Enforcement Trends in the Pharmaceutical Industry Lewis Morris Chief Counsel Office of Inspector General, DHHS

Overview Review of OIG work related to Medicaid and Medicare Part B drugs Describe OIG priorities in response to MMA Discuss preventative measures you may wish to consider

Review of 340B Drug Prices Objective: determine if 340B drug pricing program participants received the required discount prices. Method: compare CMS’ calculations of the ceiling price to the invoice prices paid by 37 sampled providers. Findings: Identified significant discrepancies between invoice prices and 340B ceiling prices.

Review of 340B Drug Prices Problems identified with the underlying data after the report’s release   OIG was given ceiling prices for the wrong time period   Questions regarding application of package size information in the ceiling price calculation Conducting a more systemic review of the accuracy and completeness of the data used to calculate 340B prices

Completed MMA-related Work Civil Monetary Penalties related to Medicare-endorsed drug discount cards. Guidance on outreach efforts between endorsed card sponsors and network pharmacies. Review of end stage renal disease (ESRD) drug costs

Additional OIG Work Related to MMA Monitoring Part B Prices (AWP Reform) Utilization of Drugs and Services Access to Drugs Competitive Bidding Process Part D Drug Benefit Calculation of Aver. Mnf. Price

Troubling Industry Practices Misreporting wholesale prices and marketed the “spread” Suppressing negative research findings on a product Knowingly failing to report price concessions made to purchasers Offering and giving physicians kickbacks to induce the ordering of products

Additional Troubling Practices “Wining and dining” high prescribers Excessive consultant fees Free samples that are to be billed to the health care programs. Illegal promotion of off-label uses Part D Discount card fraud Providing bogus research grants

Suggested Compliance Self- Assessment Questions Does the compliance office substantial authority and adequate resources? Is the board of directors well informed about the compliance function? Has the company too narrowly construed the compliance function?

Suggested Compliance Self- Assessment Questions Has the organization inappropriately limited what are considered “compliance issues”? Have you considered the structure of the organization when designing compliance training? Do you know your company’s pricing practices and systems?

Suggested Compliance Self- Assessment Questions Do you understand the marketing techniques available to your sales force, and the procedures required to use those tools? Do you know what message is being delivered about your products? What steps are taken in instances of non-compliance?