Enforcement Trends in the Pharmaceutical Industry

1
Enforcement Trends in the Pharmaceutical Industry

• Lewis Morris
• Chief Counsel
• Office of Inspector General, DHHS

2
Overview

• Review of OIG work related to Medicaid and
  Medicare Part B drugs
• Describe OIG priorities in response to MMA
• Discuss preventative measures you may wish to
  consider

3
Review of 340B Drug Prices

• Objective determine if 340B drug pricing program
  participants received the required discount
  prices.
• Method compare CMS calculations of the ceiling
  price to the invoice prices paid by 37 sampled
  providers.
• Findings Identified significant discrepancies
  between invoice prices and 340B ceiling prices.

4
Review of 340B Drug Prices

• Problems identified with the underlying data
  after the reports release
• OIG was given ceiling prices for the wrong time
  period
• Questions regarding application of package size
  information in the ceiling price calculation
• Conducting a more systemic review of the accuracy
  and completeness of the data used to calculate
  340B prices

5
Completed MMA-related Work

• Civil Monetary Penalties related to
  Medicare-endorsed drug discount cards.
• Guidance on outreach efforts between endorsed
  card sponsors and network pharmacies.
• Review of end stage renal disease (ESRD) drug
  costs

6
Additional OIG Work Related to MMA

• Monitoring Part B Prices (AWP Reform)
• Utilization of Drugs and Services
• Access to Drugs
• Competitive Bidding Process
• Part D Drug Benefit
• Calculation of Aver. Mnf. Price

7
Troubling Industry Practices

• Misreporting wholesale prices and marketed the
  spread  
• Suppressing negative research findings on a
  product
• Knowingly failing to report price concessions
  made to purchasers
• Offering and giving physicians kickbacks to
  induce the ordering of products

8
Additional Troubling Practices

• Wining and dining high prescribers
• Excessive consultant fees
• Free samples that are to be billed to the health
  care programs.
• Illegal promotion of off-label uses
• Part D Discount card fraud
• Providing bogus research grants

9
Suggested Compliance Self-Assessment Questions

• Does the compliance office substantial authority
  and adequate resources?
• Is the board of directors well informed about the
  compliance function?
• Has the company too narrowly construed the
  compliance function?

10
Suggested Compliance Self-Assessment Questions

• Has the organization inappropriately limited what
  are considered compliance issues?
• Have you considered the structure of the
  organization when designing compliance training?
• Do you know your companys pricing practices and
  systems?            

11
Suggested Compliance Self-Assessment Questions

• Do you understand the marketing techniques
  available to your sales force, and the procedures
  required to use those tools?
• Do you know what message is being delivered about
  your products?
• What steps are taken in instances of
  non-compliance?

12
(No Transcript)