Darshan Kulkarni explores why compliance isn’t just a side issue—it’s often the ultimate dealbreaker in pharma and biotech transactions.

When buyers look at acquiring a company in life sciences, they’re not just acquiring assets, patents, or promising pipelines. They’re also taking on the company’s regulatory baggage. If that baggage includes off-label promotion, billing fraud, improper trial oversight, or weak documentation, the deal could be dead on arrival.

Darshan explains how regulators—particularly the DOJ and FDA—expect compliance to be fully integrated into M&A due diligence. The DOJ’s Corporate Compliance Guidelines make it clear: compliance needs to be evaluated both before the acquisition and after the acquisition, because any lapses can lead to penalties, successor liability, or even personal liability for executives and investors.

He highlights that compliance red flags don’t just stall deals—they can change valuations, shift negotiation leverage, or cause buyers to walk away entirely. On the other hand, strong compliance systems can actually enhance a company’s attractiveness, helping reassure investors and acquirers.

Darshan also breaks down how OIG and FDA expectations, successor liability rules, and even global compliance standards all converge to shape the M&A landscape in life sciences. And for private equity? The message is simple: compliance isn’t a checkbox—it’s deal insurance.

The key takeaway? In life sciences M&A, compliance can make or break your investment. If you get it right, you buy not only a company but also credibility and long-term sustainability. If you get it wrong, you might inherit a regulatory nightmare that no deal price can fix.

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Brands often struggle to balance FDA cosmetic rules with FTC advertising standards. The FDA oversees labeling and determines whether a product is a cosmetic, drug, or soap, while the FTC enforces truth in advertising across all marketing. Claims like “clinically proven” require solid scientific evidence, and overreaching claims can trigger scrutiny from both agencies. For growing brands—especially those investing in digital marketing—regulatory compliance is essential. Aligning marketing claims with both excitement and credibility helps companies avoid enforcement risks, build consumer trust, and strengthen partnerships.

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Many clinical trial site leaders overlook critical risks hidden in physician employment agreements. These contracts often contain clauses that can expose sites to financial, legal, and operational danger if not carefully reviewed.

Key Risks to Watch Out For:

• Compensation Structures: Incentives tied to patient enrollment can raise anti-kickback and fraud concerns. Payments should reflect fair market value for time and expertise, not results.
  
  
• Data Ownership: If not explicit, investigators may claim ownership of trial data, patient lists, or publication rights. Agreements should clarify that the site owns study data and records.
  
  
• Non-Competes & Moonlighting: Overly broad restrictions may be unenforceable, while too weak protections allow PIs to compete directly. Clauses must be narrow, specific, and tied to legitimate business interests.
  
  
• Exit Strategies: Standard agreements often miss compliance safeguards. Sites need termination rights for events like loss of medical license, federal program exclusion, FDA disqualification, or protocol non-compliance.
  
  

Takeaway:
Physician agreements are not just HR paperwork—they determine a site’s survival. Poorly drafted contracts can act like ticking time bombs. Sites should ensure agreements protect data, comply with regulations, and safeguard operations.

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