In addition to the threat of jail time, prosecutors also are looking to ban companies committing fraud from doing business with Medicare and Medicaid. The HHS inspector-general issued guidelines in October 2010 that signal more aggressive pursuit of exclusion penalties against executives who should or could have known of illegal behavior. Last year, KV Pharmaceutical (Bridgeton, MO) had to sever ties with its CEO when he was hit by an exclusion order that would have halted company sales to federal agencies.

KV is one of several leading pharmaceutical companies embroiled in drug manufacturing and quality control issues that have drawn the scrutiny of FDA and Congress. Johnson & Johnson (J&J, New Brunswick, NJ) made front-page news throughout 2010 with multiple recalls of McNeil Consumer Healthcare's over-the-counter painkillers and cold medicines. Pfizer and J&J also had to recall thousands of drug packages tainted by foul odors that evidently came from chemicals applied to shipping pallets used in Puerto Rican plants. Glass flakes have been found in intravenous drugs made by Amgen (Thousand Oaks, CA) and Novartis.

FDA wants to conduct more inspections of foreign plants and to move aggressively against manufacturers found in violation of the rules. In addition to waving the enforcement stick, agency leaders talk of more guidance and assistance to help companies meet quality and safety standards and to bring high quality drugs more quickly to patients. The challenge is for industry and regulators to find the resources and appropriate policies to achieve these objectives in the coming year.