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Regulatory Focus™ > News Articles > US Looking to Alternate Methods to Punish Drug Companies For Regulatory Non-Compliance

US Looking to Alternate Methods to Punish Drug Companies For Regulatory Non-Compliance

Posted 06 March 2012 | By Alexander Gaffney, RAC 

US government officials are looking to clamp down on regulatory violations by the pharmaceutical industry-which has already paid $8 billion in fines over the last decade-by going after individuals within the companies more aggressively, reports USA Today.

The US Department of Justice, in particular, is ramping up its use of the Park Doctrine-a legal doctrine that holds individuals within a company responsible for the actions of a company. Senator Chuck Grassley (R-IA) introduced legislation that would allow the government to take measured half-approaches, including banning pharmaceutical executives from ever participating in government programs again.

Companies in many sectors of the economy are subject to massive fines and a ban on receiving future public funds if they are found to have defrauded the government. The pharmaceutical industry has largely been insulated from the latter half of such judgments because they are often the sole source of certain drug products.

Excluding such companies from public programs like Medicare and Medicaid would deprive public beneficiaries from receiving single-sourced drugs or create drug shortages of other products, which has removed a powerful incentive for companies to act in compliance, notes USA Today.

Read more:

USA Today - Experts seek alternatives to excluding drug companies

USA Today - Drugmakers have paid $8 billion in fraud fines

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