FinCEN Releases First Advisory on COVID-19 Illicit Activity, Including New Red Flags for Potential COVID-19 Fraud and Scams
On May 18, 2020, the Department of Treasury's Financial Crimes Enforcement Network (FinCEN) released its first advisory to financial institutions about detecting and preventing COVID-19 fraud. The guidance provides financial institutions with 22 red flag indicators to help identify potential illicit activity related to the pandemic, such as price gouging and hoarding medical supplies; fraudulent cures, tests, and vaccines; and non-delivery scams. FinCEN plans to issue additional advisories about financial crimes related to the pandemic in the future.
The SUPPORT for Patients and Communities Act, enacted on October 24, 2018 to combat the opioid epidemic, created a new criminal kickback prohibition for addiction treatment-related services. Codified at 18 U.S.C. Â§ 220 and entitled â€œEliminating Kickbacks in Recovery Act of 2018," it criminalizes paying for patient referrals or offering inducements to patients receiving addiction treatment services. Each violation is punishable by up to 10 years' imprisonment and a $200,000 fine.
Eastern District of Pennsylvania Refuses to Keep FCA Qui Tam Complaint Under Seal to Facilitate Government's Settlement Negotiations
On October 16, 2018, the District Court for the Eastern District of Pennsylvania denied the government's requested eleventh extension of the seal in a five-year-old False Claims Act qui tam case. The court ruled that the government's desire to continue settlement negotiations with the defendant, who had been given a copy of the complaint with the court's permission, did not constitute "good cause" to extend the seal, as required by the FCA.
Third Circuit Rejects FCA Claims of Medicare Part D Fraud Applying Post-Escobar Materiality Bar; Acknowledges Validity of Government Knowledge Inference Defense
Earlier this month the United States Court of Appeals for the Third Circuit ended a long-fought False Claims Act case of alleged Medicare Part D fraud, holding that a pharmacy benefit manager's limited non-compliance with pharmacy claims processing requirements was not material to Medicare's payment decisions within the meaning of the Supreme Court's Escobar decision. On November 16, 2017, in United States ex rel. Spay v. CVS Caremark Corporation,Â the Third Circuit affirmed the district court's summary judgment dismissal in its second significant post-Escobar materiality decision. Interestingly, the appellate court veered away from the district court's holding that the "government knowledge inference" defense precluded liability for the PBM and instead found that the Relator failed to demonstrate that the alleged non-compliance met the Escobar materiality threshold.
On March 26th, I presented to pharmacy professionals, clinicians, researchers, and educators in San Francisco for the American Pharmacists Association's (APhA) 2017 Annual Meeting & Exposition. There was a lot of buzz about the growing opioid epidemic, the proliferation of illegal online pharmacies, and off-label marketing.
However else one characterizes 2016, it was a very good year for the government's Foreign Corrupt Practices Act (FCPA) profit center. Twenty-seven companies paid about $2.48 billion to resolve FCPA cases, a record. Although the incoming Administration may shift priorities, there exists considerable institutional momentum behind continued FCPA enforcement. In that light, it's worth taking a look back at one of the last FCPA cases of 2016.
With other members of our Firm's Regulated Cannabis Group, I recently co-authored an article for the Life Sciences, Pharmaceuticals, and Health Care Supplement of The Legal Intelligencer. We examined Pennsylvania's April 2016 medical marijuana law from four essential legal standpoints - professional liability, health care law, employment law, and enforcement - and the related implications for health care providers in the state.
Today, February 17, 2016, AHLA's Journal of Health & Life Sciences published as its â€œFeatured Articleâ€ our analysis of the enforceability of FDA's off-label marketing restrictions in the aftermath of the August 2015 Amarin Pharma, Inc. v. United States FDA decision. The article, entitled, â€œTo Promote or Not to Promote? The Enforceability of FDA's Off-Label Marketing Restrictions Following Amarin,â€ traces the recent string of judicial decisions challenging the government's restrictions on drug companies, truthful and non-misleading off-label speech as violating the First Amendment's free speech protections.
The DOJ, together with the FDA, is increasingly investigating and prosecuting food companies for the sale of adulterated food products. Coupled with the Yates Memo, the September 2015 memorandum by DOJ Deputy Attorney General Sally Yates announcing DOJ's emphasis on holding individual employees accountable for corporate misconduct, this puts food company executives, as well as food companies, at increased risk of being charged criminally for adulterated products.
HHS-OIG Senior Counsel Riordan Focuses on Kickbacks, Accountability, and the Role of Compliance in Pharma Compliance Congress Keynote
On Wednesday, October 22, 2015, the 16th Annual Pharma Compliance Congress in Washington, D.C., was kicked off by keynote speaker Mary Riordan, HHS-OIG Senior Counsel and perhaps OIG's most well-known face to the pharmaceutical industry. In her talk, Ms. Riordan laid out three hot button areas for company compliance professionals: kickbacks, individual accountability, and the role of compliance in business operations. We thought these were worth sharing, particularly because two of the areas -- a jump in kickback cases and individual accountability in the investigation and resolution of corporate investigations -- were themes also emphasized by the government speakers at the AUSA Roundtable panel.
PharMerica Settlements Highlight Potential for Dual False Claims Act and Controlled Substances Act Liability for Invalid Prescriptions
In the July/August 2015 issue of Rx Ipsa Loquitur, the newsletter publication of the American Society for Pharmacy Law (ASPL), Internal Investigations & White Collar Defense Principal Barbara Rowland, and Principal Matthew T. Newcomer, examine potential dual False Claims Act and Controlled Substances Act liability for Medicare Part D and Medicaid providers.
The FDA has issued draft guidance regarding previously announced menu-labeling rules set to take effect on December 1, 2015. The scope of those rules, which require certain businesses to post nutrition information about food offered for sale, has raised questions for the hospitality industry.