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February 2023 Issue
We start this month’s issue with an examination of the recent lawsuit filed by California against three manufacturers and PBMs for their part in artificially inflating the price of insulin. California joined Kentucky in alleging unfair trade practices and unjust enrichment.
Our feature article is followed by a review of the HHS-OIG’s recent report concerning CMS’s program implementation of the Average Sales Price for Medicare Part B drugs. The report highlights significant deficiencies resulting in erroneous payment calculations.
Next, we explore the DOJ’s latest revisions to its Corporate Enforcement Policy. These revisions are the latest chapter in the Justice Department’s efforts to promote corporate and individual accountability and effective compliance. We also examine the recent DOJ settlement with Advanced Bionics to resolve false claims allegations involving cochlear implants. Advanced Bionics allegedly falsified data in various PMA submissions to the FDA.
Finally, we conclude this month’s issue by looking at the risks associated with employee hiring, including employee background checks.
Articles
FEATURE
Price Fixing, Collusion, or Something Else?
California Sues Insulin Manufacturers and PBMs
By Kirt Kraeuter
Summary: California’s recent complaint alleging unfair competitive practices at the three U.S. insulin manufacturers and three Pharmacy Benefit Managers who secure prescription drug coverage for millions of Americans is just the latest salvo in a bruising multi-year battle between Congress, manufacturers, states, insurers, and public interest groups. While all parties agree that the current price of insulin is too high for U.S. consumers, agreement on who is to blame and possible solutions seems a mirage.
Tags: Insulin, Drug Pricing, Price Fixing, California, Kentucky, PBMs, CVS Caremark, ExpressScripts, OptumRx, WAC, Medicare Part D, Sanofi, Novo Nordisk, Eli Lilly, Unfair Trade Practices, Price-fixing, Unjust Enrichment
Regulatory Update
Drug Pricing is Challenging Even for the Government
New OIG Report Highlights Issues with Calculating Average Selling Price
By Gwendolyn A. Ball J.D. Ph.D., Staff Writer
Summary: Accurate Average Selling Price calculations are a cornerstone for Medicare Part B reimbursements. However, a recent report by the HHS-OIG highlights significant deficiencies with CMS’s program implementation.
Tags: HHS-OIG, CMS, ASP, AWP, WAC, Inflation Reduction Act, Medicare Part B,
LITIGATION & Enforcement
Through the Looking Glass
DOJ Revises Its Corporate Enforcement Policy
By Dr. Seth B. Whitelaw, Editor
Summary: In 2022, the Justice Department aggressively pursued individual accountability and effective compliance. Now in the early days of 2023, the DOJ has announced new updates to the Criminal Division’s Corporate Enforcement Policy. This article explores the latest revisions.
Tags: DOJ, Corporate Enforcement Policy, Accountability, Compliance, Voluntary Self-Disclosure, Sentencing Guidelines, Cooperation, Declinations, Remediation
A Shot Across the Bow
Advanced Bionics, Misrepresentations & False Claims
By Robert N. Wilkey, Esq., Senior Staff Writer
Summary: In December 2022, Advanced Bionics LLC, a Valencia, California-based manufacturer of cochlear implant system devices, agreed to pay more than $12 million to resolve false claims allegations that it misled federal health care programs regarding the radio frequency emissions generated by some of its cochlear implant processors. This settlement represents a significant compliance warning to drug and medical device manufacturers regarding the integrity and accuracy of their FDA submissions.
Tags: FDA, Cochlear Implants, Radio Frequency, CRISPR, FCC, False Claims, Whistleblower, Advanced Bionics, Falsification, CIA
Governance & Operations
Employees Are Our Greatest Asset
The Risks of Getting It Wrong
By Kirt Kraeuter
Summary: Hiring or promoting the wrong people is a costly business mistake. Furthermore, candidate and existing employee screening require a thoughtful approach and consistent application to avoid discrimination charges. Although some established compliant standards exist, standards for new forms of screening (e.g., social media) are emerging to balance the need for such screening with individual privacy concerns. Thus, this arena transcends traditional human resources and necessitates compliance review.
Tags: Employers, Employees, Hiring, Promotions, Fair Credit Reporting Act, EEOC, Discrimination, Background Checks, Excluded Parties, Privacy, Ban the Box, Social Media, Screening, NLRB
From all of us here (virtually) at Policy & Medicine Compliance Update, we hope all our readers and their families are safe and healthy. And as always, thank you for subscribing and your continuing support in making us the most comprehensive, up-to-date compliance publication for life science compliance professionals.
Wishing you all the best,
Dr. Seth B. Whitelaw
Editor