Introduction

On Sept 15th, 2015 the DOJ using “the Yates memo” announced a policy which revised their principles of corporate prosecution. They announced that corporations wont be able to settle fraud cases unless they divulge the names of the people involved. These people may face civil of criminal enforcement actions.  The policy was put into practice on November 16th when it was included in the US Attorneys Manual.

Background

The Yates memo took a stridently different view on compliance problems by asserting that companies may not hide behind the shroud of saying, “mistakes happen”.  Companies are now expected to enquire into :

(i)               Who made the decision?

(ii)              Who wasn’t committed to compliance?

(iii)            Who knew about it and looked the other way?

(iv)            Who shut something down?

(v)              Who could have known but chose not to get involved

The Yates Memo which was further explained by the US Attorneys Manual explains that

(1)   To be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct

(2)   Both criminal and civil investigations should focus on individuals from the inception of the investigation

(3)   Criminal and civil attorneys handling corporate investigations should be in routine communication with one another

(4)   Absent extraordinary circumstances no corporate resolution will provide protection from criminal or civil liability for any individuals

(5)   Corporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires and declinations as to individuals in such cases must be memorialized

(6)   Civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on consideration beyond that individual’s ability to pay.

Advantages

The memo asserted that this change would reinvigorate compliance programs and allow compliance officers to show executives and board members how their programs prevent and detect fraud, waste and abuse. This would allegedly get senior leadership / boards more engaged.

Disadvantages

Such a change has obvious ramifications on companies as they try to maintain a compliance program. Most specifically –

  1. Employees, who see themselves as a target, will refuse to answer questions which will prevent an organization from earning credit for cooperating in a DOJ civil or criminal investigation. In fact, the people being investigated may themselves become whistleblowers and reach out to the DOJ.
  2. Compliance officers would be seen as as the “Sheriff” and not the “Mayor”. They would hence have lesser access and a more diminished role in the oversight process.
  3. There is an expectation by the government to respond quickly to their requests. However, the siloed nature of healthcare organizations tend to cause undue delay – which may not be appropriately appreciated by the company.

How does this affect Brand?

The brand is entrusted with typically speaking only on label. However, the wrinkle added by Coronia, and Amarin is mobilizing companies to explore off-label promotion. It is critical that such conversations happen in the context of appropriate guidance. Failure to be appropriately guided may result not only in fines and penalties for the company, but, after the Yates memo – may result in more personal accountability and possible prosecution.