The U.S. Department of Justice (DOJ) won a record $4.9 billion in settlements and judgments in civil fraud cases in the fiscal year ending Sept. 30, bringing total recoveries under the False Claims Act (FCA) to $13.3 billion since January 2009 – the largest four-year total in the DOJ's history and more than a third of total recoveries since the Act was amended 26 years ago to increase incentives for whistleblower lawsuits.
The recoveries included record amounts for health care fraud, where recoveries topped $3 billion for the first time in a single fiscal year. Although most of those were related to Medicare and Medicaid fraud, enforcement actions against the pharmaceutical and medical device industry were the source of some of the largest recoveries. They included $1.5 billion by London-based GlaxoSmithKline plc to resolve FCA allegations that it promoted a handful of drugs for off-label use and paid kickbacks to physicians to prescribe them, that it made false and misleading statements concerning the safety of the diabetes drug Avandia (rosiglitazone) and that it reported false best prices and underpaid rebates owed under the Medicaid drug rebate program.
The DOJ also recovered $441 million, including interest, from Merck & Co. Inc., of Whitehouse Station, N.J., to resolve allegations that the company promoted the painkiller Vioxx (rofecoxib) for off-label use in rheumatoid arthritis and that company representatives made inaccurate statements about the drug's cardiovascular safety to increase sales, resulting in payments by federal health care programs.
PTO to Conduct Grace Period Study
The U.S.' patent grace period, which allows individuals to improve upon their ideas by sharing them with the research and business communities without jeopardizing their intellectual property interests, figures prominently in international talks on patent law harmonization. According to the U.S. Patent and Trademark Office (PTO), many European countries lack adequate grace periods, and the consequences are not fully understood.
Consequently, the PTO plans to conduct a study to estimate the commercial opportunities lost as a result of the lack of grace periods. As part of the study, the PTO plans to survey European researchers from select European research institutions who have published journal articles disclosing potentially patentable materials during a five-year period. The study is designed to provide current, quantitative data on the effects of premature disclosure on European patenting, with data collected from the survey used to estimate the value of lost commercial opportunities in Europe due to the lack of grace periods for those patents.
The PTO is accepting public comment on the study for the next 60 days through the federal rulemaking portal at www.regulations.gov, or by sending email to InformationCollection@uspto.gov.
PhRMA Endorses Russia as Trade Partner
The Pharmaceutical Research and Manufacturers of America (PhRMA) endorsed the move by Congress to approve permanent normal trade relations (PNTR) for Russia. PhRMA president and CEO John Castellani predicted improved trade relationships with Russia will bolster U.S. biopharmaceutical jobs and exports.
"The U.S. innovative biopharmaceutical industry supported Russian accession to the World Trade Organization (WTO)," which Russia joined in mid-2012, he said. "With Congress now passing PNTR, the United States will receive the same benefits from Russia's accession agreement as all other WTO members."
The U.S. government should continue to pursue public policies that enhance intellectual property rights protection and the removal of critical barriers to market access, Castellani added. "Establishing PNTR with Russia helps address many of the concerns affecting our industry in exporting to and competing effectively in Russia," he said.