Guidance is as guidance does, the Department of Justice said recently.
The DOJ said guidance documents can no longer be used as a basis for bringing civil enforcement actions. The policy may tamp down the risk companies could face catastrophic punitive damages, particularly in False Claims Act cases.
“In the past, the Department of Justice and other agencies had blurred the distinction between regulations and guidance documents,” the DOJ said in a Jan. 25 statement announcing the policy.
“To the extent the guidance is the basis for enforcement-type actions against life sciences companies, this could have significant impact, but time will tell,” Karla L. Palmer, a life sciences lawyer at Hyman, Phelps & McNamara, P.C. in Washington told me Jan. 26.
The guidance shows the Trump administration’s regulatory reform task force is taking on important issues that will have an impact, Katie McDermott, a health-care fraud attorney with Morgan, Lewis & Bockius LLP in Washington told me Jan. 26.
There are many example of reliance on guidance documents, McDermott said.
In health care, for example, local coverage determinations (LCDs) issued by local Medicare contractors, which are often relied upon notwithstanding substantial inconsistencies, which allows for unfair discriminatory enforcement,” she said. It can also have the effect of creating different benefits for Medicare patients depending on where they reside, she added.
The new policy follows on the heels of a November 2017 memo issued by Attorney General Jeff Sessions, which prohibited agency guidance documents from being converted into binding rules.
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