New DOJ Focus On Individual Accountability For Corporate Wrongdoing Demonstrated In Indictment Of Ex-Warner Chilcott President

Posted On Thursday, October 29, 2015

The Department of Justice’s (“DOJ”) announcement last month that it was shifting its focus to individual accountability for corporate wrongdoing was underlined today when an indictment against the former president of Pharmaceutical manufacturer Warner Chilcott was unsealed in the District of Massachusetts.  The DOJ also announced that Warner Chilcott U.S. Sales LLC, a subsidiary of pharmaceutical manufacturer Warner Chilcott PLC, had agreed to plead guilty to a felony charge of health care fraud and pay $125 million to resolve its criminal and civil liability related to the company’s marketing of several drugs.   In addition to the former president, DOJ announced that several additional individuals had also been charged or had entered pleas of guilty.

The unsealed indictment alleges that Carl Reichel, former of Warner Chilcott president, oversaw the offering of an array of incentives to prescribers, including free dinners, “speaker” payments, and free food and drink, all with the aim of inducing them to write prescriptions for the company’s drugs. During these dinners and related functions, the sales people were allegedly coached into eliciting commitments from the prescribers to prescribe Warner Chilcott drugs.  These commitments would then be leveraged by aggressive sales tactics wherein the prescribers would be told they had to honor the promises they had made or be faced with losing access to the inducements.

The conduct alleged in the indictment was part of a larger pattern of misconduct alleged by the DOJ that ranged from 2009 to 2013, including: sham medical events that were solely created to distribute expensive gifts to physicians; the knowing submission of false prior authorization requests to federal health care programs; and baseless claims for the superiority of the company’s drugs.