Last week Assistant Attorney General Stuart Delery provided a speech to the CBI Pharmaceutical Compliance Congress “ the message was clear. The Department of Justice will be seeking more than financial punishment for pharmaceutical companies who are found to be in noncompliance.
Stuart Delery is head of the Civil Division at the Department of Justice and oversees much of the federal government’s civil litigation, including FDA and FDCA litigation. The speech was given at a gathering dedicated to compliance in the pharmaceutical industry, and reaffirmed the DOJ’s commitment to improving the nation’s health care system.
The message also confirmed that the DOJ is pursuing a broader range of health care fraud matters than ever before, citing increased scrutiny of nursing homes, Medicaid fraud, misbranding of drugs, and pharmaceutical kickbacks. Once case in particular that the Delery cited was that of a pharmaceutical company found to be repeatedly non-compliant with FDA standards. The case involved the negligent distribution of adulterated drugs which resulted in 3 felonies and a $500 million fine.
Typically in the past, organizations found to be in non-compliance with FDA standards were issued a fine and asked to change the non-compliant behavior. On this particular case, the FDA had started the investigation four years prior and requested an establishment of policies and procedures. The company followed suit by creating policies and procedures, but the organization did not produce results.
What Went Wrong?
Policies alone are not enough, stated Delery in his emphasis that financial punishments are not enough for lasting change to the organization. Real change is the result of applied policies and procedures; how can organizations ensure the most effective compliance programs?
As these settlements have made clear, we are not interested in merely collecting a large fine and moving on to the next case. We strive to give companies the incentives “ and the tools “ to craft better compliance practices in the future. And we want to work together with you, the people most responsible for compliance, to achieve real change. -Stuart Delery, Keynote Address CBI Pharmaceutical Compliance Congress
Collaborating on Creation
The pharmaceutical case and the Stuart Delery’s speech highlight the need for robust compliance solutions that manage the entire policies and procedures life cycle, not just the establishment of policies. This will require organizations to establish an atmosphere that is conductive to policy and procedure collaboration. High level executives will have to include functional area managers in the creation process to create policies that are relevant to the actual existing conditions.
After creating relevant policies, they must be distributed in a way that is easily accessible to the employee. Employees must be notified and acknowledge that new policies are posted; it is no longer best practice to post them in a policy area and expect employees to read them on their own.
Once policies and procedures are distributed, employers will have to ensure their employees understood the material. Polices are great when they are in place, but if employees do not have a solid level of comprehension they will be impossible to enforce. Managers will have to have a proactive approach to all aspects of policy implementation.
The Department Of Justice: Moving Forward?
Stuart Delery’s speech outlines a new path for Department of Justice, one that no longer just provides a financial burden for non-compliance. It calls for greater transparency and responsibility within the pharmaceutical system, as misconduct undermines the trust in our system. By providing financial and non-monetary incentives, the DOJ is finally realizing that financial burden is not enough to provide lasting results. What will be very interesting to see is how these translate to other industries in the future; if their efforts are successful here, will we see these similar changes in energy, transportation, and commerce?
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