Pharmaceutical Executives and In-House Counsel Beware: U.S. District Court Affirms Exclusion of Former Purdue Executives Under "Responsible Corporate Officer" Doctrine

On December 13, 2010, the United States District Court for the District of Columbia affirmed the decision of Kathleen Sebelius, Secretary of the Department of Health and Human Services (the "Secretary") excluding three former pharmaceutical executives for twelve years from participation in Medicare, Medicaid, and all other federal health care programs. The exclusion – the latest weapon in governmental assaults on pharmaceutical company wrongdoing – was imposed by the Office of Inspector General of the Department of Health and Human Services ("OIG"). The executives, who included the company's former general counsel, were excluded notwithstanding the fact that they asserted no knowledge of the misbranding conduct for which their former employer, Purdue Frederick Company ("Purdue"), previously settled with the government. The decision illustrates the government's enhanced focus on individual liability and punishment in the context of fraud and abuse by health care entities, and it represents a significant development in enforcement activity in this area. Now more than ever, we urge our health care clients – providers, suppliers, and manufacturers alike – to consider the potential impact of the OIG's permissive exclusion authority when defending against allegations of fraud or abuse involving federal health care programs. To read our full alert, summarizing the court's opinion and related background, click here. This post was written by Elizabeth B. Carder-Thompson and Katie C. Pawlitz.

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