Holding Pharmaceutical and Medical Device Executives Accountable as Responsible Corporate Officers

Abstract

ImportanceWhen a drug or medical device company violates federal law, the government has a powerful tool to use: the Park doctrine. The aim of the doctrine is to protect patients from the harms of an unsafe or fraudulent medical marketplace by targeting the executives who run the companies that make revenues on these products while violating federal law, rather than have that risk borne by patients or impersonal corporate entities; however, public reports of drug and device company executives being prosecuted in Park doctrine cases are uncommon.ObjectiveTo identify Park prosecutions and characterize their role in US Department of Justice (DOJ) enforcement efforts related to misconduct in the drug and medical device industry.Evidence ReviewA systematic search of Westlaw, Google Scholar, DOJ press releases, and the legal literature was conducted.FindingsThirteen cases of executives from 6 drug and medical device companies prosecuted under the Park doctrine since 2000 were identified. The prosecutions resulted in 11 guilty pleas and 2 jury trials, leading to 2 convictions. Of the 6 companies, 3 were drug manufacturers, 2 were medical device manufacturers, and 1 was a compounding pharmacy. All 3 drug manufacturers were opioid manufacturers, of which 2 executives were charged for unlawful promotion, and 1 was charged for manufacturing errors. Both device manufacturer executives were charged with unlawful promotion. All but 3 prosecutions alleged the defendants’ complicity or personal involvement in the misconduct, which Park does not require. By contrast, most large settlements with the DOJ over alleged misconduct in the past 2 decades did not result in individual liability for executives.Conclusions and RelevanceThese findings suggest that the government has not exercised the full scope of its authority to prosecute corporate officials responsible for the illegal behavior of the drug and device companies they run. Enforcement under a reinvigorated Park doctrine could better promote the doctrine’s goal of protecting patients.

Statutory Authority for Medicare Coverage Decisions—CMS Is an Independent Federal Agency

“…The article from Daval and Kesselheim is critically important and timely. The development of biopharmaceuticals, including astonishingly expensive drugs designed to treat common disorders, such as Alzheimer disease, has changed the game for Congress and the Medicare program.…”

“…In this issue of JAMA Internal Medicine , authors (and legal scholars) Daval and Kesselheim illuminate these complex issues by outlining the legal bases for, and limitations on, CMS’s ability to limit taxpayer coverage of FDA-approved drugs and other products. There is wide concern that pressure from the pharmaceutical and medical device industries and industry-supported disease advocacy organizations may be leading the FDA to approve drugs and devices that have little or no evidence in establishing clinical benefit.…”

“…Daval and Kesselheim review the history of CMS’s efforts to develop tools to apply the statutory reasonable and necessary criteria to Medicare coverage, including national coverage determinations and coverage with evidence development (CED), an approach that conditions coverage on the manufacturer conducting further research on safety and efficacy. They describe one promising program from CMS that included drug cost as part of its reasonableness determination, which is called the least costly alternative initiative, that was invalidated in 2008 when challenged in court .…”

Accountability of Health Care Executives for Illegal Activities of Pharmaceutical and Medical Device Companies

“…Although the US Department of Justice (DOJ) has had a seemingly endless string of blockbuster financial settlements with pharmaceutical and medical device companies, there has been a relative lack of successful prosecutions of individual executives . In this issue of JAMA Internal Medicine , a Special Communication from Daval and colleagues examines the reasons why pharmaceutical and medical device executives have rarely been held criminally responsible for the illegal activities of their companies.…”

“…The types of criminal prosecutions that the DOJ might pursue remains an open question, however. Daval et al argue forcefully for an increase in criminal charges using the Park doctrine—prosecutions of corporate officers based on their positions of authority within an organization, without evidence that the executive had an intent to break the law or even an awareness of the wrongdoing. But, as the authors demonstrate, the DOJ has been reluctant to test the willingness of judges and juries to hold individuals criminally liable where moral blameworthiness is questionable.…”