Are fines enough? As dramatic as the $3 billion fine appears for GlaxoSmithKline, there are some who believe it was not enough. There
Are fines enough? As dramatic as the $3 billion fine appears for GlaxoSmithKline, there are some who believe it was not enough. There are those who advocate making the consequences of misconduct harsh leading to possible jail time and that the GSK executives should have been summarily dismissed. What are your thoughts?
USE THE LINK:
1) https://www.nytimes.com/2012/07/03/business/glaxosmithkline-agrees-to-pay-3-billion-in-fraud-settlement.html?pagewanted=all
2) https://www.youtube.com/watch?v=Y8GrtP0ln9o
3) https://www.youtube.com/watch?v=hI_EbSPWUgI
(THERE IS NO WORD LIMIT, ITS A DISCUSSION QUESTION, I JUST NEED YOUR IDEAS AND THOUGHTS, DO YOU AGREE OR DISAGREE? I JUST NEED 1 PARAGRAPH)
Chapter 23
Pharmaceutical Manufacturers
Learning Objectives
Familiarity with largest drug companies and their record of fraud violations
7 elements of a mandatory compliance program
Role of the Compliance Officer
Purpose of policies and procedures on compliance
Areas of greatest drug company fraud risk
Analyze compliance program effectiveness
Questions & complaints about compliance
Introduction
Drugs constitute 10% of health care spending
Reasons for continued growth in expenditures on drugs
Few factors slowing that growth
Pharmaceutical Manufacturers & Their Fraud Violation Records
Pharmaceutical industry composed of a few very large, highly competitive companies
Top 10 pharmaceutical companies based on their revenues in 2010 and 2011
Largest federal fraud settlements with pharmaceutical companies in last five years
Active Corporate Integrity Agreements with pharmaceutical companies in early-2013
Seven Elements of Effective Compliance
Implementing written policies and procedures
Designating a Compliance Officer and Committee
Conducting effective training and education
Developing effective lines of communication
Conducting internal monitoring and auditing
Enforcing standards through disciplinary guidelines
Responding to problems & taking corrective action
Designating a Compliance Officer and Compliance Committee
Compliance Officer – focal point for compliance activities, full-time, sufficient authority, staff & resources, direct access to CEO and BOD
OIG-prescribed responsibilities of the CO
Compliance Committee – advise and assist the CO, understand company operations, integrity, judgment, assertiveness, and accessibility
Written Policies and Procedures
Code of Conduct – fundamental principles and values to provide overall direction to employee work behavior
Policies and procedures – governing employee actions in areas of operations where there is the highest risk of potential liability under federal fraud and abuse laws
Risk areas defined by OIG Program Guidance for Pharmaceutical Manufacturers
7
Integrity of Data Used to Determine Government Reimbursement
Many federal and state health care programs base their reimbursement rates for drugs on price and sales data submitted by drug firms
Failure to submit high integrity data exposes a company to liability under the False Claims Act, the Civil Monetary Penalties Statute, and the Anti-Kickback Statute
Prices reported must reflect any adjustments made to prices charged to purchasers
Kickbacks and Other Illegal Remuneration
Violations of the Anti-Kickback Statute (AKS) may result in criminal penalties
Identify paying relationships with persons able to generate federal health care revenues for the company
Examine reasons for each of the relationships
Criteria for judging legal risk of a relationship
Modify the relationship or fit it into one of the “safe harbors”
Risky Relationships: Purchasers and Their Agents
Discounts and other remuneration to purchasers
Product support services
Educational grants
Research funding
Risky Relationships: Persons Able to Make or Influence Referrals
Physicians are the best example – anything of value given to them is prohibited
Best protection is an AKS safe harbor
Otherwise, factors to be considered
PhRMA Code on Interactions with Healthcare Professionals
Its guidelines
High-risk manufacturer-physician relationships
Risky Relationships: Agents
Most drug company compliance problems start with sales and marketing personnel
Compliance training for marketing people
Educate about minimum PhRMA Code standards
Corrective action for misbehaving sales agents
Monitor sales force activities
Special issue – compensation for sales agents
Conducting Effective Training and Education
Teach employees to follow compliance-friendly policies & procedures in performing their jobs
Topics to be covered
Instructors
Required participation
Frequency of training
Condition of employment
Developing Effective Lines of Communication
Employees must have effective ways of asking questions about compliance, and reporting incidents that may violate compliance procedures and fraud & abuse laws.
Communication channels offering anonymity and freedom from retaliation, well-publicized
Typical channel media, including periodic surveys
Auditing and Monitoring
Watch over the functioning of the company’s compliance program, assess its effectiveness, and make recommendations for improvement
Regular monitoring of program operations
Periodic audits of its activities and the results they produce
Prospective and retrospective reviews
Topics to focus on
Enforcing Standards Through Well-Publicized Disciplinary Guidelines
Enforced against employees who fail to follow compliance policies and procedures
The level of discipline will depend on the severity of the employee’s misconduct
Discipline could range from oral or written warnings, through suspension, up to dismissal.
Responding to Detected Problems & Developing Corrective Action
Launch an immediate investigation
Violation of law or compliance program rules
Decisive steps to correct any problem
Report legal violations to government authorities – may mitigate any penalties
Review of a Typical Pharmaceutical Manufacturer Compliance Program
Compare the language in a typical drug company compliance program with recommendations made in this chapter and in the OIG Compliance Program Guidance for Pharmaceutical Manufacturers.
In what ways is it better than the recommendations, and in what areas could it stand to be improved
Questions ???
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