“Off-label marketing is dead so-to-speak. There’s been a death knell of that.”
That news was delivered by Charlene Fullmer, Deputy Director of the Department of Justice’s Affirmative Civil Enforcement (“ACE”) unit in Philadelphia at the Pharmaceutical Compliance Congress and Best Practices Forum. Fullmer was joined by colleagues Kristen Williams and Jeff Steger for the AUSA panel, an annual event at the Compliance Congress that offers insight into what’s coming across the desks of top attorneys at the DOJ.
As Fullmer explained it, the DOJ continues to prosecute pharmaceutical companies for off-label marketing. However, the agency is seeing fewer cases involving large pharmaceutical companies and more off-label marketing by small companies and medical device manufacturers. The Eastern District of Pennsylvania is also seeing a lot of cases involving off-label promotion in exchange for kickbacks.
On the criminal side, Fullmer’s unit is expanding the strategies and theories it uses to investigate acquisitions and communications by acquired companies to purchasers related to ongoing litigation and off-label promotion of products. Besides investigating these acquisitions under the Food, Drug and Cosmetics Act, the agency is also looking at securities violations and conspiracy theories.
The DOJ is also working with the Department of Health and Human Services to prosecute pharmacy diversion cases. These cases are skyrocketing and taking a tremendous amount of the agency’s time and energy, said Williams, who is the Criminal Healthcare Fraud Enforcement Coordinator for the Assistant United States Attorney’s office in the Central District of California. “The amount of pills and dollars at issue are really astronomical.” Among the primary concerns for offices across the country are pharmacies that are selling large amounts of drugs and doctors who are prescribing large amounts of painkillers, including oxycontin and vicatin, and antipsychotics.
On the west coast, Williams is also seeing a great deal of counterfeit drug cases, pharmacy fraud, and fraud in the clinical trial setting. When it comes to counterfeit drugs, the DOJ is targeting illegally imported drugs that are being marketed stateside as home remedies and cures. Pharmacy fraud cases often involve restocking schemes and kickbacks wherein pharmacies are repackaging drugs returned by nursing homes and billing government health programs for the same drugs over and over again. Although some pharma companies are catching these problems early, the DOJ has also found that clinical trials are being contracted out to small groups that are not actually performing the trials and are simply stealing patients’ identities.
Across the country, when prosecuting cases, DOJ offices are focused on individual accountability, said Steger, Assistant Director of Consumer Protection and Litigation Branch of the DOJ’s Civil Division in Washington, DC. This comes after Deputy Attorney General Sally Yates’ September memo on pursuing cases against individuals responsible for corporate wrongdoing. “Attorneys in the department . . . we are taking it seriously,” said Steger. “Holding individuals culpable is incredibly important to the Department.”
According to Fullmer, the DOJ has always focused on individual accountability but has found it easier to prosecute individuals in smaller cases and companies because it’s easier to determine who was involved in the corporate wrongdoing. With larger scale investigations, it becomes more difficult. The DOJ is now taking a renewed look at how it can do a better job of addressing accountability and deterrence in cases involving larger companies.
Whether new or renewed, it’s important for compliance officers to understand what this policy means for pharma and device companies. You’ll find an in-depth look at the new memo and its implications in an upcoming issue of Life Science Compliance Update. Be sure to sign up to get your copy.