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| 29 January 2014 | By Alexander Gaffney, RAC,
The pharmaceutical industry's reputation has been heavily battered over the course of the last two decades, in part because of a seemingly endless stream of massive multibillion-dollar settlements over charges of off-label marketing claims. Those fines, which have seemingly done little to curb illicit behavior, have been seen by at least some industry analysts as cost of doing business-not a deterrent.
But the Department of Justice (DOJ) seems poised to change that dynamic by altering not the size of the settlement, but the structure of their integrity agreements.
In a speech to the CBI Pharmaceutical Compliance Congress on 29 January 2014, Assistant Attorney General Stuart Delery said that DOJ has put "renewed emphasis on identifying non-monetary measures that will help [DOJ] to prevent the recurrence of misconduct."
Delery cited the case of Ranbaxy, an Indian pharmaceutical company which pleaded guilty in May 2013 to charges that it had produced and distributed drugs which had failed to meet current good manufacturing practice (CGMP) standards and falsified its records. As part of the guilty plea, which also netted the largest-ever fraud conviction in an FDA-related case, Ranbaxy agreed to a corporate integrity agreement (CIA) which placed heavy restrictions on three of the company's manufacturing facilities.
Crucially, the CIA also contained an additional provision: If any of Ranbaxy's other facilities exhibited quality problems, they, too, would be added to the CIA. That prevented Ranbaxy from simply shifting its manufacturing operations around to get around FDA's restrictions, and also put the onus on the company to make global improvements.
Delery said this provision has continued to pay off for both FDA and DOJ. Indeed, just last week, the consent decree allowed FDA to move swiftly and respond forcefully when it learned of problems at yet another Ranbaxy facility," he said, referring to new data falsification claims made against the company.
And as Delery went on to explain in his speech, the Ranbaxy agreement isn't the ultimate in CIAs. More is on the way, he said.
"As these settlements have made clear, we are not interested in merely collecting a large fine and moving on to the next case. We strive to give companies the incentives - and the tools - to craft better compliance practices in the future."
So what will those incentives look like? Expect them to stress accountability going all the way to the top of the organization. A 2012 CIA signed with Abbott Laboratories regarding marketing of its epilepsy drug Depakote requires that its CEO "personally certify compliance" with the CIA and its requirement to report any probable violations of the Federal Food, Drug and Cosmetic Act. Abbott's board of directors is also charged with reviewing the efficacy of the company's compliance effort, Delery said.
"We want to work together with you, the people most responsible for compliance, to achieve real change," Delery added.
"Misbranding … undermines the regulatory regime that we rely on to ensure that medicines and medical devices are safe," he continued. "And it can have catastrophic consequences for patients. That is why the government will continue to bring these cases, and why we think it is so important that the public-and the industry in particular-understand the conduct at issue."
Delery also said that companies that proactively report cases of unlawful conduct may be eligible for leniency, stressing that DOJ is interested in encouraging cooperation and making sure that corporate compliance is a "winning business strategy."
"When a company or individual acts responsibly by timely and voluntarily disclosing unlawful conduct, we will give serious consideration to that disclosure in deciding whether or how to charge or resolve the matter," Delery explained. "Likewise, we will credit actions taken once the government has started to investigate."
While he added that there is "no one formula for cooperation," working with DOJ would ensure that companies and their customers are "in the best possible position."
Tags: Settlements, Corporate Integrity Agreement, CIA, Fines, Ranbaxy, Latest News, enforcement