Acclarent Trial Media Monitoring 6/20/16

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1. Former Warner Chilcott Executive Acquitted of Kickbacks Charge

   Jun 17, 2016 | The Wall Street Journal

   By Peter Loftus
   
   
   A jury in federal court in Boston on Friday acquitted a former executive with Allergan PLC’s Warner Chilcott unit of conspiring to pay kickbacks to doctors to prod them to prescribe the company’s drugs, the U.S. attorney’s office in Boston said. *The Acclarent trial is mentioned in this article, the relevant sections have been highlighted below.

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Client Attorney Privileged/Attorney Work Product/At Request of Counsel

Online Sources

1. Former Warner Chilcott Executive Acquitted of Kickbacks Charge

   Jun 17, 2016 | The Wall Street Journal

   By Peter Loftus

   A jury in federal court in Boston on Friday acquitted a former executive with Allergan PLC’s Warner Chilcott unit of conspiring to pay kickbacks to doctors to prod them to prescribe the company’s drugs, the U.S. attorney’s office in Boston said.

   The jury deliberated Thursday and Friday before delivering a verdict of not guilty in the criminal case of W. Carl Reichel, former president of Warner Chilcott’s pharmaceutical unit. His trial began in late May.

   The acquittal of Mr. Reichel shows the challenges the federal government faces in what it says is a new push to hold more individuals accountable for alleged corporate wrongdoing. Such cases have proved difficult in the past because it is tough for prosecutors to prove an individual had criminal intent in a corporate setting where decision-making is spread among many.

   Federal prosecutors had accused Mr. Reichel of instructing his company’s U.S. sales force to induce doctors to prescribe Warner Chilcott drugs, including the osteoporosis treatment Atelvia, by taking them to expensive dinners and paying them fees, ostensibly to give medical-education speeches to other doctors. Prosecutors said these speeches were more like social events, with very little talk of medicine.

   In addition, prosecutors said Mr. Reichel, of Chester, N.J., instructed the Warner Chilcott sales force to bring food and drink to reward staffers at physicians’ offices for submitting requests to insurance companies to pay for prescriptions of Warner Chilcott drugs. The alleged wrongdoing occurred between 2009 and 2011, before Allergan acquired Warner Chilcott in 2013.

   Federal law bars payments that are intended to cause orders for products that are paid for by a federal health program, which prosecutors said applies to Warner Chilcott’s drugs.

   Mr. Reichel had pleaded not guilty. In court documents, his attorneys said there was no evidence that he intended to violate the anti-kickback law or that he had any knowledge of doing anything illegal.

   Responding to a request for comment, an attorney for Mr. Reichel said in an email: “Justice done.”

   The U.S. attorney’s office in Boston said it respects the jury’s verdict but believes that the charge against Mr. Reichel “was supported by the facts and the law.”

   Warner Chilcott in October agreed to plead guilty to a criminal charge of health-care fraud, arising from similar allegations, and to pay $125 million to resolve a Justice Department investigation of its payments to physicians and other practices.

   Large health-care companies have paid the U.S. government billions of dollars, and in some cases pleaded guilty to criminal charges, to resolve civil and criminal probes of their marketing and pricing in recent years. But few executives have been on the hook as individuals. Antifraud activists have pushed for more criminal prosecutions or civil lawsuits against executives, saying corporate fines haven’t sufficiently curbed misconduct.

   The Justice Department signaled its increased scrutiny of individuals in a September 2015 memo from Deputy Attorney General Sally Quillian Yates that made a splash in the white-collar defense community. It laid out the various steps Justice Department attorneys should take in their investigations to focus more on individuals, in an effort to deter future illegal activity and ensure “that the proper parties are held responsible for their actions,” she wrote.

   Another criminal trial recently began in federal court in Boston of the former CEO of Johnson & Johnson’s Acclarent unit, William Facteau, and the former vice president of sales, Patrick Fabian. In April 2015, a federal grand jury indicted them on charges including conspiring to market a medical device for a use not approved by the FDA, and conspiring to commit securities fraud by not disclosing the conduct to Johnson & Johnson when it acquired Acclarent in 2010 for $785 million.

   Messrs. Facteau and Fabian pleaded not guilty. Their attorneys declined to comment.

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