Pharmaceutical Compliance Forum September 11, 2012
Summary and Analysis of Recent DOJ Settlements John T. Bentivoglio / Skadden
Topics for Discussion •
Overview of Settlement Activity – 2011 v. 2012 (to date)
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Pharma/Device Settlements: Summary and Analysis – GSK – Abbott
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Key Take-Aways and Discussion
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Appendices: Excerpts of Alleged Misconduct – GSK Settlement – Abbott Note: Settlement Summaries Based on DOJ Statements and Publicly Available Settlement Documents
Recent DOJ Settlements (September 2012)
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Skadden, Arps, Slate, Meagher & Flom LLP
Pharmaceutical Settlements: 2011 Company
Allegations
Criminal Component
Total Recovery
Elan
Off-label promotion
Misdemeanor FDCA
EMD Serono
Inducements
None
$44,000,000
KV Pharma
GMP violations
None
$17,000,000
GE Health
AWP
None
$30,000,000
Genentech
Off-label promotion
None
$20,000,000
Merck
Off-label promotion
Misdemeanor FDCA
Novo Nordisk
Off-label promotion
None
$25,000,000
Pfizer
Off-label promotion
None
$14,000,000
Scios
Off-label promotion
Misdemeanor FDCA
$85,000,000
UCB
Off-label promotion
Misdemeanor FDCA
$35,000,000
Total (10)
Recent DOJ Settlements (September 2012)
$203,000,000
$950,000,000
$1.423 billion
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Skadden, Arps, Slate, Meagher & Flom LLP
Pharmaceutical Settlements: 2012 (to date) Company Allegations
Criminal Component
Total Recovery
Abbott
•Off-label promotion •Inducements
Misdemeanor FDCA
$1.5 billion
GSK
•Off-label promotion Misdemeanor FDCA •Safety data reporting •Inducements •Price reporting
$3 billion
Total
Recent DOJ Settlements (September 2012)
$4.5 billion
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Skadden, Arps, Slate, Meagher & Flom LLP
GSK Settlement •
Criminal: Three misdemeanor violations of the FDCA (two counts of misbranding, one of failing to report drug safety
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Fines and Penalties: $3 billion in criminal fines and civil penalties
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Products: – FDCA: Paxil, Wellbutrin, Avandia – Civil: 10 products
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Alleged Misconduct: – – – –
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Off-label promotion Failure to report safety data Financial inducements Price reporting
Compliance Obligations: – 5-year Corporate Integrity Agreement (including strict management accountability and oversight requirements seen in recent CIAs) – Requires changes in compensation of sales reps, recoupment of compensation of executives
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Recent DOJ Settlements (September 2012)
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Skadden, Arps, Slate, Meagher & Flom LLP
GSK Settlement -- FDCA
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Recent DOJ Settlements (September 2012)
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GSK Settlement – FDCA (cont’d)
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Recent DOJ Settlements (September 2012)
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GSK Settlement – FDCA (cont’d)
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Recent DOJ Settlements (September 2012)
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GSK Settlement – Civil
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Recent DOJ Settlements (September 2012)
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GSK Settlement – Civil (cont’d)
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Recent DOJ Settlements (September 2012)
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Skadden, Arps, Slate, Meagher & Flom LLP
GSK: Selected CIA Provisions •
Certain provisions apply to GSK PLC, reflecting trend in CIAs with ex-US companies
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New management oversight provisions, largely reflecting structural changes implemented prior to CIA signing – Compliance Committee co-chaired by GSK President – Deputy Compliance Officers – Integrity Champions
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Elimination of territory-based compensation for sales reps and immediate supervisors
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Provisions for recoupment of executive compensation
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Enhanced internal procedures and external disclosure requirements around publications, studies
Recent DOJ Settlements (September 2012)
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Skadden, Arps, Slate, Meagher & Flom LLP
Abbott Settlement •
Criminal: Misdemeanor violation of the U.S. Food, Drug & Cosmetic Act (FDCA)
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Fines and Penalties: $1.5 billion in criminal fines, civil penalties, and forfeiture
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Product: Depakote® (an atypical anti-psychotic), approved for certain epileptic seizures, bipolar mania, and prevention of migraines. Label (which expanded over time) has three boxed warnings.
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Alleged Misconduct: Promotion for unapproved uses (e.g., agitation in dementia, schizophrenia)
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Compliance Obligations: – 5-year Corporate Integrity Agreement (including strict management accountability and oversight requirements seen in recent CIAs) – Additional compliance program oversight and reporting obligations included as a condition of probation (this is new)
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Recent DOJ Settlements (September 2012)
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Skadden, Arps, Slate, Meagher & Flom LLP
Abbott: Summary of Allegations • • •
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Created long-term sales force to promote Depakote for nursing home patients, including for dementia and schizophrenia Promoted a side effect (somnolence or drowsiness) as a benefit for treatment of agitation Misled HCPs by selectively providing study results (i.e., providing studies with positive results while withholding negative studies). This occurred in distribution of reprints, medical info letters, and HCP-consultant meetings Held Speaker faculty meeting at which HCP/attendees were provided offlabel studies, including slides on such studies for later use in speaker programs Held consultant meetings at which off-label studies were presented; attendees were targeted based on sales force input Provided extensive off-label information to sales reps and encouraged them to use these materials in discussions with HCPs Allowed reps to obtain and distribute reprints that had been discontinued but were still available from contractor Recent DOJ Settlements (September 2012)
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Recent DOJ Settlements (September 2012)
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Recent DOJ Settlements (September 2012)
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Recent DOJ Settlements (September 2012)
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Recent DOJ Settlements (September 2012)
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Recent DOJ Settlements (September 2012)
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Recent DOJ Settlements (September 2012)
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Recent DOJ Settlements (September 2012)
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Skadden, Arps, Slate, Meagher & Flom LLP
Abbott: CIA Provisions
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5-year CIA requires, among other things, that Abbott's board of directors review the effectiveness of the company's compliance program, that highlevel executives certify to compliance, that Abbott maintain standardized risk assessment and mitigation processes.
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Extensive monitoring provisions (similar to other recent pharma CIAs) around: – Speaker programs (150 live audits/year) – Sales force activities (50 ride-alongs/year) – Consultant arrangements (50 reviews/year) – Publications (30 reviews/year) – Medical education grants (30 reviews/year) – Research activities (30 researcher, 15 investigator reviews)
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Requires disclosure of payments to HCPs
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Retention of IRO, extensive transaction and systems reviews Recent DOJ Settlements (September 2012)
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Skadden, Arps, Slate, Meagher & Flom LLP
Abbott: CIA Provisions (cont’d) •
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Plea agreement includes unique compliance obligations as a condition of probation. Under the agreement (pp 8-12 of Criminal Plea): – CEO must annually review compliance program and certify same to the Probation Office – Abbott will report any probable FDCA violations to Probation Office – Board will report annually on effectiveness of the company’s compliance program. – Abbott will not compensate sales representatives for off-label sales. – Abbott will ensure that: • Continuing medical education grant-making decisions are not controlled by sales and marketing, • Letters communicating medical information to healthcare providers be accurate and unbiased • It has policies designed to ensure that clinical trials are approved by the company’s medical or scientific organizations and published in a consistent and transparent manner. Recent DOJ Settlements (September 2012)
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Skadden, Arps, Slate, Meagher & Flom LLP
GSK, Abbott Settlements: Selected Take-Aways •
DOJ continues to raise the bar for settlement amounts
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Abbott settlement reflects DOJ enthusiasm for investigations of entire sectors of therapeutic areas (e.g., orthopedic companies)
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Continued/enhanced scrutiny of publication, study activities – OIG sees internal transparency and external disclosure as necessary (though not necessarily sufficient) controls – Remains one of the most challenging areas from compliance standpoint
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Patient safety continues to be key issue in prosecutorial decision making
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Continued focus on drivers of behavior, namely: – Field: Territory-based compensation – Executives: Recoupment
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Recent DOJ Settlements (September 2012)
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Questions and Discussion
Recent DOJ Settlements (September 2012)
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Skadden, Arps, Slate, Meagher & Flom LLP
Appendix: Selected Excerpts from GSK Corporate Integrity Agreement
Recent DOJ Settlements (September 2012)
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Skadden, Arps, Slate, Meagher & Flom LLP
GSK Settlement – CIA Provisions
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Recent DOJ Settlements (September 2012)
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GSK Settlement – CIA Provisions (cont’d)
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GSK Settlement – CIA Provisions (cont’d)
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Recent DOJ Settlements (September 2012)
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GSK Settlement – CIA Provisions (cont’d)
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Recent DOJ Settlements (September 2012)
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GSK Settlement – CIA Provisions (cont’d)
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Skadden, Arps, Slate, Meagher & Flom LLP
