A former executive with Warner Chilcott, a division of Allergan, was arrested for allegedly directing employees to engage in illegal sales. Forbes Magazine contributor Erika Kelton writes about how big of a deal that is, since executives are rarely held accountable for bad deeds by a company.
Here’s an excerpt from her article:
The arrest of former Warner Chilcott executive W. Carl Reichel for allegedly directing employees to engage in illegal sales tactics is big news – even bigger than the $125 million the pharma company paid the government to settle Medicare fraud charges recently.
Rarely has the Justice Department brought criminal charges against a top pharma or healthcare executive – no matter how egregious the Medicare or Medicaid fraud. And those cases haven’t always been successful.
One of the first times that a CEO for national healthcare company was prosecuted in connection with Medicare fraud was in 1992 when Robert E. Draper, president and chief executive of National Health Laboratories of La Jolla, Calif., pleaded guilty to two counts of submitting false claims and was sent to prison. His company paid $111 million for inducing doctors to order unnecessary blood tests, a scheme exposed by a whistleblower represented by my law firm.
Over the past two decades, however, prosecutions of CEOs of major corporations have been few and far between. More often, DOJ has charged mid- and lower-level healthcare company employees – district sales managers, sales reps, etc. – with crimes in connection with whistleblower cases, as they did in the case of Warner Chilcott, which was acquired by Allergan (formerly known as Actavis), in 2013.