FDA’s Global Engagement

Product safety has gone global.  It is one of the byproducts of our growing global village.  Despite the volume and variety of domestically produced products, U.S. consumers continue to show increasing demand for imported goods of all kinds.  Since the U.S. Food and Drug Administration (FDA) has responsibility for ensuring the safety of most of the products Americans consume, the agency’s work has gone global.  It is an expanding regulatory frontier. 

In April 2012, FDA published a report, which documents how the agency works (through overseas inspections and collaborations with foreign governments) to ensure that the imported foods, medical products, and other goods it regulates meet the same high standards for safety and quality set for products manufactured domestically. One major area involves medical products.

 The Global Drugstore

 According to FDA, 40% of drugs (generic and prescription) consumed in the U.S. are manufactured outside of the U.S.  Few countries, if any, have the same regulatory controls (including clinical review process, manufacturing and quality standards) that the FDA requires of U.S.-based manufacturers of the food and medical products it regulates.

 Globalization of the medical product industry presents regulatory challenges from product development to final use by the consumer.  For example, 

• The clinical trials of all medical products required for FDA approval are increasingly conducted abroad, adding the complexity of the review process.
• Many U.S. consumers can purchase medicines via the Internet directly from foreign sources, increasing their potential exposure to unsafe or ineffective medical products.
• Many medical devices are sold in nearly identical forms around the world but are known by different trade names, making it difficult to warn medical professionals and consumers about potential dangers.

 A Global Strategy

 Recognizing the fact that globalization is not a transitory phenomenon, FDA has formulated a global strategy to increase its regulatory role in the international public health community. Some of the components of that strategy include: 

• Opening new FDA posts overseas in key areas such as China, India, the Middle East, Europe, and Latin America. These help FDA build strong relationships with officials overseas and see first-hand how foreign-based facilities are operating;
• Developing strong and consistent international regulatory standards to allow countries to share a common foundation of science-based goals for product safety and quality. FDA’s Office of International Programs works with FDA’s centers and offices to share information, strategies and tools with other countries;
•  Working with other countries to monitor, prepare for, and respond to public health challenges, such as pandemics (widespread epidemics of infectious disease), natural disasters or broad distribution of tainted FDA-regulated products;
• Working with international partners to advance the science used to assess the safety and effectiveness of regulated products, which can lead to more cost-effective and timely product development. 

CLICK HERE for a copy of the bulletin that summarizes the report. 

GO HERE to get a full copy of the entire Global Engagement report.

 

Copyright Rachel Agheyisi, Report Content Writer, and Regulatory Compliance Digest Blog

Before You Make That Product Claim

As we presented in an earlier article on this blog, the U.S. Food and Drug Administration (FDA) has legal authority covering products such as biologics, drugs, foods, veterinary products, cosmetics, and medical devices.  The FDA’s Office of Regulatory Affairs (ORA) leads the agency’s field activities relating to inspections and enforcement.  It is, therefore, important for manufacturers to be current on all legal requirements for regulated products.  It makes business sense because knowledge is critical for compliance, risk management, and avoidance of non-compliance costs.

However, it appears some manufacturers assume they can operate under the FDA radar and get away with some unapproved products, manufacturing practices, and product claims.  Perhaps they will be successful in the short term, but in the age of Internet marketing and aggressive enforcement activity, non-compliant operators will ultimately be spotted and “tagged”.

Such is the case of a Kentucky-based firm, which manufactures and distributes products for animal consumption.  The firm recently received a warning letter from the FDA’s Cincinnati District Office.  According to the letter, the agency reviewed the claims included in the labeling of the firm’s products, and deemed them non-compliant.

What is noteworthy is the fact that the FDA inspection/review included the claims made on the manufacturer’s website where the products are available for sale!  The product claims indicated that the products in question are intended for use in the mitigation, treatment, or prevention of disease in animals.  The FDA associates such claims with drugs, which would make the manufacturers’ products new drugs.  The problem is that the products had not received prior FDA approval as new animal drugs. Consequently marketing them violates the Federal Food, Drug, and Cosmetic Act (the umbrella Act for the FDA’s legal authority).

The warning letter indicated that the manufacturer‘s earlier corrective action failed to implement the post-inspection changes requested by the FDA.  It reiterated the manufacturer’s responsibility for ensuring that all of its products comply with the Act.

The company was given 15 working days of the receipt of the warning letter to bring its products into compliance with the law, including a review of its websites, product labels, and promotional materials.  Failure to correct the violations promptly may result in enforcement action without further notice from FDA.  Enforcement action may include, but is not limited to seizure of violative products and/or injunction against the manufacturers and distributors of violative products.

The bottom line is that non-compliance is disruptive and potentially costly financially and in terms of negative impact on business reputation.  Non-compliance risks and costs are easy to avoid with a little due diligence.

CLICK HERE for a full copy of the FDA’s warning letter to the product manufacturer.

 

Copyright Rachel Agheyisi, Report Content Writer, and Regulatory Compliance Digest Blog

Another Entry from the FDA’s Warning Letter Inbox

It has been a while since I reported on warning letters issued by the U.S. Food and Drug Administration (FDA) as part of its inspection, compliance, enforcement and criminal investigation activities. Well this post shows that the FDA continues to put violators on notice.

As described in a previous article on this blog, FDA warning letters fall into three broad categories depending on the nature of the violation and the corrective action required.  For example, when the FDA finds that a manufacturer has significantly violated FDA regulations, the agency notifies the manufacturer in the form of a general warning letter.  A general warning letter identifies the violation, such as poor manufacturing practices, problems with product claims, or incorrect directions for use of a product and the specific corrective actions necessary within a timeframe.  The FDA may issue a close-out letter once the agency has completed an evaluation of the corrective actions undertaken by a firm in response to a warning letter. 

This article describes one such general warning letter issued recently to a Pennsylvania-based dietary supplement manufacturer by the FDA’s Philadelphia District.  According to the letter, FDA inspectors found a number of significant violations of the Current Good Manufacturing Practice (CGMP) regulations for dietary supplements (CFR, Title 21, Part 111).

Specifically, the CGMP violations, which cause the dietary supplement products to be adulterated, include the following: 

• The manufacturer’s quality control personnel released finished batches of dietary supplements which did not conform to product specifications established in accordance with 21 CFR 111.70(e).  For example, one lot of finished product did not include a dietary ingredient that is a specified component of the product.
• The manufacturer failed to prepare and follow a written master manufacturing record (MMR) for each unique formulation of dietary supplement that it manufactures, and for each batch size, to ensure uniformity in the finished batch from batch to batch as required by 21 CFR 111.205(a).
• The manufacturer failed to verify that its finished batches of dietary supplements meet finished product specifications for identity, purity, strength, composition, and for limits on those types of contamination that may adulterate or that may lead to adulteration of the finished batch, as required by 21 CFR 111.75(c).
• The therapeutic claims in the manufacturer’s product labeling establish that the product is a drug indicating that it is intended for use in the cure, mitigation, treatment, or prevention of disease.  However, because the product is not generally recognized as safe and effective for the claimed benefits, the product is a “new drug” according to Section 201(p)(1) of 21 U.S.C. Section 321.  By law, a new drug may not be marketed in the U.S. without prior approval from FDA.  This means that the marketing of the manufacturer’s dietary supplement product with therapeutic claims violates the Act.

 The dietary supplement manufacturer was given 15 days to notify the FDA in writing of the specific steps it had taken to correct the violations and to ensure that similar violations do not occur in the future.

CLICK HERE for a copy of the FDA warning letter.

 

Copyright Rachel Agheyisi, Report Content Writer, and Regulatory Compliance Digest Blog

 

National Medicare-Medicaid Payment Summit

This just out:

 The First National Medicare-Medicaid Payment Incentives and Penalties Summit, www.MedicareMedicaidPaymentSummit.com, will be held on May 30 – June 1, 2012 at the Hyatt Regency Crystal City in Washington, DC.

What it is and how to participate:

• An outcome-based rather than an output-based compliance review program
• A Hybrid Conference and Internet Event
• The Leading Forum on Recovery Audits, Readmissions, Value-Based Purchasing, HACs and Never Events, and Managing to Medicare Margins
• May 30 – June 1, 2012
• Includes the RAC and Readmissions Certificate Programs
• Co-located with Seventh National Medicaid Congress
• Onsite at the Hyatt Regency Crystal City, Washington, DC
• Online In Your Own Office or Home live via the Internet with Six Months Access

For more information on registration, conference speakers, and topics, go to www.MedicareMedicaidPaymentSummit.com.

 

Entries from the Medicare Fraud File

In an earlier article on this blog, we presented examples of possible Medicare fraud schemes as identified by the U.S. Department of Health and Human Services (HHS).  The point was clear: fraudsters prey on the vulnerable and lure people in with the promise of “painless” financial reward.  These fraudsters create a façade of legitimacy and masquerade as professionals.  However, increased enforcement by the Health Care Fraud Prevention & Enforcement Action Team (HEAT) these financial parasites are being exposed and put out of action.

 Here are two entries from recent anti-Medicare fraud enforcement activities.

 The Greedy Dallas Doctor:   On February 28, 2012, a Dallas-based physician and the office manager of his medical practice, along with five owners of home health agencies, were arrested on charges related to their alleged participation in a nearly $375 million health care fraud scheme involving fraudulent claims for home health services.  HEAT has added sophisticated data analysis to its investigative tools.  In the case of the Dallas fraud scheme, the agents identified suspicious billing spikes, which were far in excess of industry averages.

According to the indictment filed in the Northern District of Texas, the physician owned and operated an association of health care providers that primarily provided home health certifications and performed patient home visits.  Between January 2006 and November 2011, the association certified more Medicare beneficiaries for home health services and had more purported patients than any other medical practice in the United States.  Additionally, the association allegedly performed unnecessary home visits and ordered unnecessary medical services.  These certifications and home visits allegedly resulted in more than $350 million being fraudulently billed to Medicare and more than $24 million being fraudulently billed to Medicaid by the physician and his co-conspirators.  

 In addition to the indictment, the Centers for Medicare and Medicaid Services (CMS) announced the suspension of an additional 78 home health agencies associated with the physician based on credible allegations of fraud against them.

 The investigative agents described the scheme as a well-oiled fraudulent enterprise, which not only defrauded federal Medicare and Medicaid and private health insurance programs, but also victimized the elderly, the disadvantaged, and those who are at a vulnerable time in their lives due to legitimate health issues. 

 CLICK HERE for details of this elaborate fraud scheme, including the identities of the conspirators.

 The Fraudulent Houston Assistant Administrator:  In February 2012, an assistant administrator of a Houston hospital pleaded guilty for his role in a $116 million Medicare fraud scheme involving false claims for mental health treatment.  Specifically, the administrator pleaded guilty to one count of conspiracy to commit health care fraud, one count of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks, and five counts of paying or offering to pay health care kickbacks. 

 According to court documents, the hospital administrator permitted the use of the hospital’s valid Medicare provider number to submit claims to Medicare for services that were not medically necessary, and in some cases, never provided.  Many of the beneficiaries for whom hospital submitted claims did not have severe mental illness.

 In his plea, the administrator admitted that he and his co-conspirators submitted approximately $116 million in claims to Medicare for partial hospitalization program (PHP) services purportedly provided by the hospital to the recruited beneficiaries, when in fact the PHP services were medically unnecessary or never provided.   The fraudulent administrator is scheduled to be sentenced on May 25, 2012.  He faces a maximum sentence of 10 years in prison for the conspiracy to commit health care fraud count, five years in prison for the conspiracy to defraud the United States count and five years in prison for each health care kickbacks count.

 CLICK HERE for details of this case and follow up information.

 

  

Copyright Rachel Agheyisi, Report Content Writer, and Regulatory Compliance Digest Blog

 

Latest FDA Guidance on Clinical Investigations

 Periodically, the U.S. Food and Drug Administration (FDA) publishes guidance to industry on various matters under its regulatory jurisdiction.  Typically, the agency would publish a draft copy and request input from the American public during a specific period.  Upon the expiration of the comments period, the agency publishes a final version of the guidance, which represents the agency’s current thinking on the subject-matter.

Although FDA guidance documents do not establish legally enforceable requirements, they nevertheless, influence industry.  Consequently, it is important for industry to be attuned to FDA activity in this area, and to participate in the comment/review period preceding the final guidance.

 THE DRAFT GUIDANCE

 In August 2011, the FDA published a draft guidance intended to assist sponsors of clinical investigations in developing risk-based monitoring strategies and plans for investigational studies of medical products, including human drug and biological products, medical devices, and combinations thereof.  Recognizing that sponsors have a variety of monitoring approaches, the guidance recommends greater use of centralized monitoring strategies.

 According to the FDA, there is a growing consensus that risk-based approaches to monitoring, such as focusing on the most critical data elements, are more likely to ensure subject protection and overall study quality, and will permit sponsors to monitor the conduct of clinical investigations more effectively than routine visits to all clinical sites and 100% data verification.

 The primary goal of the guidance is to enhance human subject protection and the quality of clinical trial data.  This goal aligns with the objective of most sponsors of clinical investigations, which underscores the importance of industry input to the final guidance.  Industry had 90 days to comment on the draft recommendations.

COVERAGE OF THE FINAL GUIDANCE

 In February 2012, the FDA published the final version of the Guidance for IRBs, Clinical Investigators, and Sponsors:  IRB Continuing Review after Clinical Investigation Approval.  The document represents the agency’s current thinking on the topic.  This document supersedes the 1988 Information Sheet, Continuing Review After Study Approval published by the FDA Office of Health Affairs.

 As indicated in the introduction to the final document, the guidance is intended to assist institutional review boards (IRBs) in carrying out their continuing review responsibility under 21 CFR 56.108(a) and 56.109(f) by providing recommendations regarding the criteria, process, and frequency of continuing review.  In addition, the guidance is intended to help clinical investigators and sponsors better understand their responsibilities related to continuing review.

 What exactly does the guidance cover?  The following highlights the contents of the final guidance. 

1.       Criteria for Approving Research During Continuing Review

The IRB makes its continuing review determination by considering whether any new information is available that would affect the IRB’s prior finding that the research meets the criteria in 21 CFR 56.111 (the relevant FDA regulation).  Specifically, in order to approve research, the IRB must determine that all of following requirements are satisfied:

• Risks to subjects are minimized;
• Risks to subjects are reasonable in relation to anticipated benefits, if any, to subjects, and the importance of the knowledge that may be expected to result;
• Selection of subjects is equitable;
• Informed consent will be sought from each prospective subject or the subject’s legally authorized representative, and appropriately documented;
• Where appropriate, the research plan adequately provides for monitoring the data collected to ensure the safety of subjects;
• Where appropriate, there are adequate provisions to protect the privacy of subjects and to maintain the confidentiality of data;
• Appropriate additional safeguards are included to protect vulnerable subjects; and where the study involves children, the research complies with 21 CFR Part 50, Subpart D. 

2.      Process for Conducting Continuing Review

Continuing review takes place at a convened meeting of the IRB.  Investigators are responsible for ensuring that studies they conduct comply with applicable regulatory requirements.  FDA encourages IRBs to make investigators aware of the IRB’s procedures and recommends that the IRB’s written procedures call for submission of a detailed list of information for consideration by the IRB in continuing review.

 The necessary information includes the following:

•  A written progress report/brief project summary;
• The latest version of the protocol and sample informed consent document(s) in use at the site;
• Any proposed modifications to the informed consent document or protocol;
• The current Investigator’s Brochure, if any, including any modifications;
• Any other significant information related to subject risks, such as the most recent report, if any, from data monitoring committees (DMCs);
• Aggregate information about relevant regulatory actions occurring since the last review that could affect safety and risk assessments. 

3.      Key Topics to Consider During Continuing Review

 FDA recommends that when conducting continuing review and evaluating whether research continues to satisfy the criteria for IRB approval of research, IRBs should pay particular attention to the following areas:

•  Risk Assessment;
• Adequacy of Informed Consent;
• Local Issues, and
• Trial Progress 

4.      When Expedited Review Procedures May Be Used for Continuing Review

 This regulation permits continuing review to be conducted using expedited procedures if certain requirements are met.  Where a study qualifies for expedited review, the review may be conducted by the IRB chairperson or one or more experienced reviewers designated by the chairperson from among the IRB members. 

 The current list of research eligible for expedited review identifies nine categories of research.  Research that meets the requirements of categories (1) through (7) at the time of review may qualify for expedited review whether that is initial or continuing review.  In general, research that qualified for expedited review under one of these seven categories at the time of initial review will continue to qualify for expedited continuing review.  Categories (8 and 9) apply only to continuing review of research previously approved by the convened IRB. 

5.      Frequency of Continuing Review

 FDA regulations  require an IRB to conduct continuing review of research at intervals appropriate to the degree of risk posed to the subjects, but not less than once a year.  However, more frequent reviews may be appropriate (i.e. conducted more than once per year), for example, in cases where study risks require close monitoring.

 FDA recommends that the IRB should consider the following factors when deciding on an appropriate interval for continuing review:

• The nature of and any risks posed by the clinical investigation;
• The degree of uncertainty regarding the risks involved;
•  The vulnerability of the subject population;
• The experience of the clinical investigator in conducting clinical research;
• The IRB’s previous experience with that investigator and/or sponsor (e.g., compliance history, previous problems with the investigator obtaining informed consent, prior complaints from subjects about the investigator);
• The projected rate of enrollment; and
• Whether the study involve novel therapies. 

6.      Determining the Effective Date of Initial IRB Approval and the Dates for Continuing Review

 The guidance discusses likely scenarios regarding the logistics of determining the effective dates of the IRB initial approval, the expiration of the approval and continuing review.  FDA recommends that the IRB’s written procedures should describe how the IRB determines the effective date of approval for the study and how the date and period of approval is communicated to the clinical investigator.

 For example, FDA recognizes the logistical advantages of keeping the expiration date of the IRB approval period constant from year to year throughout the life of the research.  The agency recommends that IRBs that adopt a procedure for maintaining fixed anniversary dates for the expiration of annual IRB approvals should include a description of this procedure in their written procedures. 

7.      Communicating the IRB’s Continuing Review Determination

 Under the FDA regulations, the IRB must notify investigators and the institution in writing of its decision to approve or disapprove the proposed research activity or of modifications required to secure IRB approval of the research activity.  If the IRB decides to disapprove a research activity, it should include the reasons for its decision and give the investigator an opportunity to respond in person or in writing.

FDA encourages sponsors, clinical investigators, and IRBs to communicate with one another to protect the rights and welfare of study subjects.

SUMMARY

 While the above includes the gist of the guidance document, it is important that the IRBS, clinical investigators, sponsors and other interested parties do their due diligence and check out the full document available at the FDA website.  As reflected in other articles on this blog, ignorance or failure to comply with the regulatory requirements result in unpleasant and probably costly consequences. 

CLICK HERE to get your copy of this guidance.

  

Copyright Rachel Agheyisi, Report Content Writer, and Regulatory Compliance Digest Blog

 

The Face of Medicare Fraud

We don’t need an expert to tell us that fraud costs money.  Health care fraud costs the system money.  The irony is that we are the “system” – all of us who receive our health care services in the U.S. are victimized by fraudsters because they steal the resources that belong to us; resources that should legitimately go toward improving the care we receive.

As a small business owner, I feel the pain of paying my medical insurance premium, copays and related expenses.  It pains me more to hear that criminals are contributing to the rising costs.  But my pain turns to anger when I read of the ways fraudsters are taking advantage of the Medicare program designed to help the elderly and Americans with limited resources.  Seniors, facing high medical costs, are being forced to make choices that jeopardize their wellbeing.

This means that exposing and eliminating fraud is the business of everyone who cares about getting better and more affordable care.  The first step is to recognize what Medicare fraud looks like.

What is Medicare Fraud?

According to the U.S. Department of Health and Human Services (HHS), fraud schemes may be carried out by individuals, companies, or groups of individuals.  The HHS provides the following examples of possible fraud schemes:

• A health care provider bills Medicare for services you never received.
• A supplier bills Medicare for equipment you never got.
•  Someone uses another person’s Medicare card to get medical care, supplies, or equipment.
•  Someone bills Medicare for home medical equipment after it has been returned.
•  A company offers a Medicare drug plan that has not been approved by Medicare.
•  A company uses false information to mislead you into joining a Medicare plan.

This means that people involved in medicare fraud often look like the “real thing”.  The schemes are often elaborately set up to mimic legitimate health care service providers and involve a network of conspirators.

Recent Medicare Fraud Cases

As discussed in another article, under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services (HHS) acting through the Department’s Inspector General (HHS/OIG), the Health Care Fraud Prevention & Enforcement Action Team (HEAT) was created in 2009 to prevent fraud, waste and abuse in the Medicare and Medicaid programs, and to crack down on the fraud perpetrators.  The following are two recent cases resulting from the efforts of HEAT:

1.  The Houston Case:  On February 14, 2012, the Justice Department, the FBI and the HHS announced that two Houston-area nurses and two of their co-conspirators were sentenced to more than five years in jail for their participation in a $5.2 million Medicare fraud scheme.  According to the evidence presented at trial and in court documents, a Houston home health care company purported to provide skilled nursing to Medicare beneficiaries.  The company paid the conspirators to recruit Medicare beneficiaries for the purpose of filing claims with Medicare for skilled nursing that was medically unnecessary and/or not provided.  In addition to jail time, the four defendants were ordered to pay restitution jointly and severally with co-conspirators and defendants in a related case.  CLICK HERE for a copy of the press DOJ press release.

2. The California Case:  On February 10, 2012, agents from the FBI and Office of Inspector General (OIG) of the Department of Health and Human Services in the Northern California district announced the arrest of five defendants, including a medical doctor, for their participation in a fraud scheme involving more than $2.4 million in fraudulent Medicare billings.  The indictment alleges that from approximately Dec. 9, 2006, through July 26, 2011, two of the defendants, behalf of their companies, submitted more than $2.4 million in fraudulent claims for power wheelchairs to Medicare based on fraudulent prescriptions provided by the medical doctor.  The two defendants were paid more than $1.2 million by Medicare.  The indictment further alleged that two other defendants served as “recruiters,” identifying patients to receive the power wheelchairs and passing their names along to the doctor involved in the fraud scheme.  CLICK HERE for a copy of the press release.

You Can Stop Fraud

Remember, Medicare fraud affects every American. Waste, fraud and abuse take critical resources out of our health care system, and contribute to the rising cost of health care for all Americans.

You can help eliminate fraud and cut costs for us all (families, businesses and the federal government) by being vigilant.  Avoid becoming a victim.

If you suspect fraud, CLICK HERE to report it.

To learn more about health care fraud and government enforcement activity, read this article on this Blog.

©Rachel Agheyisi, Report Content Writer, and Regulatory Compliance Digest Blog, 2012

FDA Warning Letter to a Dietary Supplement Manufacturer

As part of its inspections, compliance, enforcement and criminal investigations activities, the U.S. Food and Drug Administration (FDA) issues warning letters to violators.  As described in a previous article on this blog, FDA warning letters fall into three broad categories depending on the nature of the violation and the corrective action required.

 

For example, when the FDA finds that a manufacturer has significantly violated FDA regulations, the agency notifies the manufacturer in the form of a general warning letter.  A general warning letter identifies the violation, such as poor manufacturing practices, problems with product claims, or incorrect directions for use of a product and the specific corrective actions necessary within a timeframe.  The FDA may issue a close-out letter once the agency has completed an evaluation of the corrective actions undertaken by a firm in response to a warning letter. 

 

The initial warning letters and subsequent follow-up activity are posted on the FDA website.  This means that, with the exception of qualified proprietary information, notices of violations are publicly available.

 

This article describes one such recent warning letter issued to a dietary supplement manufacturer by the FDA’s Los Angeles District Office.  According to the FDA, an inspection of the company’s facility revealed that it failed to comply with the Current Good Manufacturing Practice (CGMP) regulations for dietary supplements (21 CFR Part 111).

 

Specifically, the agency identified a long list of violations, including:

 

1. Failure of the manufacturer to follow a written master manufacturing record (MMR) for each unique formulation of dietary supplement that you manufacture to ensure uniformity in the finished batch from batch to batch, as required by 21 CFR 111.205(a).;
2. Failure to conduct at least one appropriate test or examination to verify the identities of any component that is a dietary ingredient, prior to its use, as required by 21 CFR 111.75(a)(1);
3. Failure to establish the specifications required by 21 CFR 111.70 for component specifications and product specifications for the identity, purity, strength, and composition of the finished batch of dietary supplement;
4. Failure to hold components and dietary supplements under conditions that do not lead to the mix-up, contamination, or deterioration of components and dietary supplements, as required by 2 I CFR 111.455(c);
5. Failure to clearly identify under a quarantine system for appropriate disposition any dietary supplement that is rejected and unsuitable for use in manufacturing, packaging, or labeling operations, as required by 21 CFR 111.370.

 

The dietary supplement manufacturer had 15 days to notify the FDA in writing of the specific steps it has taken to correct the violations and to ensure that similar violations do not occur in the future.  According to the warning letter, failure of the manufacturer to correct the violations may result in regulatory action, such as seizure and/or injunction, without further notice.

 

CLICK HERE for a copy of the FDA warning letter.

 

 

©Rachel Agheyisi, Report Content Writer, and Regulatory Compliance Digest Blog, 2012

 

U.S. Health Care Fraud Prevention and Enforcement Efforts

Directly or indirectly, we all have heard of fraud in the system that is designed to cater to the health of Americans.  Few of us are aware of the magnitudes of the fraud and the greed of the perpetrators.  It turns out that the schemes often involve millions of dollars of fraudulent charges to health care system.  It is even more amazing that the law designed to prevent such abuse has been in place for many years.

However, judging by recent developments, it looks like implementation is finally kicking in — big time!  This article recaps the law, the action force,  recent enforcement efforts, and a glimpse of the future of enforcement.

The Law

Efforts to combat fraud committed against private and public health plans in the U.S. date back to the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  The legislation required the establishment of a national Health Care Fraud and Abuse Control Program (HCFAC), under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services (HHS) acting through the Department’s Inspector General (HHS/OIG).  The HCFAC program is designed to coordinate Federal, State and local law enforcement activities with respect to health care fraud and abuse.

The Action Team

As part of the implementation of HCFAC, the Health Care Fraud Prevention & Enforcement Action Team (HEAT) was created in 2009 to prevent fraud, waste and abuse in the Medicare and Medicaid programs, and to crack down on the fraud perpetrators.  Since 2009, the Departments of Justice and HHS have enhanced their coordination through HEAT and have increased the number of Medicare Fraud Strike Force teams to nine cities all of which have teams of investigators and prosecutors from the Justice Department, the FBI, and the HHS Office of Inspector General.

The Latest Enforcement Results

On February 14, 2012, Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius released a new report showing that the government’s health care fraud prevention and enforcement efforts recovered and returned nearly $4.1 billion to the Medicare Trust Funds, the Treasury and others in Fiscal Year 2011.  This is the highest annual amount ever recovered from individuals and companies who attempted to defraud seniors and taxpayers or who sought payments to which they were not entitled.

The Future of Enforcement

The future looks optimistic for better enforcement, which hopefully, will keep the enforcers ahead of the criminals.

In July 2010, President Obama signed the Improper Payments Elimination and Recovery Act, a bill – passed unanimously by both the House and Senate – designed to cut waste, fraud and abuse due to improper payments by federal government agencies.  This law will help the federal government weed out improper payments to individuals and contractors.

The February 2012 fraud prevention and enforcement report coincided with the announcement of a proposed rule from the Centers for Medicare and Medicaid Services (CMMS) aimed at recollecting overpayments in the Medicare program.  Before the passing of the Affordable Care Act in March 2010, providers and suppliers did not face a deadline for returning taxpayers’ money.  However, because of the Affordable Care Act, the CMMS has proposed a rule that would require providers and suppliers receiving funds under the Medicare program to report and return overpayments by the later of the date, which is 60 days after the date on which the overpayment was identified.

The Affordable Care Act increases the federal sentencing guidelines for health care fraud offenses by 20-50 percent for crimes that involve more than $1 million in losses. The law establishes penalties for obstructing a fraud investigation or audit and makes it easier for the government to recapture any funds acquired through fraudulent practices. The law also makes it easier for the Justice Department to investigate potential fraud or wrongdoing at facilities like nursing homes.

 CLICK HERE for a copy of the Fraud Prevention and Enforcement Report.

©Rachel Agheyisi, Report Content Writer, and Regulatory Compliance Digest Blog, 2012

FDA Warning Letter to a Pharmaceutical Manufacturer

As part of its inspections, compliance, enforcement and criminal investigations activities, the U.S. Food and Drug Administration (FDA) issues warning letters to violators.  As described in a previous article on this blog, FDA warning letters fall into three broad categories depending on the nature of the violation and the corrective action required.

 

For example, when the FDA finds that a manufacturer has significantly violated FDA regulations, the agency notifies the manufacturer in the form of a general warning letter.  A general warning letter identifies the violation, such as poor manufacturing practices, problems with product claims, or incorrect directions for use of a product and the specific corrective actions necessary within a timeframe.  The FDA may issue a close-out letter once the agency has completed an evaluation of the corrective actions undertaken by a firm in response to a warning letter. 

 

The initial warning letters and subsequent follow-up activity are posted on the FDA website.  This means that, with the exception of qualified proprietary information, notices of violations are publicly available.

 

This article describes one such recent warning letter issued to a U.S.-based pharmaceutical manufacturer by the FDA’s New Jersey District Office.  According to the FDA, an inspection of the company’s facility identified significant violations of the Current Good Manufacturing Practice (CGMP) regulations for Finished Pharmaceuticals (Title 21, Code of Federal Regulations (CFR), Parts 210 and 211), which cause company’s drug products to be adulterated.

 

Specifically, the warning letter identified the following violations:

 

1. Failure of the manufacturer to establish control procedures that monitor the output and validate the performance of the manufacturing processes that may cause variability in the characteristics of in-process material and the drug product. [21 CFR 211.110(a)];
2. Failure to investigate thoroughly the failure of a batch or any of its components to meet its specifications whether or not the batch has been already distributed [21 CFR. 211.192];
3. Master production and control records lack a statement of theoretical yield including the maximum and minimum percentages of theoretical yield beyond which investigation is required. [21 CFR 211.186(b)(7)];
4. Equipment used in the manufacture, processing, packing or holding of drug products is not of appropriate design to facilitate operations for its intended use. [21 CFR 211.63)

 

The drug manufacturer had 15 working days to notify the FDA in writing of the specific steps it had taken to correct violations, including explanation of each step taken to prevent the recurrence of violations and copies of supporting documentation. 

 

 CLICK HERE for a copy of the FDA warning letter.

 

 

 ©Rachel Agheyisi, Report Content Writer, and Regulatory Compliance Digest Blog, 2012