Healthy Skepticism Library item: 17656

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Electronic Source

Silverman E
Feds Consider Banning Execs For Fraud
Pharmalot 2010 Apr 20
http://www.pharmalot.com/2010/04/feds-consider-banning-execs-for-fraud/

Full text:

Drugmakers that repeatedly defraud the government may be forced to sell meds, relinquish product exclusivity, or fire execs and have them banned from working at other companies that do business with the government, Lewis Morris, the Health and Human Services Inspector General tells Inside Health Policy (subscription required).
The warning comes after a growing number of instances in which drugmakers have handed large fines for off-label promotion and concerns that large fines are considered to be a cost of doing business. In fact, Pfizer created a shell to pay its fine and avoid the possibility of being excluded from contracting with Medicaid and Medicare, a route the government has avoided over fears patients would be hurt (see here).
And so Morris tells IHP that he is aware of the concerns over fines and individuals need to be held accountable. So what might be done? One option is called the “responsible corporate official doctrine.” Prosecutors may not be able to prove individual execs directly participated in fraud, but if they were in a position of authority and responsible for company integrity and failed to stop fraud, they can be held accountable, IHP writes.
As IHP notes, holding a corporate exec accountable may mean using the IG’s “exclusion” authority, which involves banning drugmakers or execs from doing business with the government. One example – Purdue Pharma, which makes OxyContin. Three senior execs pled guilty to felony misbranding as part of a settlement, although they are now suing to overturn the IG decision to bar them from working at companies that do business with the government (see here).
The IG also is deciding whether it can force drugmakers to sell product, which would allow the government to keep products available. Another option is to threaten to take away product exclusivity that protects brand-name drugmakers from generic competition.
Patrick Burns of Taxpayers Against Fraud tells IHP that he doubts this last approach will work, because it relies on hurting companies financially, and that the only way to stop fraud is to hurt individual execs financially. “At some point the power of cheese isn’t enough and you need Cesar Millan,”
he said, referring to the celebrity animal trainer.