On January 12, 2017, the U.S. Department of Justice (DOJ) announced publicly that Zimmer Biomet Holdings, Inc. (Zimmer BioMet) had agreed to pay a $17.4 million criminal penalty “in connection with a scheme to pay bribes to government officials in Mexico and for violations of the internal controls provisions of the Foreign Corrupt Practices Act (FCPA) involving the company’s operations in Mexico and Brazil.” This is not the first time BioMet faced allegations involving its business practices in foreign countries, and in 2012 entered a deferred prosecution agreement (DPA). The BioMet settlement highlights the significant liability life health science companies face when failing to adhere to DPAs and how large-scale settlements are used by the government to ensure industry compliance.
The Deferred Prosecution Agreement (“DPA”) is one weapon in the U.S. Department of Justice’s (“DOJ”) arsenal for combating healthcare fraud. It is an arsenal that also includes Corporate Integrity Agreements (‘CIAs”), civil fines and forfeitures, criminal penalties and of course, program exclusions. More specifically, a DPA is defined as contracts under which the Government “agrees to forego an enforcement action against a cooperator if the individual or company agrees to cooperate fully and truthfully and comply with express prohibitions and undertakings during a period of deferred prosecution.” A DPA is slightly different than a Non-Prosecution Agreement (“NPA”), which is an agreement entered into in limited circumstances, where the Government “agrees not to pursue an enforcement action against a cooperator if the individual or company agrees to cooperate fully and truthfully and comply with express undertakings.”