McDermott Named “Healthcare Team of the Year” by Chambers USA

International law firm McDermott Will & Emery was named 2019 “Healthcare Team of the Year” by Chambers USA at its awards ceremony celebrating legal excellence. This is the fourth time McDermott has received the honor – more than any other law firm in the awards’ history.

The “Healthcare Team of the Year” award comes on the heels of McDermott’s industry-leading health practice garnering a national Band 1 ranking in the Healthcare category of the 2019 edition of Chambers USA for the 10th consecutive year – also the only firm to hold that distinction.

“Our team is dedicated to helping health care companies push the boundaries of what it means to be innovative,” said McDermott Will & Emery Partner and International Head of McDermott’s Health Industry Advisory Group, Eric Zimmerman. “Receiving Chambers’ “Healthcare Team of the Year” award is a powerful testament to that work and to our passion for contributing to the health care and the legal industries at the highest levels. Thank you to our clients and to Chambers for recognizing McDermott again this year.”

McDermott Will & Emery is the nation’s leading healthcare law firm. The Health Industry Advisory group is the only health practice to receive top national rankings from U.S. News – Best Lawyers “Best Law Firms,” Chambers USA, The Legal 500 US and Law360. The practice was also recognized by Chambers as “Health Team of the Year” in 2010, 2013 and 2017. McDermott has held the top spot in PitchBook’s League Tables as the most active firm for healthcare private equity since 2017.

About Chambers USA

Chambers USA covers all the states in the U.S. Law firms that have a national presence are also ranked in Nationwide tables (which focus on those firms that are the country’s best in their respective areas of practice). Chambers USA rankings and editorial commentary are based on independent research, and interviews with clients and other purchasers of legal services. Chambers & Partners is one of the premier directories for legal services and in a recent survey of 20,000 in-house counsel over half reported that their directory of choice when reviewing law firms and individual lawyers is Chambers & Partners.




DOJ Preserves Its Options in Cooperation Credit Guidance

Last month, the Civil Division of the Department of Justice (DOJ) announced the release of formal guidance to DOJ civil attorneys on how to award “cooperation credit” to defendants who cooperate with the Department during a False Claims Act (FCA) investigation. The formal policy, added to the Justice Manual Section 4-4.112, identifies the type of cooperation eligible for credit.

As announced by Assistance Attorney General Jody Hunt, DOJ believes the guidance reflects “important steps to incentivize companies to voluntarily disclose misconduct and cooperate with our investigations … False Claims Act defendants may merit a more favorable resolution by providing meaningful assistance to the Department of Justice—from voluntary disclosure, which is the most valuable form of cooperation, to various other efforts, including the sharing of information gleaned from an internal investigation and taking remedial steps through new or improved compliance programs.”

Under the policy, cooperation credit in FCA cases may be earned by 1) voluntarily disclosing misconduct unknown to the government, 2) cooperating in an ongoing investigation or 3) undertaking remedial measures in response to a violation. The first type of cooperation is straightforward: self-disclosure before a government investigation begins.

The second type of cooperation has two flavors. First, where the government has already initiated an investigation, a company may receive credit for disclosing other misconduct uncovered by the company through the course of its internal investigation that is unknown to the government. Second, DOJ lists 10 examples of other cooperative activities for which a company may earn credit for undertaking during an investigation, including

  • Identifying individuals substantially involved or responsible for the conduct;
  • Admitting liability or “accepting responsibility” for the conduct; or
  • Assisting the government in its investigation by, for example, preserving relevant documents and information beyond existing business practices or legal requirements, identifying individuals who are aware of relevant information or conduct, and facilitating review and evaluation of data or information that requires access to special or proprietary technologies.

The third type of cooperation involves taking into account remedial actions that a company has taken in response to a FCA violation. Such remedial measures may include

  • Undertaking a thorough analysis of the root cause of the misconduct;
  • Implementing or improving an effective compliance program designed to ensure the misconduct or similar problem does not occur again;
  • Appropriately disciplining or replacing those responsible for the misconduct;
  • Accepting responsibility for the violation; and
  • Implementing or improving compliance programs to prevent a recurrence.

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Unanimous Supreme Court Ruling Expands Statute of Limitations for Filing Qui Tam Cases

On May 13, the US Supreme Court (the Court) unanimously ruled in Cochise Consultancy, Inc., v. U.S. ex rel. Hunt that the “government knowledge” statute of limitations under the federal False Claims Act (FCA), §31 U.S.C. 3729, et seq., applies regardless of whether the government intervenes in a case. As a result, in some circumstances, relators will have up to four years longer to file qui tam claims.

Background

The FCA permits a relator bring a qui tam civil action on behalf of the federal government against “any person” who “knowingly presents . . . a false or fraudulent claim for payment” to the government or to certain third parties acting on the government’s behalf. 31 U. S. C. §3730(b). The relator must deliver a copy of the complaint and supporting evidence to the government, which then has 60 days to decide whether to intervene in the action. During this time, the complaint remains under seal. If the government intervenes, it assumes primary responsibility for prosecuting the case, although the relator may continue to participate. If the government does not intervene, the relator has the right to pursue the case alone. The relator receives a share of any proceeds from the action, generally 15-25 percent if the government intervenes and 25-30 percent if it does not intervene.

The general statute of limitations for all civil actions under Section 3730 of the FCA requires that cases be filed within six years of the alleged violation or three years after relevant material facts are known or should have been known by the “official of the United States charged with responsibility to act in the circumstances,” whichever is later, but not more than 10 years after the violation. 31 U.S.C. §3731.

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DOJ Guidance on Evaluation of Corporate Compliance Programs: Key Takeaways

Boards and management should make use of recent expanded guidance from the US Department of Justice to ensure that their compliance programs are considered “effective” if and when an investigation arises. Companies should affirmatively answer three fundamental questions in evaluating a compliance program:

  1. Is the compliance program well designed?
  2. Is the program being implemented effectively and in good faith?
  3. Does the compliance program work in practice?

Click here to access the full article. 




First of Its Kind: Drug Wholesaler Accepts DPA and Two Executives Face Criminal Charges in SDNY For Illegal Distribution of Opioids

On April 23, 2019, the US Department of Justice (DOJ) announced it has entered into a deferred prosecution agreement with Rochester Drug Co-Operative, Inc. (RDC), one of the 10 largest wholesale distributors of pharmaceutical products in the US, and filed felony criminal charges against two of RDC’s former senior executives for unlawful distribution of controlled substances (oxycodone and fentanyl) and conspiring to defraud the US Drug Enforcement Agency (DEA). During the relevant time period (2012-2016), RDC’s sales of oxycodone increased by approximately 800 percent (from 4.7 million to 42.2 million tablets) and fentanyl increased by approximately 2,000 percent (from 63,000 to over 1.3 million dosages). The two charged executives are RDC’s former chief executive officer, Laurence F. Doud III, and the company’s former chief compliance officer, William Pietruszewski.

Geoffrey S. Berman, the US Attorney for the Southern District of New York, noted in a press release that the prosecution is “the first of its kind,” with RDC and its former chief executive officer and former chief compliance officer charged with “drug trafficking, trafficking the same drugs that are fueling the opioid epidemic that is ravaging this country.” Keeping the focus on the C-suite, Mr. Berman emphasized that his office “will do everything in its power to combat this epidemic, from street-level dealers to the executives who illegally distribute drugs from their boardrooms.”

Ray Donovan, the DEA Special Agent in Charge of the investigation, underscored this sentiment:

Today’s charges should send shock waves throughout the pharmaceutical industry reminding them of their role as gatekeepers of prescription medication.  The distribution of life-saving medication is paramount to public health; similarly, so is identifying rogue members of the pharmaceutical and medical fields whose diversion contributes to the record-breaking drug overdoses in America . . . . This historic investigation unveiled a criminal element of denial in RDC’s compliance practices, and holds them accountable for their egregious non-compliance according to the law.”

A consistent theme across the three cases is the alleged deficiency in RDC’s compliance program—as well as the role that the former CEO and compliance chief allegedly played in directing RDC to ignore its obligations to maintain “effective control[s] against diversion of particular controlled substances into other than legitimate medical, scientific, and industrial channels” under 21 USC § 823(b)(1) and reporting suspicious orders under 21 CFR § 1301.74(b). The criminal pleadings include allegations that:

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