February 12, 2014 Life Sciences Enforcement Year in Review: Examining Hot Button Areas for FDA & Related Government Enforcement Peter Spivack, Hogan Lovells.

February 12, 2014

Life Sciences Enforcement Year in Review: Examining Hot Button Areas for FDA & Related Government Enforcement

Peter Spivack, Hogan Lovells US LLP

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Federal and State Enforcement

• Off-Label Promotion• Consumer Protection statutes• Anti-Kickback Statute• cGMP

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Off-Label Enforcement

• Court decisions• United States v. Caronia• United States v. Harkonen

• Settlements– Drug

• Johnson & Johnson• Par Pharmaceuticals• Amgen• Boehinger Ingelheim

– Device• TranS1/Baxano Surgical• Orthofix International NV

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Off-Label Enforcement

• Court decisions– United States v. Caronia

• Truthful and non-misleading off-label marketing is protected speech under the First Amendment and cannot be the basis of a criminal prosecution.

– United States v. Harkonen• In an unpublished decision, the Ninth Circuit affirmed the former

CEO of Intermmune’s conviction for wire fraud.• A press release that misrepresented the results of a clinical trial

(involving the drug Actimmune®) is not protected speech.

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Off-Label Enforcement

• Johnson & Johnson– Settlement terms

• Janssen Pharmaceuticals misdemeanor plea• Scios, Inc. misdemeanor plea (prior)• $485 million in criminal fines and forfeitures• $1.72 billion in False Claims Act civil settlements• Corporate Integrity Agreement

– Conduct• Promotion of Risperdal and Invega for elderly patients with

Alzheimer’s and dementia.• Promotion of Natrecor for outpatient cardiovascular use.• Market share rebates, data purchase agreements, and speakers

fees as kickbacks.

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Off-Label Enforcement

• Johnson & Johnson (Nov. 4, 2013)– Corporate Integrity Agreement

• Supersedes Janssen CIA and extends to Oct. 2018.• Clawbacks for bonuses and other long-term incentive

compensation.• Board and senior executive certifications for compliance with the

CIA.• Risk assessment and mitigation planning.• Detailed controls over third-party educational programs.

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State Enforcement: Consumer Protection Laws

• Premised on broad consumer protection laws that prohibit unfair and deceptive practices.

• Often contain per occurrence penalties.• Often can be enforced by state attorneys general or

consumers.• Examples:

– Johnson & Johnson / Risperdal– GlaxoSmithKline / Avandia– BMS / Sanofi / Plavix

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Anti-Kickback Statute

• Sanofi Aventis (Dec. 19, 2012)• Settlement terms

– $109 million in False Claims Act civil settlements– Corporate Integrity Agreement

• Conduct– Free units of Hyalgan to physicians to lower its effective price and

increase the “spread”– False ASP reports submitted to CMS

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cGMP

• Consent Decrees– Shamrock Medical – Med Prep Consulting – Ben Venue Laboratories– Ranbaxy consent decree extension

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cGMP: The Next Wave?

• “When companies fail to follow current good manufacturing practices, they often place patients at great risk of harm that neither they nor their doctors have any way of mitigating or even recognizing.”  CPB will take “an especially hard look whenever patients are placed at an unacceptably high risk of harm by those violations of current good manufacturing practices.” – Maame Ewusi-Mensah Frimpong, Deputy Assistant Attorney General (DAAG)

for DOJ's Consumer Protection Branch (CPB), remarks at Pharmaceutical Compliance Congress (PCC) (Jan. 2013)

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Questions?

• Thank you!

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Contact Information

• Peter Spivack(202) 637-5631

[email protected]

www.hoganlovells.com

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