In This Issue:

New Pressures on the Pharma and Medical Device Industry Highlight the Importance of Compliance Programs...Page 1-2; Marketing Do’s and Don’ts: What Senior Management of Commercial-Stage Life Sciences Companies Need to Know about Interactions with Healthcare Professionals...Page 1, 11-13; Life Science Venture Financings for WSGR Clients ...Page 3-4; Show Me the Money: The Results of the Therapeutic Discovery Project Tax Credit and Grant Program...Page 4-5; Medical Technology Innovation Scorecard...Page 6-9; Saints Capital Publishes Guide to Secondary Transactions ...Page 10; Recent Life Sciences Highlights...Page 14-15; and Upcoming Life Sciences Events...Page 16.

New Pressures on the Pharma and Medical Device Industry Highlight the Importance of Compliance Programs

By Leo P. Cunningham, Partner, and Lee-Anne Mulholland, Associate (Palo Alto Office)

You get the behavior you incentivize. That is why bribes work—and are illegal. And that is why the government offers financial incentives—bribes of its own—for “whistleblowers” who report misconduct. Pharmaceutical and medical device companies have traditionally focused their compliance efforts on federal healthcare laws, such as the anti-kickback statutes and regulations from the Food and Drug Administration and U.S. Department of Health and Human Services. The qui tam provisions of the False Claims Act have created an effective incentive for reporting violations by healthcare companies. But there are other anti-corruption laws out there and other incentives for reporting violations. Healthcare companies should ensure that their compliance efforts factor in all relevant anti-corruption laws and provide their own incentives for internal reporting of potential violations.

Domestic anti-kickback laws provide criminal penalties for remunerations, including bribes and kickbacks, paid to doctors or hospitals in return for referrals or purchases reimbursable under government healthcare programs. But companies doing business abroad must also be wary of the Foreign Corrupt Practices Act (FCPA), which prohibits offers or payments to “foreign officials” for the purpose of securing an improper advantage to obtain or retain business....