Event Recap – What's Brewing in Compliance?

At Gardner Law’s recent “Saison-al Session: A Legal Update for FDA-Regulated Industry,” attorneys Amanda Johnston and Katy Herman led a dynamic kickoff presentation titled “What’s Brewing in Compliance? Hot Topics and Enforcement Trends.” With a packed house and strong virtual attendance, the session delivered actionable insights on DOJ enforcement activity, emerging compliance risks, and practical guidance for navigating legal gray zones affecting FDA-regulated companies. 

Enforcement Cornerstones: FCA and AKS  

The session centered on the two key statutes shaping enforcement in this space—the False Claims Act (FCA) and the Anti-Kickback Statute (AKS). Amanda and Katy provided an overview of how these laws are used together by the Department of Justice (DOJ) to target problematic sales practices, marketing schemes, and financial arrangements with healthcare providers (HCPs). As Amanda explained, the DOJ uses these statutes in tandem to scrutinize everything from speaker programs to charitable foundation donations to rep compensation models. 

The presentation included a review of fiscal year 2024 FCA enforcement activity. Notably, the DOJ secured $2.9 billion in settlements and judgments—an increase from the prior year—and filed a record 979 qui tam (whistleblower) lawsuits, the highest in FCA history. Amanda emphasized the implications:  

“False Claims Act enforcement is bipartisan, accelerating, and a major revenue stream for the government. That’s not changing anytime soon.” 

FY 2024 by the Numbers: More Qui Tams, More Risk  

Attendees were encouraged to keep a close eye on several key trends: 

• The DOJ is intensifying scrutiny on co-pay assistance programs and charitable foundations, particularly when linked to prescription volume. 

• Speaker programs continue to be a favorite target for enforcement, especially when repeat attendance, lavish venues, or a lack of genuine educational content are involved. 

• Commission-based compensation for 1099 reps remains risky—though not categorically illegal, intent and influence are critical factors. 

• FDA issues, especially around off-label promotion, device quality, or device misuse, are increasingly resulting in FCA exposure. 

To drive these points home, Amanda and Katy spotlighted a series of high-profile enforcement actions from the past year. Among them: 

• Teva Pharmaceuticals agreed to pay $425 million to resolve claims that it used charitable foundations improperly subsidize copays to mask kickbacks for its MS drug, effectively disguising kickbacks. 

• Pfizer paid nearly $60 million to settle allegations that its acquired company, Biohaven, paid kickbacks through used speaker programs and luxury meals to improperly influence prescribing behavior. 

• Gilead Sciences faced a $202 million settlement in a qui tam case alleging it provided kickbacks in the form of honoria, meals, and travel  involving more than 17,000 speaker programs held at lavish venues, often with repeat attendees, all allegedly purportedly designed to drive prescriptions. 

The session also addressed off-label promotion and device safety risks. Diopsys, for example, recently settled with the DOJ for $14.25 million for allegedly encouraging providers to use its vision testing system for an indication not covered by its FDA clearance. In another case, Prometheus settled for $550,000 after DOJ alleged the company promoted unsafe reuse of single-use rectal catheters and sensors, creating serious patient safety concerns. 

“The takeaway is clear: when safety is on the line, enforcement follows,” Amanda said. “Your communications must remain consistent with the FDA-cleared or –approved labeling and indications and you cannot encourage providers to work around it."

Emerging Risks: Genetic Testing, Telehealth, and MA Plans  

Emerging enforcement frontiers were also explored. DOJ actions are focusing on genetic testing schemes, telehealth abuse, and Medicare Advantage manipulation. In one ongoing case, insurers and brokers are accused of steering seniors into higher-paying plans while allegedly discouraging enrollment by patients with disabilities—implicating the FCA, AKS, and civil rights law. 

Katy closed the session by reinforcing the need for robust compliance programs that go beyond boilerplate policies: 

“The government is watching patterns.  And the whistleblower bar is very active,” she said. “You want to be prepared long before a CID or a subpoena arrives at your door.” 

Final Takeaways: Readiness Is Your Best Defense 

With more scrutiny, larger settlements, and increasingly creative relators, FDA-regulated companies must stay vigilant. The speakers emphasized that robust compliance programs, real documentation, and front-end legal review aren’t just “nice to have”—they’re essential. 

Whether you’re launching a new product, structuring financial arrangements with HCPs, or developing support programs, this session underscored the importance of proactive legal and compliance review. Gardner Law helps clients design, assess, and defend compliant operations across the product lifecycle. For those seeking guidance on the issues discussed, Amanda Johnston and Katy Herman are available for consultation.