How Life Sciences Companies Can Respond To DOJ’s Focus on Clinical Trial Fraud

For the past two years, clinical trial fraud has been a key enforcement area for the U.S. Department of Justice’s (DOJ) Consumer Protection Branch (CPB). David Ludlow and Julea Lipiz set out considerations for life sciences companies to help mitigate scrutiny of their trial results and related products. 

Clinical trial fraud is an area of particular focus for the DOJ and other U.S. agencies, and is drawing heightened scrutiny from investigative journalists. In December 2021, the then Deputy Assistant Attorney General for the DOJ’s CPB, Arun Rao, highlighted that clinical trial fraud was an area of continuing emphasis for CPB, and noted CPB’s “aggressive” enforcement in this space. Rao underscored the significant risks of clinical trial fraud, including potentially dangerous consequences related to a particular study drug, as well as “undermin[ing] confidence in the healthcare industry as a whole.” CPB has subsequently initiated numerous investigations into potential clinical trial fraud and brought charges against individuals for clinical research fraud.

In recent months, we have seen some high-profile cases involving allegations of fraud. Examples include the U.S. Securities and Exchange Commission’s (SEC) enforcement action against Cassava Sciences over allegedly misleading statements made to the FDA about clinical trial results (discussed in a recent blog post) and, relatedly, a DOJ indictment and SEC enforcement action against Hoau-Yan Wang, a tenured medical professor and paid consultant for Cassava who “allegedly engaged in a scheme to fabricate and falsify scientific data in grant applications made to the NIH on behalf of himself and the biopharmaceutical company.”

We have also seen an associated surge of investigative reporting into allegations of data fabrication in trials. Many of these reports have focused on alleged fraud in university-based research into drug development. They have come about as a result of academics and journalists conducting investigations into research findings, resulting in high-profile coverage such as an article in The Economist which claimed that there is a worrying amount of fraud in medical research. The growing scrutiny by the government, academics, and journalists has led to indictments, SEC complaints, and compliance investigations, and has entangled universities, research labs, and life sciences companies in controversy.

For many life sciences and pre-clinical companies, the impact of the investigative reporting currently may be indirect and uncertain. However, because life sciences companies frequently collaborate with university researchers and contract research organizations, increased public and governmental scrutiny of clinical research will impact internal compliance and monitoring efforts. Additionally, companies should be aware that plaintiffs’ and relators’ law firms are likely collaborating with researchers that are using AI tools to identify suspect research.

Life sciences companies involved in or relying on clinical trial research should therefore take steps to help ensure clinical trial integrity. The below steps can help life sciences companies to be vigilant around potential data issues.

1. AI tools are now being used (and will be increasingly used) to analyze data and flag abnormal findings. Life sciences companies involved in clinical research should consider how to leverage such tools as part of their quality and compliance programs.
2. Companies should exercise appropriate oversight of external parties that perform research activities for them. In addition to having robust sponsorship, research, and services agreements, companies should ensure their audit program is mature and effective.
3. Companies should evaluate their internal vetting processes for the publication of academic journal articles that are co-authored with external parties.
4. Companies should consider proactive efforts to investigate current or historical associations with institutions, research, and researchers that are being targeted by regulators, journalists, and enforcement authorities. Doing so will prepare the company to deal with public or governmental inquiries and appropriately manage ongoing clinical research activities.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.