Archive for June, 2012
Monday, June 11th, 2012
As the world’s largest purchaser of prescription drugs under Medicare, Medicaid, the Veterans Administration, and other government healthcare programs, the United States government has a vested interest in ensuring that prescription drugs are safe and effective.
Current Good Manufacturing Practice (“cGMP”) regulations outline the requirements that drug manufacturers must follow for the manufacture, processing, packing, and holding of a drug. The regulations, which are enforced by the U.S. Food and Drug Administration (“FDA”), provide for systems that assure proper design, monitoring, and control of manufacturing processes and facilities. Adherence to the cGMP regulations assures the identity, strength, quality, and purity of drug products by requiring that manufacturers of medications adequately control manufacturing operations.
If a company is not complying with cGMP regulations, any drug it makes is considered “adulterated” under the law. The government has taken the position that adulterated drugs, those whose strength materially differs from, or the purity or quality falls below, the strength, purity, or quality specified in the drug’s FDA-approved New Drug Application, the drug’s labeling, and/or the standards set forth in official compendium, are not eligible for payment by the government. Consequently, any claim for payment submitted for an adulterated drug may give rise to liability under the False Claims Act.
In October 2010, the Department of Justice announced its largest cGMP settlement to date, as SB Pharmco Puerto Rico – a subsidiary of GlaxoSmithKline – pleaded guilty to the manufacture and distribution of adulterated drug products. The company settled the False Claims Act allegations for $750 million, resulting in a $96 million payment to the whistleblower in the case.
Most recently, at an ABA conference, the government affirmed its position that cGMP violations can give rise to violations of the False Claims Act, particularly if the resulting drug products are unsafe, ineffective, and/or substandard.
If you have knowledge of cGMP violations and would like to discuss the possibility of a whistleblower award under the False Claims Act, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
Friday, June 8th, 2012
Ever since it was born out of the passage of the Dodd-Frank financial reform bill in 2010, all eyes have been on the success or failure of the SEC’s Whistleblower Program. Since the program officially went into effect in August 2011, the SEC reports that they have been continually receiving high quality tips at an impressive pace of roughly seven per day. As a result, the fact that, according to insiders, the first payment of an award appears to be imminent, there is a veritable spotlight on the Commission and the award determination process.
In responding to the rumors of a pending award, Sean McKessey, Chief of the SEC Whistleblower Office, has continued to express his enthusiasm for the program and the importance of actually making that first payment. In an article published on Huffington Post, McKessey stated “I view [the program] as already having been a very significant success, but I understand that people want to see the deliverable. And the deliverable, in our view, is paying people for good information…[t]he more the better, obviously.” Further,
As we await official confirmation of the first award payment, the SEC is reminding people that the amount of the award to those who come forward remains subjective, and that the sanctions ultimately imposed against a company must exceed $1 million before they are even eligible for an award. Specifically, at a conference earlier this week, Jane Norberg, deputy chief for the SEC’s Whistleblower Office, told attendees that although there is “no hard and fast formula [in making an award determination] at this point…it is in the SEC’s sole discretion as to how much of an award there is – whether it is 10% or 30% or somewhere in between.”
In an era where the importance of corporate accountability is reaching new heights, the first award from the SEC will undoubtedly send a strong signal. “I think it will be an affirmation that this will not just be a paper program, that we’re not just going out and making speeches,” McKessey said.
Source: The Huffington Post