Crackdown on the C-Suite - Pharmaceutical Executive

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Crackdown on the C-Suite


Pharmaceutical Executive


Do you prioritize your array of tools—selling meds, relinquishing exclusivity, holding individual executives accountable—in terms of severity. For example, if one doesn't work, then you go to the next? Or do you decide which to use based on the specific case?

We are going to look at the facts and the circumstances of a particular case, and decide which of our many tools will do the best job of protecting our beneficiaries and our program. But ultimately the Inspector General's Office is not here to mete out punishment. We are here to protect the integrity of the Medicare and Medicaid programs, to promote their efficiency and their effectiveness, and Congress has given us a mandate to remove from the program those who have abused our patients and demonstrated that they're not trustworthy.

How do you decide which cases to apply these responsible corporate official measures to? For example, what about the extensive off-label promotion of the atypical antipsychotics for the elderly in nursing homes, which may be responsible for a large number of deaths?

When we are trying to calculate an appropriate response to that sort of misconduct, one of the questions we ask is, "Did people get hurt?" In the Purdue executive case, one of the aggravating facts that we cited to justify the period of our exclusion was harm to patients. Now, I will tell you, just so the record's clear, that the Departmental Appeals Board concluded that we hadn't put forward sufficient direct evidence of patient harm—notwithstanding hundreds of newspaper articles about addiction and overdose.

These cases can present a real conundrum because physicians are free to prescribe a drug for any condition. So one of the causal connections that we have to establish is that but for the company's off-label marketing, the doctor would not have prescribed this drug. And it's often difficult to get a doctor to say, "I was duped. I just did what the drug company told me." More times than not, a doctor's going to say, "I knew exactly what I was doing. What, do you want me to get sued for malpractice? Are you nuts?"

The other causal connection we have to establish is between the bad act and the executives who are responsible, because in large corporations you've got lots of bureaucratic layers. So from a criminal standpoint, it can be extremely difficult to prove, beyond a reasonable doubt, that an executive broke the law unless you've got him on tape saying something. And most of them are too smart for that.

But in cases where we can show harm to a patient—such as ignoring black box warnings or marketing to a patient population that is specifically advised against—we can use the responsible corporate official statute.

How do you get information about potential cases of serious healthcare fraud, kickbacks, and the like?

Most notable is the whistleblower. The False Claims Act provides financial incentives for people to report fraud to the government. A significant part of our pharmaceutical fraud portfolio exists because people inside the company—salespeople, junior execs—have blown the whistle. The other way we build these cases is data mining. We're using highly sophisticated cutting-edge technology to identify aberrant practices and then start the process of investigating. If we see a substantial uptake in the prescription of a particular drug to a nursing home that wasn't present six weeks earlier, and we know that the drug is not approved for the main problems of the elderly, it doesn't mean it's illegal. Doctors could have decided they like it, but it might be worth dropping in on the nursing home. If the evidence shows that a salesman started coming in and handing out a brand of atypical antipsychotics like Chiclets, we might have ourselves a case.

It's been reported that the Purdue execs are appealing their exclusion. Do you think that once this new responsible corporate official initiative is set into motion, the courts will uphold the OIG judgments?

First, it's worth noting that while the Purdue executives are pursuing their appeal rights, which is absolutely appropriate, they are excluded right now.

Speaking more generally now rather than to the specifics of the Purdue case, the Supreme Court has a long history of ruling on administrative actions by federal agencies. There is very strong case law that lays out the criteria for evaluating whether an agency has acted arbitrarily and capriciously, whether it's provided adequate due process; and there is substantial deference to the agency's decision-making because the court recognizes that the agency is the expert.

The exclusion authority we've been talking about has been on the books for decades. We have a remarkably successful track record of pursuing these cases and being upheld, both at the Departmental Appeals Board and in District Court. I have a CrackerJack group of 75 lawyers who just love a challenge. So if a pharma exec wants to challenge his exclusion or in any way contest the merits of his criminal conviction, we welcome that.

Do you expect this new initiative to be at all controversial? How do you think the American people will look at top executives being given the boot because the corporations they run are engaged in fraudulent practices that harm patients?

Well, based on the reaction that we've gotten on the Hill, when people learned about the $2.3 billion Pfizer case, we weren't sent roses and congratulatory notes, we were asked, "Where were the executives?" And to take that a step further to your point about when you market a drug to a population which is highly vulnerable, and the FDA has told you not to, and it kills people, I'm guessing that the American population isn't going to have a lot of sympathy for a $500,000 exec who has now been told to get back to selling vinyl siding. That's my opinion, not necessarily the views of the Inspector General or the Department of Justice.

So the take-home message is that no one should be surprised if we begin to see executives having to take the rap. How soon? In the near future?

I would say in the middle future. And I want to stress that we're not just a bunch of cowboys here. Our job is to do justice—by assessing the facts and circumstances of each individual case. We need to be fully informed of the history of the case. A lot of the matters that come to us have been largely investigated as criminal frauds. Much of the information is grand jury testimony, and thus secret. So we start at somewhat of a disadvantage because we may not have the full story. And if we're going to do something as significant as potentially deprive an individual of his or her livelihood, we want to make sure we're doing the right thing.

So we will be approaching this with respect and caution to ensure that we do justice. But as we talked about at the beginning of this interview, we're coming to the conclusion that when a company has entered into a criminal disposition of its conduct and it's simply writing yet another check, we may not be getting the necessary message across to the company and its executives. I cannot tell you that we're going to do this in every case, because that would be foolhardy. But I hope that I have made it very clear that if what we're doing now isn't working, we're going to explore other options.


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