Congress Looks to Ban Pharma Fraud Masterminds

In the opening article of this month’s issue of Nature Medicine, Nolan & Auerbach partner Jeb White advocated sending the masterminds of pharmaceutical fraud to prison. While this idea is still percolating on Capitol Hill, Congress is, at least, taking strides to prevent these masterminds from repeating their criminal mischief with other pharmaceutical companies.

In a bill that overwhelming passed the House of Representatives, corporate executives of companies criminally convicted of health care fraud would be banned from doing business with Medicare and Medicaid. Moreover, the legislation gives HHS-OIG the ability to ban parent companies that committed fraud through their subsidiaries.

Currently, there are glaring loopholes. Under the existing law, executives at companies that are convicted of fraud can be banned from doing business with Medicare and Medicaid, but if that individual had left the company by the time of conviction, there is no mechanism to enforce a ban. This legislation would close this loophole.

This bipartisan bill had 19 co-sponsors, from both sides of the aisle, and it was in response to mounting criticism, including from Lewis Morris, the HHS OIG chief counsel, who recently highlighted this loophole in his congressional testimony.

“When masterminds of pharmaceutical fraud drive their companies into criminal culpability, we should make sure that they are not permitted behind the wheel of another company, particularly when our Medicare and Medicaid dollars are along for the ride,” said Nolan & Auerbach partner Jeb White. “This bill would put the brakes on this endless joyriding by dishonest corporate executives.”

For more information about qui tam law and pharmaceutical fraud, contact Nolan and Auerbach, PA.