Tag Archives: Food and Drug Administration

Whistleblower Claims – Corporate Land Mines

From that delicate balance between preserving the public good and the right of private action has emerged that most persuasive, and potent, moderator – the whistleblower claim.  In our laws, the purpose of whistleblower provisions has been to enable employees, representatives and even business partners to report behavior that has harmed or could potentially cause harm to the interests of the government or the public it serves.  The underlying rationale is that reporting this behavior removes the potential harm,  punishes the offenders and makes an example of their behavior as a deterrent against future bad acts, therefore “blowing the whistle” should be encouraged and the person or persons who do it should be rewarded.  Over the years, several well-recognized statutory programs based on federal law have included whistleblower provisions. These include the Occupational Health and Safety Act, the Internal Revenue Service Code and the Fair Labor Standards Act.  State laws are also armed to respond to whistleblower complaints.

For example, a $327 million judgment against drugmaker, Johnson & Johnson, under the South Carolina Unfair Trade Practices Act was just reported to have been upheld.  A whistleblower claim triggered this case, which has so far led to lawsuits by multiple states alleging that their Medicare and Medicaid programs have been defrauded.  The South Carolina  fine was calculated by assessing $4,000 for every “Dear Doctor” letter the company sent to physicians claiming that the drug was better than the competition and $300 for every sample it gave away to healthcare professionals.

But it’s not just big pharmaceutical companies that have been caught in the dragnet of a whistleblower complaint.  In the healthcare arena, the threat is very real for distributors of durable medical equipment and for physicians, physician assistants and nurse practitioners who participate in treating patients and reporting the services provided.  Outside of healthcare, recent whistleblower claims were filed by Alcohol, Tobacco and Firearms (ATF) agents (click link for story), to report violations of the Occupational Health and Safety Act, the Internal Revenue Service Code and the Fair Labor Standards Act.

Here are some useful tips for handling whistleblower scenarios.  For employers:

  • Develop and communicate a procedure for reporting potential compliance violations that is confidential, responsive and can be accessed by employees outside the regular chain of command. Maintain confidentiality as much as possible, and inform the employee of the outcome of your investigation.
  • Carefully address any complaints raised by employees that involve potential violations of federal or state law, and document the resolution.
  • Often, companies do not know the identity of the whistleblower until the indictment as been unsealed.  Even if you receive this information, do not take any personnel action against an employee or business partner because they filed a whistleblower complaint.

For employees:

  • If possible, discuss your concerns with your managers, or if you feel uncomfortable about doing so, with your company’s compliance officer.
  • Continue to observe the rules and requirements of which you are aware while the investigation is progressing, and to do your job.
  • You may choose not to raise the issue internally and report it directly to the government, usually with the assistance of a qui tam lawyer. Supporting facts are very important to substantiate a whistleblower complaint, so be prepared to present information that would adequately support your case in court.

Federal and state whistleblower cases may request civil and/or criminal penalties and often disqualify companies or persons found guilty from participating in government fee-for-service or procurement programs.  The fines are usually high and are a significant source of revenue for cash-strapped government agencies as well.   The number of these cases, especially in the healthcare field, has been increasing and the trend is expected to continue.

Additional links: http://www.whistleblowers.gov/, http://bit.ly/sxFL6V , http://www.irs.gov/compliance/article/0,,id=180171,00.html,

Baxam Law Group, LLC advises clients on business, intellectual property and healthcare law matters. Visit us on FacebookFollow us on Twitter.

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New Guidance for Dietary Supplement Manufacturers

 The FDA today released new guidance for sellers of dietary supplements.  The guidance addresses how to determine whether an ingredient should be considered a New Dietary Ingredient (NDI), and the requirements for filing a pre-market NDI notification.  

FDA said another motivation for providing the guidance is to improve the quality and quantity of NDI notifications.  There are an estimated 55,600 dietary supplement products on the market, but FDA has only received about 700 NDI notifications since it began reviewing them 16 years ago.  Approximately 1,000 new dietary supplements are introduced to the market each year.   The low number of NDI notifications, plus FDA’s concern that some dietary supplements contain undeclared active ingredients, has prompted more attention on using these filings as a preventive monitoring tool. 

The agency is inviting response from the dietary supplements industry on today’s guidance.

Dietary supplements are regulated under the Dietary Supplement Health and Education Act of 1994 (DSHEA).  

Baxam Law Group advises clients on complying with the regulatory requirements for marketing of consumer products.

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FDA Issues New Rules for Sunscreen Labels

Today the U.S. Food and Drug Administration (FDA) issued new rules for labeling sunscreen products.  Just in time for next year’s peak summer season (the rules take effect in 2012), the new regulations and guidance may help demystify the many labels consumers must wade through while browsing the drugstore aisles for protection against sun damage.  According to Dr. Lydia Velazquez of FDA, “We want consumers to understand that not all sunscreens are created equal.”

SPF is the ability of a sunscreen to block UVB rays, which cause sunburns.  The SPF number that has been used on sunscreen packaging gives no indication of how well a product protects the skin from UVA rays which, like UVB rays, can damage the skin, cause wrinkles and other signs of skin aging, and can also contribute to the development of skin cancers (watch the FDA video here).  The SPF number also does not indicate how long a person who uses the product can be exposed to sunlight before developing sunburn.   

Typically, a product marked SPF 15 will generally block about 94 percent of UVB rays, SPF 30 will block about 97 percent, and SPF 50 will provide about 98 percent blockage.

The new rule sets testing standards for what are called broad spectrum protection products – those that sufficiently block both UVA and UVB rays.  Sunscreens that meet these standards and receive a SPF rating of 15 or higher can be labeled with a statement that use of the product may reduce the risks of skin cancer and signs of early skin aging if used as directed and in combination with other sun protection measures.

FDA believes SPF values above 50 cannot be verified with scientific accuracy, and even then they may not necessarily offer adequate protection against UVA rays.  Accordingly, the agency also issued a proposed rule today that, if finalized in its current form, would ban the use of SPF designations above 50.   

Sunscreens not labeled as “Broad Spectrum,” or which have SPF values between 2 and 14, will now have to labeled with a warning that the product has not been shown to help prevent skin cancer or early skin aging.

Some of the now familiar terms used for sun care products, such as “sunblock,” “waterproof” and “sweat proof” must also now be removed from the labeling.  However, products can be labeled as water-resistant under certain conditions.

Large companies will have one year from the effective date of the Sunscreen Rule to change the sunscreen-related labeling on their products, while small companies will have two years to implement the changes.

For more information about labeling of consumer products, contact Baxam Law Group.