Appeals court upholds HHS's exclusion of former Purdue execs

The U.S. Court of Appeals for the District of Columbia Circuit largely upheld HHS's 12-year exclusion of three former executives of Purdue Pharma L.P. (Stamford, Conn.) from participation in federal healthcare programs based on misdemeanor convictions under the responsible corporate officer doctrine. The court ruled 2-1 in Friedman v. Sebelius that HHS properly exercised its power to exclude individuals who were convicted of a misdemeanor related to fraud, even if they were convicted under the doctrine, which does not require proof executives knew or participated in the wrongdoing. The three former Purdue executives pled guilty to misdemeanor misbranding for their failure to prevent the company's fraudulent misbranding of pain drug OxyContin.

However, the court ruled that the length of the penalty was "arbitrary and capricious," citing HHS's failure to justify its decision despite never previously excluding anyone for more than 10 years. The court remanded the penalty back to HHS for further consideration. ...