The OIG’s Continued Focus on Corporate Executives
There is no doubt that executives of pharmaceutical and medical device manufacturers face increasing risk of personal criminal liability and exclusion from the Federal health care programs should their companies run afoul of Federal health care laws—even if they personally have done nothing wrong. In recent years, the United States Department of Justice has increasingly threatened to prosecute individual corporate executives of companies that violate the Food, Drug & Cosmetic Act under the Responsible Corporate Officer (‘‘RCO’’) doctrine, which holds that ‘‘responsible’’ senior executives can be held criminally liable if they fail to prevent certain corporate criminal conduct. On a parallel track, the Department of Health and Human Services’ Office of Inspector General has threatened to exclude individual corporate officers in various circumstances simply because of their status and without proof of individual culpability. The severity and persistency of this risk is such that earlier this year at least one insurance company began offering policies that will cover the defense costs related to RCO prosecutions and administrative debarment/exclusion proceedings to companies in the health care and life science sectors. The availability of a commercial insurance product of this type reflects market recognition of the continued and ongoing risks faced by individual executives in light of the Government’s enforcement priorities.
Reproduced with permission from Pharmaceutical Law & Industry Report, 10 PLIR 1545, 12/07/2012. Copyright 2012 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com