Trials of former healthcare executives set the stage for new federal tactics

The trials of former healthcare executives from Allergan and Johnson & Johnson are taking place in Boston to show the federal governments new push to hold more individuals accountable for alleged corporate crimes, reports the Wall Street Journal.

The executives on trial include W. Carl Reichel, a former division president at Allergan PLC’s Warner Chilcott unit, and two former senior officers of Acclarent, Johnson & Johnson medical-device unit, who are charged with marketing a sinus-opening device for a use not authorized by the FDA. All three plead not guilty.

The first trial, set for Monday, focuses on Warner Chilcott's Reichel on the charge of conspiring to pay kickbacks to healthcare providers between 2009 and 2011. He instructed the company’s sales team to persuade doctors to prescribe Warner Chilcott drugs by taking them to expensive dinners and paying them fees, supposedly to give medical-education speeches to other doctors. After physicians had submitted their requests for these prescriptions, Reichel had the sales team bring food and drinks to reward the physicians.

Reichel pleaded not guilty, stating that there is no evidence that he intended to violate the anti-kickback law or that he had any knowledge of doing anything illegal. Warner Chilcott agreed to plead guilty to a criminal charge of healthcare fraud and pay $125 million to the Justice Department for the cost of investigation of its payments to physicians and other practices.

The second trial, set to begin June 7, features former Acclarent CEO William Facteau and former vice president of sales, Patrick Fabian. The federal grand jury indicted them on charges that included conspiring to market a medical device for a use not approved by the FDA, and conspiring to commit securities fraud by not disclosing the alleged conduct to Johnson & Johnson when it acquired Acclarent in 2010 for $785 million.