Healthcare Fraud, Pharma Execs And Punishment | Pharma Marketer

The recent spate of settlements in which drugmakers are paying whopping fines after acknowledging off-label marketing is prompting a closer look at how and when individual executives may be held accountable for these episodes. The rationale is that big payouts are considered a cost of doing business and the c-suite feels no pain. Now, the FDA is eyeing criminal prosecutions, a move that has rarely been made (look here).

And last month, the House passed a bill that would ban corporate execs from doing business with Medicare and Medicaid if their companies were convicted of fraud (see this). But under what circumstances should the Department of Health and Human Services Office of Inspector General exclude an individual owner, officer, or managing employee of a drugmaker that has run afoul of the laws governing proper marketing?

In hopes of providing some insight, the OIG has just issued a guidance that lays out some of the issues to be addressed. The backdrop is federal law that offers two different justifications for exclusion. Individuals who have an ownership or controlling interest may be excluded if they knew or should have known of the conduct that led to the problem, while officers and managing employees may be excluded based solely on their position at the company.

The statute, as the OIG guidance notes, sets a “higher standard for exclusion of an owner, requiring evidence that the owner knew or should have known of the conduct that formed the basis for the sanction.” But there is no so-called knowledge element when it comes to execs. Therefore, the OIG “has the authority to exclude every officer and managing employee of a sanctioned entity.” Exclusions don’t have to be permanent, but such a move can effectively end the career of an exec who is, say, 50 years or older.

So which factors will the OIG consider? Here are a few…

Was there evidence that the misconduct resulted in actual or potential harm to beneficiaries or other individuals or financial harm to any federal health care program or any other entity? If financial loss to the programs or other persons occurred, what was the extent? Was the misconduct an isolated incident or part of a pattern of wrongdoing over a significant period of time? Has the entity previously had similar problems with OIG?

What is the individual’s current position? What positions has the individual held with the entity throughout his or her tenure, particularly at the time of the underlying misconduct? What degree of managerial control or authority is involved in the individual’s position? What was the relation of the individual’s position to the underlying misconduct? Did the misconduct occur within the individual’s chain of command?

via pharma-marketer.com

Posted via email from Jack's posterous