Pharmaceutical Meeting Planners Forum Day 1: Enforcement and compliance

This freaks me out a little: James Sheehan, Associate United States Attorney and this morning's enforcement and compliance speaker at the Pharmaceutical Meeting Planners Forum reads Capsules. He even cited something he read here during his talk this morning. I better start at least proofreading what I post here.

Anyway, he was a terrific speaker (which I'd say, even if I didn't think he might see this), even if he did, as an earlier speaker warned us he would, "scare the bejesus" out of us. He talked about what the Department of Justice is about, and it isn't just to breed paranoia: It's about protecting medical program beneficiaries, rooting out fraudulent activities and recovering any ill-gotten gains, and punishing fraudsters. Money attracts fraud, and government money, of which there's more than $60 billion a year, is a prime target. That's why oversight comes into play, particularly oversight of false claims violations, he said.

After reading about the various cases in the papers, I wasn't too surprised to learn that pharmacy false claims are the most prevalent in our healthcare system—more than physicians and hospitals combined—to the tune of $5,000 per claim. And be aware that pharmaceutical fraud involving any major managed care plan is now a fraud or false claim on the United States. Medicare Part D, which so many of our growing population of over-65s are being urged to take advantage of, also brings with it more potential for false claims, such as prescription claims to prescription drug plans (PDPs), claims to the Medicare Advantage Plans, claims for over-65s to employer prescription plans receiving the 28 percent subsidy from CMS (which totals 8 million beneficiaries, including those managed by insurors or other entities), and kickbacks, research, and marketing fraud on any drugs sold to any Medicare beneficiary on Part D, Sheehan said. The kicker on the latter is that kickback et all claims can include drugs prescribed under private plans, if I understood him correctly.

And the central scrutinizing tools DOJ can use to monitor for fraud etc. have gotten better now with the pharmacy benefit management (PBM) systems now being used. "Now we can go back and look at individual physicians" for off-label abuse, he said, instead of just relying on aggregate data from Medicaid. These PBMs allow for data review and analysis, and provide a way to capture and record complaints. They also have internal investigative abilities, can provide a record of investigations and actions, and give the ability to develop a watch list for pharmacies, drugs, prescribers, and patients.

Sheehan went on to detail why regulators are looking at the entire healthcare system for abuse. There's a lot of money to be made in pharmacy consulting for nursing homes and other facilities, which are the largest source of profit for these types of organizations, he said. The business model also makes these facilities potential breeding grounds for problems, he said, because they make money from a captive population of docs and patients, do a large volume in prescription drugs, and get paid by manufacturers. PBMs also are under scrutiny, again due in part to the business model, which is to make money on the spread between retail costs and what the payor is charged, among other things. Potential problems include secret payments to referral sources, secret payments from manufacturers, misleading pricing, and double-billing, again among other things.

And it's not limited to the federal level: States have their own enforcement issues, including unfair trade practices, pharmacy board regs, and antikickback statutes. Now that New York Attorney General (and gubernatorial candidate) Elliot Spitzer has focused on these issues, Sheehan said you could expect to see more state AGs looking at these sorts of things more closely.

Train your contractors

This came through loud and clear: It's not enough to have an internal compliance program to train pharma employees; companies also should be training all their contractors on compliance. "[Third party] meeting planners can be focused more on [return on investment] than on compliance," he said. "And they can generate e-mail and other documents that are very useful to us. If you call it a CME meeting but the meeting planner shows that the goal of the meeting is to increase prescriptions to a certain level, that's gold for compliance investigators," he added. It's also a good idea to train hotels.

But he did add, "We're not the pizza police." What the DOJ is looking for are meetings that promote a drug in a way that's misleading or false. "Whenever you're tracking results of prescriptions, there's a concern for us about the risk of harm to patients" from promoting inappropriate drugs." The extent to which switching patients to a certain drug deprives them of benefits from another drug is "just as much fraud to me" as outright misinformation, he said.

Some good resources for what pharma can do to cover themselves can be found here, here, and in USA ex rel Franklin v. Parke-Davis 2003 WL 22048255. And here's a good corporate integrity agreement model he recommended measuring your program against.

Follow industry and federal guidelines

Sheehan also mentioned the Accreditation Council for CME's Standards for Commercial Support, calling ACCME "aggressive in rewriting the rules and in articulating their own rules," and PhRMA for its code on interacting with healthcare professionals. He then pointed out that when someone doesn't live up to the OIG guidance or their own industry's rules, "there might be basis for fraud."

But he also acknowledged that there is some wiggle room in the rules, codes, and guidances. "Modest meals, that wonderful phrase. I don't know the answer to what's a modest meal, or an appropriate venue." He emphasized that it's not necessarily any one thing that will trigger an investigation; it's more likely to happen when you have some questionable things happen at a CME activity, coupled with problems with how research is presented (or suppressed), issues with promotional activities, and sales reps doing inappropriate things. He pointed to the Parke-Davis case as useful for figuring out what kinds of systemic problems investigators look for.

But isn't CME protected by the First Amendment? He said that, the court's line is unclear, but you should be OK as long as the information being disseminated is truthful and independent, but disseminating untrue, misleading, incomplete or false information is not a good idea if you want to avoid investigation. In the United States v. Caputo, a conspiracy count to introduce a "misbranded" device into commerce through the use of off-label information was upheld in Illinois, he said.

"When you spend money on a physician, you do it to change behavior," he said. "You have to find out what is and is not OK." And it's not enough just to have documentation of your firewall's completeness; you have to also make sure the procedures in the documentation is implemented. Other "bad influences" to be on the lookout for: false or misleading information; paying agents to make formulary recommendations; selling samples; and giving gifts and payments in the guise of "unrestricted educational grants." These can result in fraud and kickback charges, he said.

"We hear a lot, 'the lawyers looked at it, and it was fine.' Then we access the lawyers files," and find out that they didn't entirely understand the difference between what they were approving and what was actually done.

"The issue for us in the future isn't so much about the money, but what the impact will be on patients," he said. "The core issue for us is what is putting the patients at risk."

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