US Justice Department targets pharmaceutical companies in white-collar fraud crackdown

The DOJ's new fraud directive explicitly includes the Federal Food, Drug, and Cosmetic Act, placing drug and device makers more firmly in its sights.

DOJ expands fraud focus to include pharmaceutical industry

The U.S. Department of Justice last week issued a new directive targeting white-collar fraud that explicitly names the pharmaceutical sector as a priority, statnews.com reports.

The directive, issued by the National Fraud Enforcement Division, expressly references the Federal Food, Drug, and Cosmetic Act — the federal law that tightly regulates the pharmaceutical industry. That inclusion signals a notable shift in the agency's enforcement focus.

Historically, the DOJ's health fraud cases have centred on providers, clinics, home health agencies, and hospices. By adding drug and device makers to the directive, the National Fraud Enforcement Division appears to be broadening its reach into life sciences companies more deliberately than before.

Kevin Lowell, a member of the Miller & Chevalier law firm and a former deputy chief in the National Fraud Enforcement Division's health care fraud section, described the move as consequential. "This is a subtle but significant expansion of their jurisdiction," Lowell said. He spent a decade at the DOJ before moving to private practice.

The new directive amounts to a formal warning to the life sciences industry that federal prosecutors are prepared to pursue violations under laws that have not traditionally formed the centrepiece of health fraud enforcement actions.

Source: Google News MT — Crime (en)