's okay to steal from Medicare, they focus on selling good products.

When making the decision about whether to ban a company from Medicare and Medicaid, where do the interests of the patients fit in? If you exclude the company, don't you also exclude the drugs?

If the company is a maker of brand name drugs, they obviously have a stronger argument. If they're a generics manufacturer, they don't have that argument because someone else can step in tomorrow and fill that need. Interestingly, there is a more subtle response as well. We are considering a strategy that would say to a company, "All right, you have a particular life-saving drug and you're the only one that makes it. Sell it to somebody else. So you go out of business, but they'll pick up the cost and continue selling it."

What about the OIG's other options, such as relinquishing a drug's market exclusivity?

Well, if the reason a company illegally off-label-marketed its product was to gain a larger market share than appropriate prescribing would allow, they've basically cheated the marketplace. They've also put into circulation drugs not tested by the FDA. So we might say to the company, "You tried to cheat the market, so you have to agree to waive your exclusivity in return for not getting thrown out of our program."

There's also a third option. Let's say you're a big company and one of your subsidiaries is engaged in kickbacks to doctors or off-label marketing. We can tell the parent company, "You have to sell off that subsidiary, all of its trucks, loading docks, patents, microscopes, and everything else, because that part of your company was cheating our program and you don't get to continue to profit from that cheating." Those drugs that the subsidiary holds are valuable. Some other company will pick up the marketing rights. And if it takes six months to divest that subsidiary, we can give the parent company the six months. But at the end of six months, if you haven't divested, we're going to exclude.

We already do this to the large hospital chains like Tenet, which we believe has engaged in abusive behavior to patients, like invasive, medically unnecessary cardiovascular tests.

There's been talk that you're going to start going after individual executives at drug companies responsible for committing healthcare fraud. Is that true?

Yes. Part of our strategy is to say to companies, "It's not business as usual anymore." And the reason is that the first time around, we give everybody the benefit of the doubt. Everybody was entitled to make one mistake. And, particularly, in light of the importance of pharmaceuticals and the needs of our beneficiaries, that is a good policy.

However, when a company, for the second or third or fourth time, seems to have disregarded its commitment to integrity, we have to ask whether they're entitled to another bite of the apple.

We have been at this enforcement effort, this attempt to reform corporate cultures, for about a decade, and we can identify the recidivists. We've decided that we need to deal with them differently.


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