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Are Opioid Pharm Manufacturers Ready for the Enforcement Spotlight?

//Are Opioid Pharm Manufacturers Ready for the Enforcement Spotlight?

Are Opioid Pharm Manufacturers Ready for the Enforcement Spotlight?

ARTICLE

Gary Giampetruzzi, Paul Hastings

Reproduced with permission from Paul Hastings.

Authors: Gary Giampetruzzi is Global Vice-Chair of the Investigations and White Collar Defense and Life Sciences Departments and a partner in the Litigation Department of Paul Hastings in New York. Jane H. Yoon is of counsel in the Litigation practice of Paul Hastings in New York. Sandra Gonzalez is an associate in the Litigation practice of Paul Hastings in New York.

On Thursday, August 10, 2017, President Trump announced his intention to designate the opioid crisis a ‘‘national emergency.’’ Hours later, the White House issued a statement that the President had ‘‘instructed his administration to use all appropriate emergency and other authorities to respond to the crisis caused by the opioid epidemic.’’ This has become, as recognized on the evening news each day, in the homes of people across all sectors of our society, a national crisis of in- increasingly epic proportions.

The prosecutorial community is, without doubt, signaling its focus on the crisis. On July 13, 2017, Attorney General Jeff Sessions announced that charges had been filed against over 400 individuals, including doctors, nurses and pharmacists, across the country in the largest coordinated federal health care fraud enforcement action undertaken to date. According to the government, the schemes involved approximately $1.3 billion in false billings to federal programs—and over 120 of those charged, including doctors, were charged in connection with crimes relating to the prescription or distribution of opioids or other narcotics.

The National Opioid Crisis

That the U.S. is facing an opioid crisis has become a fixture in the news and part of the public conscious- ness. Major news sources to local outlets address the ‘‘opioid epidemic’’ and ‘‘opioid crisis’’ virtually every day, and prosecutors are talking about dealing with the crisis itself rather than just the cases that come along with it at compliance conferences. Before addressing the enforcement and regulatory landscape and specific compliance considerations for opioid manufacturers, it is important to understand the opioid epidemic our nation is facing, and some of the key available statistics.

  • Opioid consumption in the U.S. vastly exceeds that of any other country;
  • Since 1999, the number of prescription opioid and heroin overdose deaths and amount of prescription opioids sold in the U.S. have quadrupled;
  • In a 2014 study, 75% of heroin users in treatment for opioid addiction started with prescription opioids; and
  • Every day, 91 Americans die from an opioid over- dose, with nearly half of the deaths involving prescription opioids.

These alarming statistics—and the almost daily, harrowing accounts of how opioids have impacted individuals, families, and communities—have unsurprisingly captured the public’s attention. The economic burden of this epidemic on the government also cannot be ignored. For example, from 2006 to 2015, Medicare Part D spending on prescription opioids increased by 165%—reaching more than $4 billion.

A 2016 report from the Office of Inspector General for the U.S. Department of Health and Human Services reported that, in 2015, 30 percent (i.e., nearly 12 million) of Part D beneficiaries received at least one commonly abused prescription opioid. In addition, the number of opioid-related hospital visits increased dramatically between 2005 and 2014 across all sexes and age groups, significantly impacting many states. The epidemic appears to be transcending party lines; one of the reported sticking points in the recent healthcare legislation debates was the impact that the bill’s anticipated cuts would have on the states’ ability to fight this crisis. Another notable figure is the combined global opioid revenue estimates; last year, one market research firm estimated that global opioid revenues will exceed $42 billion between 2015 and 2021. These numbers make it is easy to see why regulators and law enforcement have been emboldened, crossing traditional political lines to undertake joint investigations, in their pursuit of opioid prescribers and manufacturers.

A Look Ahead: Possible Compliance Risk Mitigation Strategies

In many ways, the problems and practices covered in the preceding section are not unique to opioid manufacturers. However, the intense spotlight on (1) how addiction has impacted individuals and communities nationwide and (2) significant government spending (on prescription opioids and addiction treatment) sets opioid manufacturers apart. And, under these circumstances, with communities, politicians, regulators, and law enforcement on the attack, these companies may be subjected to stiffer penalties and exclusion—especially if regulators come to believe that the conduct posed a potential threat to patients or government programs.

As such, the focus on the U.S.’s opioid epidemic, recent headlines, and prior enforcement actions should send a clear message to opioid manufacturers and other organizations involved in the prescription pain space: matters of public concern and increased attention typically lead to increased exposure. In a very real sense, the race is on. Opioid manufacturers must quickly assess and improve their compliance programs while keeping pace with others who are keeping watch (e.g., FDA, lawmakers, prosecutors). While not the only source of risk, opioid manufacturers can focus on specific activities that previously landed similarly-situated manufacturers in trouble to help mitigate known risks.

  • Compliance Program, Generally Numerous articles and opinions have addressed the dangers of a ‘‘paper’’ compliance program. Life science companies would be wise to heed the DoJ’s enforcement actions as fair warning that it will not tolerate ‘‘paper’’ programs that appear to check the compliance box but do not have the necessary processes, controls, and resources to put such programs into practice. More than one prosecutor out there would opine that if given the opportunity to ask just one question about a compliance program, it would be: ‘‘What is your compliance budget? / What are your compliance resources?’’ While this holds true for all life sciences companies, the current environment— especially on the heels of the guidance that the DoJ issued earlier in February—suggests that it is imperative that opioid manufacturers ensure each compliance program component is adequate and appropriately tailored to address known risks, and resourced to manage the challenges.
  • Code of Conduct, Policies, and Procedures Opioid manufacturers must ensure that they not only have a Code of Conduct and related policies and procedures that are expected but that such documentation helps guide employees on the proper way to conduct day-to-day activities. In addition, the compliance policies and procedures should effectively provide clear guidance to the Compliance Department and others in the company who have been ‘‘deputized’’ or are in ‘‘gatekeeper’’ positions.

Click here to download and read the full article, published on Bloomberg Law.

2017-08-29T15:48:54+00:00