Compliance Programs:
The Government asserted in its complaint that Merck-Medco acted in “deliberate ignorance” of the falsity of the claims by acting “with reckless disregard or deliberate ignorance of the truth or falsity of the information it submitted to the United States and its contractors in support of its claims.” The Government claimed that “this reckless disregard or deliberate ignorance arose because:”
A. The members of the Board of Directors and the Officers of the company “failed to satisfy their obligation to assure that the information and reporting systems exist in the organization that are reasonably designed to provide senior management and to the Board itself timely, accurate information sufficient to allow management and the Board… concerning the corporation's compliance with the law”
B. Merck-Medco “failed to implement a corporate compliance program which satisfied the requirements of proper corporate practice and Delaware law.”
C. The compliance program in place was not reasonably capable of reducing the prospect of misconduct. According to the Government, “most employees were either entirely unaware of the existence of such a program or were not familiar with its details”
D. There was no specific high-level personnel within Merck-Medco with direct responsibility for overseeing compliance with direct access to the CEO and the Board of Directors
E. There was no compliance officer within Merck-Medco with responsibility for independently investigating and acting on matters related to compliance, including...designing and coordinating internal investigations
F. When an internal investigation did occur, an affected executive would conduct the review but was not required to report the findings to the BoardG. There were no effective methods of monitoring, auditing, or reporting on compliance
