The Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued its Semiannual Report to Congress reporting big enforcement numbers related to its activities during the six-month period from October 1, 2013 to March 31, 2014. The key enforcement figures for the pharmaceutical and medical device industries are: 427 criminal and 266 civil actions, including False Claims Act lawsuits and civil monetary penalty (CMP) settlements, with related investigative receivables due to HHS amounting to $2.02 billion and $811.9 million in non-HHS investigative receivables.
These figures represent increases over the previous six-month reporting period, with a 3.4 percent uptick in criminal actions, 17.7 percent growth in civil actions, a 49.6 percent surge in investigative receivables due to HHS, and an astounding 113.8 percent increase in additional non-HHS investigative receivables. Although industry may have seen signs of progress in risk management when fiscal year 2013 HHS and non-HHS combined receivables were down $1 billion or 16.7 percent year over year from fiscal year 2012, we are seeing a reversal of that trend this year.
Even though they represent a smaller portion of enforcement-dollars, it is also important to note that this period’s $18.7 million in CMPs and assessments increased by 133.8 percent from the last reporting period’s $8 million. With OIG’s recent proposed rule to implement its significantly expanded authority under the Affordable Care Act, CMP and assessment data may increase in future reports.
At the same time these enforcement activities have been on the rise, case-specific, formal guidances on the application of the anti-kickback statute and safe harbor provisions are down. OIG issued only nine opinions out of 29 requests compared to the last reporting period’s 11 out of 24.
As FDA regulators have already been seeing increasing push-back from industry on first amendment grounds, and the Senate Health, Education, Labor, and Pensions Committee has requested clarification from FDA Commissioner Margaret Hamburg on the use of draft guidances, it is possible that we will see more variation in OIG enforcement numbers in the future.