Health care industry regulators sticking to their word

Last year, the Department of Health and Human Services said it would start invoking a seldom-used policy under the Social Security Act against pharmaceutical executives. The policy allows for corporate leaders in the health care industry to be banned from doing business with the government if the drug company is guilty of criminal misconduct.

The DHH has made good on that promise, as it recently notified the executive of Forest Laboratories that the government intends to ban the company from selling their medication to the government. The notice was received after Forest Laboratories made a plea agreement with the government relating to the company’s marketing of its popular antidepressants Celexa and Lexapro. Under the agreement, Forest is to pay $313 million in criminal and civil penalties over sales-related misconduct.

Under this policy, health care companies would not be able to do business with government entities including Medicare, Medicaid, and the Veteran’s Administration.

This enforcement brings up new issues in the world of health care prosecutions. This attempt by the government may lead to the ousting of pharmaceutical executives, like the executive of Forest Laboratories, in order to allow the companies to continue selling their drugs to Medicare and Medicaid. However, the complications arise when executives, like that of Forest Laboratories, aren’t actually accused of misconduct but are being targeted by the DHH. Lawyers not involved directly in the suit say that the attempt to punish an executive not accused of misconduct could “tie up the industry’s day-to-day work in legal knots.”

The investigations by the DHH are likely just the beginning. I expect this enforcement will lead to increased health care fraud enforcement on a national and local level. The Law Office of John Freeman handles white collar criminal investigations including health care, insurance, and mortgage fraud.