We could soon get an indication on the U.S. government's current thinking about pursuing individual healthcare executives for their companies' wrongdoing. An appeal in the highly publicized Purdue case--in which three executives were barred from doing business with federal health programs for 12 years--is under way, the Wall Street Journal reports. And the government's brief in response is due Monday.
Over the past year, FDA and HHS officials have repeatedly promised to hold executives accountable for their companies' actions. And government lawyers have made some forays in that direction. Marc Hermelin, KV Pharmaceutical's ($KV.A) former CEO, pleaded guilty to two misdemeanors as a "responsible corporate officer" after the company produced and distributed oversized morphine tablets. Hermelin was fined $1 million and sentenced to less than 30 days in jail.
The government was less successful in its attempt to go after Forest Laboratories CEO Howard Solomon. HHS moved to exclude him from federal healthcare business, but the agency ended up dropping the attempt after Solomon and Forest fought back.
And then there's the Purdue case. Executives of Purdue Frederick who had pled guilty to misdemeanor violations of the Food, Drug and Cosmetic Act, related to the company's marketing of the painkiller OxyContin are appealing their exclusion from the industry. The Justice Department had gone after them as "responsible corporate officers," rather than alleging that they had participated in the problem promotions or even were aware of them. "The exclusion of these individuals by HHS is unprecedented and unjust," one attorney for the executives told the WSJ.
And here's where we'll hear from the feds. In the wake of HHS's failed attempt to go after Forest's Solomon, some have suggested the agency might back off the idea altogether. The government's response in this case may well indicate whether it's modifying its approach to excluding or prosecuting individuals. Some Justice Department officials say the strategy is, in fact, changing: "There's more focus now on trying to identify whether it's a case where it's appropriate to charge corporate officials with wrongdoing," John Pease, chief of the healthcare fraud unit in the U.S. Attorney's Office in Philadelphia, told the WSJ.