compliance cvr fnl.indd 1 9/12/08 2:51:57 pm · pdf filetable of contents compliance navigator...

Compliance_Cvr FNL.indd 1 9/12/08 2:51:57 PM

C o m p l i a n C e n av i g at o r

on the road guide for PharMaCeutiCaL SaLeS rePreSentatiVeS

CTHPS Pocketguide.indd 1 10/9/08 3:13:32 PM

Compliance Navigator: On the Road Guide for Pharmaceutical Sales Rep resentatives is pub-lished by hCPro, inc.

Copyright © 2008 hCPro, inc.

all rights reserved. Printed in Canada. 5 4 3 2 1

iSBn 978-1-60146-226-8

no part of this publication may be reproduced, in any form or by any means, without prior written consent of hCPro, inc., or the Copyright Clearance Center (978/750-8400). Please notify us immediately if you have received an unauthorized copy.

hCPro, inc., provides information resources for the healthcare industry.

hCPro, inc., is not affiliated in any way with the Joint Commission, which owns the JCaho and Joint Commission trademarks.

Lauren Mcleod, group Publisher Janell Lukac, graphic artistMelissa osborn, executive editor audrey doyle, CopyeditorMichelle Leppert, Managing editor Liza Banks, Proofreaderrobert Wade, J.d., reviewer darren Kelly, Books Production Supervisordebra Yudkin, Cover designer Susan darbyshire, art directorKen newman, Senior graphic artist Jean St. Pierre, director of operations

advice given is general. readers should consult professional counsel for specific legal, ethical, or clinical questions.

arrangements can be made for quantity discounts. for more information, contact:

hCPro, inc.P.o. Box 1168Marblehead, Ma 01945telephone: 800/650-6787 or 781/639-1872fax: 781/639-2982e-mail: [email protected]

visit HCpro at its World Wide Web sites:www.hcpro.com and www.hcmarketplace.com

10/200821529


T a b l e o f C o n T e n T s

Compliance Navigatoriii

v learning objeCTives

1 inTroDUCTion

3 What Is Corporate Compliance?

7 Why Should You Care about Corporate Compliance?

8 Costs of Noncompliance: Bristol-Myers Squibb

9 Costs of Noncompliance: Purdue Pharma

11 CoMPlianCe regUlaTions

12 Who Enforces Pharmaceutical Compliance?

14 Regulations Impacting Pharmaceutical Companies

15 Federal False Claims Act

16 State False Claims Acts

17 False Claims Act Violations

19 False Claims Act Cases

20 Anti-kickback Statute

22 Costs of Noncompliance: Merck

24 Prescription Drug Marketing Act of 1987 (PDMA)


T a b l e o f C o n T e n T s

Compliance Navigatoriv

26 Costs of Noncompliance: SmithKline Beecham

Sales Representative

27 The Food, Drug, and Cosmetic Act (FDCA)

29 Health Insurance Portability and Accountability

Act of 1996 (HIPAA)

31 CoMPlianCe gUiDanCe

32 Pharmaceutical Compliance Guidance

33 PhRMA Code

38 OIG Compliance Guidance

43 AMA Guidance

44 ConClUsion

45 TesT YoUr KnoWleDge

46 Final Exam

51 Answer Key

53 glossarY


learning objeCTives

Welcome to the Compliance Navigator: On the Road Guide for Pharma-ceutical Sales Representatives. as a pharmaceutical sales representative, you interact with a wide range of healthcare professionals and provide information about your company’s products.

the objective of this pocket guide is to provide you with a basic under-standing of the key laws, regulations, enforcement organizations, and compliance guidelines governing the sale and marketing of pharma-ceuticals.

after reading this pocket guide, you will be able to:

demonstrate compliant sales practices when detailing your •company’s products to healthcare professionals

recognize potential compliance violations that may arise in •your daily work

avoid situations that could lead to violations of the anti-kickback •Statute or the false Claims act

anticipate situations that may involve legal or regulatory risks•

Fundamental Concept: this is a concept that, once grasped, allows you to penetrate the subject matter in depth.

Law: this points to a law’s definition for easy lookup.

Caution: this is where it is easy to make mistakes that could lead to compliance violations.

LEARNI

NG

OBJECTIVES

Compliance Navigatorv


INTRODUCTION


2Compliance Navigator

INTRODUCTI

ON

inTroDUCTion

the pharmaceutical industry is highly regulated. its activities are over-

seen by the food and drug administration (fda), the office of inspec-

tor general (oig), the department of Justice (doJ), and others.

the pharmaceutical industry tops the government’s list of targets for

fraud enforcement. in fiscal year (fY) 2007, the government collected

$1.54 billion in healthcare fraud enforcement. that was an increase

over fY 2006 when the government collected more than $1.2 billion

from healthcare fraud cases, many of which involved improper sales

and marketing practices.

field-based employees can come under scrutiny because they inter-

act with individuals who can prescribe or recommend the use of their

products. Sales rep resentatives are empowered to educate healthcare

providers about their company’s products. Because the government

eventually pays for a significant portion of healthcare products and

services through the Medicare and Medicaid programs, it makes inap-

propriately inducing the purchase or recommendation of any item or

service a crime.


INTRODUCTI

ON

Compliance Navigator3

What Is Corporate Compliance?

“Corporate compliance” refers to your organization’s ability to operate

within the rules, regulations, and policies set by government payers

and insurance programs. Pharmaceutical manufacturers that are not

in compliance with government rules and regulations may face harsh

penalties. Pharmaceutical sales representatives can face many of these

penalties as well.

FALSECLAIMS

ACT

OIGGUIDANCE

OFF LABEL

FDCA

HIPAA

PhRMACODE

ANTI-KICKBACK STATUTE

Manufacturers suspected of fraud or abuse are subject to government

investigations and audits of sales and marketing activities. With in-

creasing frequency, government agencies seek to interview employ-

ees in such investigations to learn about their personal conduct. Some

investigations have resulted in costly civil monetary settlements and

criminal convictions.



INTRODUCTI

ON

Many pharmaceutical-fraud settlements also include corporate integ-

rity agreements (Cias) between the pharmaceutical companies and

the oig. these Cias require pharmaceutical companies to implement

a comprehensive compliance program, including auditing and report-

ing the company’s policies and procedures, as well as drug pricing and

marketing practices.

Many Cias now also carry provisions that require increased training for

field-based sales representatives and provisions for increased supervi-

sion of field personnel. in addition, Cias require sales representatives

to certify they received the mandated training.


INTRODUCTI

ON


Fundamental Concept

noncompliance can mean harsh penalties, such as:

Corporate and individual criminal charges and jail•

Costly civil monetary settlements•

negative public attention and press, usually accompa-•nied by large drops in shareholder value

exclusions from federal healthcare programs, including •selling pharmaceutical products to beneficiaries of those

programs

Corporate integrity agreements with the oig•

Shareholder lawsuits•

recognizing the risk areas that lead to noncompliance, the gov-

ernment and representatives from the pharmaceutical industry

developed guidelines to achieve compliant pharmaceutical

sales and marketing.

as a sales representative, you are on the front line to ensure

compliance with these guidelines and other relevant govern-

ment regulations. this handbook will teach you about the major

compliance risks facing pharmaceutical manufacturers and sug-

gest ways you can reduce those risks.



INTRODUCTI

ON

Educate healthcare providers about thier company’s products

Serve as a key contact between their company and healthcare providers

Must follow a wide range of rules, guidances, and laws when interacting

with healthcare pro�essionals

Sales Representitives


INTRODUCTI

ON


Why Should You Care about Corporate Compliance?

it’s part of your responsibility to ensure compliance with the guide-

lines and relevant government regulations. By implementing a corpo-

rate compliance program, your organization has made a commitment

to identify and prevent potential problems.

Fundamental Concept

if your organization finds an error—a suspect sales arrangement,

for example—after it was made, a compliance program could

help to resolve or lower the company’s potential liability. if the

conduct results in a government settlement, a robust compli-

ance program will usually help to reduce the demands of a Cia.

if you hold yourself accountable for understanding the rules and

bringing questions forward, your organization will be account-

able for responding to you and correcting situations before they

become problems.



INTRODUCTI

ON

Costs of Noncompliance: Bristol-Myers Squibb

in September 2007, Bristol-Myers Squibb and its wholly owned subsid-

iary, apothecon, inc., agreed to pay $515 million to settle a broad range

of allegations about their drug marketing and pricing practices.

according to the doJ:

Bristol-Myers Squibb paid illegal remunerations—such as con-•sulting fees and expenses to physicians and other healthcare

professionals to participate in various consulting programs,

advisory boards, and preceptorships—to induce them to pur-

chase Bristol-Myers Squibb drugs.

apothecon paid healthcare professionals illegal remuneration •such as stocking allowances, price protection payments, pre-

bates, market share payments, and free goods.

Bristol-Myers Squibb promoted the sale and use of abilify for •off-label uses.

Both Bristol-Myers Squibb and apothecon allegedly set and •maintained fraudulent and inflated prices for a wide assort-

ment of oncology and generic drug products.

Bristol-Myers Squibb misreported its best price for the antide-•pression drug, Serzone.

as part of the settlement, Bristol-Myers Squibb paid $328 million to the

federal government, more than $187 million to the Medicaid partici-

pating states, and $124,000 to certain public health service entities.


INTRODUCTI

ON


Costs of Noncompliance: Purdue Pharma

in May 2007, Purdue Pharma paid $634 million to settle an investiga-tion of the company’s marketing practices for oxyContin. according to the government, the $634 million “represents approximately 90% of the profits for sales of oxyContin during the time period of the offense.”

the government accused Purdue of:

Misleading the public and physicians about the addictiveness •of oxyContin

Promoting the painkiller to treat various types of pain when it •was approved only for long-term pain management

tying pay for sales representatives to how much oxyContin •physicians prescribed, even for off-label uses

as part of the settlement, Purdue:

agreed to pay $470 million to government agencies and $130 •million to resolve private civil liabilities related to oxyContin

tablets

entered into a nonprosecution agreement by which it must •maintain a compliance program and engage an independent

review organization for a 60-month period

Pleaded guilty to one felony count of “misbranding”•

in addition, three Purdue executives—the president and Ceo; the chief legal officer; and the former chief scientific officer and head of research and development—were fined a total of $34 million. each pleaded guilty to a strict liability misdemeanor for misbranding.


compliance cvr fnl.indd 1 9/12/08 2:51:57 pm · pdf filetable of contents compliance navigator...

Documents