Author: Dee Mahoney
Last week the Office of Inspector General (OIG) released a fact sheet to correct what it characterized as “inaccuracies” in the media coverage surrounding the notice of potential exclusion received by Howard Solomon, CEO of Forest Laboratories. The fact sheet clarifies that the OIG has not excluded Mr. Solomon from Federal health care programs, but its broader purpose appears to be to reiterate the OIG’s permissive exclusion authority and summarize the process it will follow as it expands its use of the authority against officers and managing employees at pharmaceutical and medical device companies.
The OIG signaled this expansion over a year ago, issuing public guidance in October 2010 listing the factors it would consider in determining whether to exclude an officer or managing employee. The guidance states that officers and managing employees of a company convicted of health care fraud may be excluded from doing business with the government based solely on their position within the company—there is no knowledge requirement. If there is evidence that the employee knew, or should have known, of the illegal conduct, the guidance states that OIG will operate with a presumption in favor of exclusion.
As a former executive of a Fortune 50 pharmaceutical company, this guidance concerns me. The thought of being excluded from conducting business with Federal healthcare programs simply because someone at my company did something wrong, or because the government says I should have known about it, is alarming. I would want to make sure of three things:
- I was taking every action possible to know what goes on in my organization and to broadly communicate that illegal behavior will not be tolerated.
- I would also make certain that my sales and marketing professionals received professionally relevant compliance training related to an individual’s daily promotional activities and products sold.
- And, I would partner with compliance to ensure they have the appropriate funding to do meaningful behavioral training.
Time will tell how the OIG intends to interpret and use its authority. The guidance calls the factors listed “informal and nonbinding.” But the notice sent to Mr. Solomon should remind all senior life science officials to remain vigilant–the guidance reminds us that the OIG’s authority is discretionary, and not subject to judicial or administrative review.
- FDA Issues Non-Binding Criteria for Executive Crimes (goodpromotionalpractices.com)
- Pharma Exec Banned from Govt Business (goodpromotionalpractices.com)