Breakout Session: Sleepless Nights Legal Issues Keeping In-house Counsel Up at Night. Heather O Shea Jones Day

Transcription

1 Breakout Session: Sleepless Nights Legal Issues Keeping In-house Counsel Up at Night Matthew Stennes Medtronic, Inc. Sanjay Narayan AbbVie Inc. Caryn McDowell Onyx Pharmaceuticals, Inc. John Kelly Bass, Berry & Sims, PLC Heather O Shea Jones Day

2 Enforcement Landscape Dec Civil Div. Awards Ceremony From the robust enforcement of federal consumer protection laws, to record-setting recoveries under the False Claims Act, this year s award recipients have secured billions of precious taxpayer dollars through affirmative litigation. By enforcing regulations to ensure the safety of medicines and food products and by administering essential public health programs you have helped to protect the American people. - Attorney General, Eric Holder 2

3 DOJ Civil Division New Fraud Matters Qui Tam Non Qui Tam Fraud Statistics Overview; Civil Division, U.S. Dept. of Justice, 10/24/12 3

4 Whistleblower Trends Emergence of New Whistleblowers Compliance Officers Internal Auditors Physicians Attorneys Consultants External auditors Professional Whistleblowers Scientists Government employees Competitors Business Associates QC/QA Personnel Current Employees 4

5 New tactics Whistleblower Trends Well-coached whistleblowers Sending set-up s Communications to regulators Recording internal discussions Taking documents/hard drives Whistleblowers obtaining counsel outside of US Actions before and after filing complaints 5

6 Millions Whistleblower Trends & Responses HHS Civil Relator Share Awards Intervened Declined Fraud Statistics Overview; Civil Division, U.S. Dept. of Justice, 10/24/12 6

7 Whistleblower Trends & Responses Importance of Government Intervention No Government Intervention Government Intervenes Judgment or Settlement for Relator/Government No Recovery Fraud Statistics--Qui Tam Intervention Decisions if Case Status, DEP'T OF JUSTICE, Qui Tam Intervention Decisions & Case Status as of 9/20/09 7

8 Whistleblower Trends & Responses Developing processes/procedures Promoting internal processes Exit Interviews 8

9 Arrangements with Third Parties Use of distributors and vendors Co-development arrangements Risks, diligence and limitations 9

10 Focus on Individuals Regarding FCPA enforcement: "If you look at who we're prosecuting, we're prosecuting mid-level to senior level corporate officers and employees, CEOs, CFOs, heads of international sales. My point is these are people with significant positions in companies. - Former DOJ Deputy Chief of Criminal Fraud 10

11 Anti-kickback 3.0 Expanding enforcement scope Addressing discount and rebate analyses Hospital systems as customers Reimbursement consulting services Structuring therapy access programs Managing expectations of business units Consideration of state laws 11

12 Anti-kickback 3.0 Kickback schemes... not only call into question the integrity of individual medical decisions, but they also raise the cost of health care for all of us. Patients deserve care based on a doctor s sound medical judgment, not the doctor s personal financial interest. The Department of Justice will continue to pursue companies that use improper incentives... to promote their products. Stuart F. Delery, Acting Assistant Attorney General for the Civil Division 12

13 Case Study: Anti-kickback 3.0 Business leader wants to start offering rebates to pharmacies that are triggered if a pharmacy s performance meets certain metrics such as new patient volume, patient switching from competitor brand, providing premium space for marketing materials. 13

14 Case Study: Anti-kickback 3.0 Marketing for Device X would like to provide assistance to pharmacies to facilitate a pharmacy reward program that would give patients $30 gift cards to patients that switch pharmacies or using the pharmacy frequently regardless of sales volume of Device X. 14

15 When companies put profit over patients health and misuse taxpayer dollars, we demand accountability. In addition to significant monetary sanctions, we will ensure that non-monetary measures are in place to facilitate change in corporate behavior and help ensure the playing field is level for all market participants. Tony West, Associate Attorney General of United States 15

16 Corporate Integrity Agreements [OIG] is seeing some of the big companies a second and third time [t]he corporate integrity agreement is not sufficient to deter further misconduct. Gregory Demske, Chief Counsel to Inspector General HHS 16

17 Corporate Integrity Agreements Scope of CIA requirements Managing and communicating with a large sales force Obtaining guidance on difficult CIA terms and definitions 17

18 Trending CIA Terms/Conditions Executive financial recoupment program (a/k/a bonus pay clawback) Restrictions on sales representative incentive compensation Field force monitoring 18

19 Corporate Culture Best practices to promote compliance Eliminating legal filters Understanding business objectives Communicating risk Solutions to establish tone at the top Tone at the middle Lessons learned and closing the file 19

20 Corporate Culture Board education and updates Training on CIA terms and conditions Additional training or general training Ongoing and new director training scheduling Appropriate level of information/education 20

21 Managing Relationships Value and role of outside counsel Managing competing interests of business and complex regulatory landscape In-house counsel pressures 21