Pronouncements in recent months by the Department of Justice and Department of Health and Human Services Office of Inspector General predict an increased focus on the individual liability of healthcare executives. Recent plea agreements of executives in the pharmaceutical and medical device industries confirm that regulators are carrying out this focus on individual liability. On March 14, 2011, Douglas Donofrio, a former sales director of an orthopedic device manufacturer, pled guilty to conspiracy to violate the Anti-Kickback Statute. Additionally, in a different matter, on March 10, 2011, Marc Hermelin, the former CEO of a pharmaceutical manufacturer, pled guilty to two misdemeanor violations of misbranding under the Food, Drug, and Cosmetic Act under a responsible corporate officer theory of liability.

Donofrio received a sentence of five years probation, restitution of $50,000—the amount of a bonus he received as a result of his illegal conduct—and a $6,000 fine. Hermelin agreed to a total repayment of $1.9 million, including administrative forfeiture of $900,000 and a fine of $1,000,000. He was also sentenced to 19 days in jail and one year of unsupervised release.

Donofiro’s case is captioned United States v. Donofrio, 3:10-cr-836-GEB (D.N.J. Mar. 14, 2011), and his Plea Agreement and Judgment are available by clicking here and here.

Hermelin’s case is captioned United States v. Hermelin, 4:11-cr-85 (E.D. Mo. Mar. 10, 2011), and his Plea Agreement and Judgment are available by clicking here and here.