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Update on Implications of Recent U.S. Governmental Enforcement Activities on Pharmaceutical and Medical Device Products Liability Actions

On February 26, 2014, the Attorney General Eric Holder and the Department of Health and Human Services (“HHS”) Secretary Kathleen Sebelius released a report showing that the U.S. government’s health care fraud prevention and enforcement efforts recovered nearly $4.3 billion in taxpayer dollars in fiscal year 2013, the largest sum ever recovered in a single year. Over the past five years, the U.S. government has recovered $19.2 billion, up from $9.4 billion in the past five-year period, and therefore the U.S. Food and Drug Administration (“FDA”), the U.S. Department of Justice (“DOJ”), other federal agencies, and individual state governments will certainly continue to focus their attention in coming years on the pharmaceutical and  medical device industry.

It also is likely that the federal government will continue to target individual executives for criminal liability in an attempt to change the behaviour of companies. Governmental investigations of executives of pharmaceutical and medical device companies exert a unique pressure on current and future civil products liability actions. It is thus important for medical device and pharmaceutical companies and their defence counsel to understand the current landscape of government investigations and to understand the impact of government enforcement actions on a company’s civil products liability litigation.

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