Delery: Fighting fraud requires more than monetary settlements

In his first major public speech as head of the U.S. Justice Department’s civil division, Stuart Delery told an audience of corporate attorneys in San Francisco that fighting healthcare fraud must include substantive penalties and remedies beyond attentiongrabbing monetary settlements. Delery’s comments came a week after the division announced one of its largest-ever settlements in healthcare: a $1.5 billion deal to resolve criminal and civil allegations of off-label marketing of Depakote by Abbott Laboratories. That deal included several nonmonetary remedies that require compliance action by Abbott’s CEO and board of directors. Delery was appointed acting assistant attorney general for the Justice Department’s civil division in March, replacing Tony West, who was promoted to acting associate attorney general. Delery told a gathering of in-house lawyers who are members of the American Bar Association how the Abbott settlement mandates that the company CEO personally certify compliance with a requirement that the company report “any probable violations” of the Food, Drug and Cosmetic Act to the international drugmaker’s probation officer as a condition of its five-year probation, in addition to a five-year corporate integrity agreement that requires the company’s board of directors to review the effectiveness of its compliance program. “While we will continue to seek significant monetary penalties where appropriate, we will also seek to implement appropriate nonmonetary measures aimed at encouraging a culture of compliance from within,” Delery said.