Speech by High-Level DOJ Official Claims Shared Interests of Prosecutors and Regulated Industry

January 30, 2014

By JP Ellison

In a speech on January 29th at the CBI Pharmaceutical Compliance Congress that DOJ posted on its own website, U.S. Department of Justice Assistant Attorney General Stuart Delery set forth his views of the three ways that the government’s enforcement interests align with industry’s interests.  While the speech didn’t break any new ground, it serves as a reminder that pharmaceutical enforcement cases remain a DOJ priority and suggests that recent enforcement trends will continue.

AAG Delery Claimed that DOJ and industry shared the following:

  1.  “[A] common interest in promoting ethical corporate culture instead of maintaining a compliance program in name only;”
  2. “Transparency about the conduct [the government] investigate[s];” and
  3. “[A] common interest in ensuring that corporate compliance is not only the right thing to do but also a winning business strategy.”

Promoting ethical corporate culture

AAG Delery stated that a “common thread” in recent cases was “that numerous individuals . . . saw signs that misconduct was taking place and did not act.”  In response to this observation, AAG Delery stated that DOJ has “put a renewed emphasis on identifying non-monetary measures that will help us to prevent the recurrent of misconduct.”  As examples of such measures, Delery pointed to the Ranbaxy civil consent decree, which required the company to create an Office of Data Reliability, and the Abbott Laboratories resolution (see our prior post here) which he described as “a resolution designed to ensure high-level accountability for the company’s compliance efforts.   Delery’s comments regarding DOJ’s goal of giving “companies the incentives—and tools—to craft better compliance practices in the future” suggests that companies may want to consider similar measures in their own compliance programs.


As to the second shared goal, Delery cited to the common interest of the government and industry in being “clear about what misconduct gave rise to a civil or criminal resolution” so that both sides can “distinguish[] conduct that is lawful and even beneficial from conduct that is illegal and harmful.” Delery “emphasize[d] the importance of [the government] explaining the conduct that has given rise to the settlements we negotiate.”  He explained that   “transparency benefits the industry by clarifying the factual basis for the actions we take . . .  and by prompting other companies to avoid the same risks to patient health and safety.”

Making compliance make business sense

AAG Delery “recognize[d] that most pharmaceutical companies are trying to play by the rules.”  Delery explained that DOJ wants “to ensure that companies that are committed to doing things right have the opportunity to compete on a level playing field.”  Delery encouraged self-disclosure and stated that companies would receive credit for such actions.  Lastly he stressed that DOJ would “continue to insist on resolutions that eliminate any economic incentive to engage in and attempt to conceal unlawful conduct.”

The government’s pursuit of pharmaceutical manufacturers has yielded significant recoveries in recent years (see here).  Throughout 2014, we expect the principles set forth in AAG Delery’s speech to be reinforced through investigations, prosecutions, and resolutions that reflect the points made in this speech, and we will keep the readers of this blog updated on those developments as they occur.

Categories: Enforcement