Mary Riordan, Senior Counsel at the US Health and Human Services Office of Inspector General (HHS-OIG) provided significant updates on current HHS-OIG initiatives, enforcement actions, and upcoming compliance guidelines during her presentation at the 25th Annual Pharmaceutical and Medical Device Ethics and Compliance Congress. The updates come as the OIG refines its approach to compliance, emphasizing actionable guidance for the pharmaceutical and medical device sectors.
Major Enforcement Actions and Key Settlements in 2024
Riordan’s presentation kicked off with a rundown of recent False Claims Act (FCA) settlements involving several high-profile pharmaceutical companies, many of which involved kickback-related violations. Among these were:
- Teva Pharmaceuticals USA Inc. faced two separate FCA settlements totaling $450 million, both addressing kickback-related issues.
- Ultragenyx Pharmaceutical Inc. settled a kickback-related FCA claim for $6 million.
- Endo Health Solutions Inc. entered a global resolution agreement, including a criminal plea and a $464.9 million bankruptcy settlement, in connection with allegations of improper marketing targeting high-prescribing opioid doctors.
These settlements underscore the OIG’s stance on combating illegal sales tactics, Riordan noted. Settlements like those with Nostrum Laboratories, Inc., involving potential liabilities up to $50 million, and smaller settlements with Alnylam Pharmaceuticals Inc. ($170,000) and Precision Dose Inc. ($75,000), emphasize the agency’s focus on compliance in Medicaid rebate reporting and timely drug price reporting.
OIG Reports and Insights: Drug Pricing, Reimbursement Policies, and Biosimilars
Riordan highlighted recent OIG reports aimed at improving transparency in drug pricing and reimbursement. One prominent report, issued in August, compared Medicare drug reimbursements under Part B and Part D, using the case of the autoimmune drug Stelara as an example. The report found that Medicare and enrollees faced substantially higher costs under Part D coverage than they would have under Part B.
Another report emphasized the cost-saving potential of biosimilars. OIG research found that, despite increased uptake, biosimilars could yield even more substantial savings if adoption rates rise or if alternative payment models incentivize their use in Medicare Part B.
New and Upcoming Compliance Guidance
In response to evolving compliance challenges, OIG is rolling out updated compliance program guidance documents aimed at specific industry segments. Building on the General Compliance Program Guidance (GCPG) issued in late 2023, OIG plans to introduce Industry-Specific Compliance Program Guidance (ICPG) documents in 2024 and beyond. The first ICPGs will target nursing homes and Medicare Advantage plans, followed by guidance for clinical laboratories and hospitals in 2025. Notably, an ICPG for pharmaceutical manufacturers is expected in 2026.
For those interested in shaping the content of these ICPGs, Riordan encouraged feedback from stakeholders. Comments and recommendations for these sector-specific guidelines can be directed to the OIG at Compliance@oig.hhs.gov.
2025 OIG Work Plan: New Areas of Focus
Looking forward, the OIG Work Plan for 2025 includes investigations in key areas affecting pharmaceutical compliance. Among these are:
- Medicare Part D coverage of weight-loss medications: The agency will examine drugs prescribed for both diabetes and weight loss, assessing if Medicare payments align with Part D requirements.
- FDA Oversight: Future OIG audits will scrutinize the FDA’s role in clinical trial result submissions and post-market safety evaluations.
Key Compliance Lessons and Guidance for Pharmaceutical Firms
Throughout her presentation, Riordan underscored the importance of robust compliance strategies, particularly in managing kickback risks associated with healthcare partnerships. Specific recommendations included:
- Centralized Financial Tracking Systems: Riordan advised companies to adopt tracking systems that monitor financial arrangements, including consulting fees, product licensing payments, and speaker programs.
- Speaker Program Caution: Noting past FCA settlements involving speaker programs, Riordan emphasized limiting programs to genuine educational settings and avoiding high-end venues that could undermine their educational intent.
- Drug Price Reporting: To avoid penalties, companies should ensure accurate reporting of drug prices, including rebates, under Medicare and Medicaid requirements.
OIG’s View on Compliance Leadership
OIG’s compliance program guidance emphasizes independent compliance leadership, discouraging companies from having compliance officers report to legal or finance divisions. Riordan stressed that effective compliance requires direct access to boards, with compliance committees actively supporting compliance officers rather than functioning as oversight bodies.
Compliance Officers’ Role in Patient Safety and Product Quality
Acknowledging the rising focus on patient safety, Riordan noted that compliance officers must collaborate with departments overseeing product quality. She highlighted OIG’s increasing concern for quality-related compliance, especially in life sciences, where product quality can have direct patient safety implications.
For Stakeholder Input
OIG invites healthcare providers, pharmaceutical companies, and other industry stakeholders to contribute to upcoming guidance documents. Those interested in submitting comments or feedback on what the pharmaceutical and medical device ICPGs should address are encouraged to contact the OIG at Compliance@oig.hhs.gov.
For additional details, Riordan’s full presentation is available on the OIG’s compliance guidance page at oig.hhs.gov/compliance/compliance-guidance.