The Department of Justice (DOJ) recently announced two high-dollar False Claims Act (FCA) enforcement actions involving allegedly fraudulent arrangements tied to the implementation and use of electronic health record systems (EHRs). The respective settlements enable recovery by DOJ of over $100 million, and immediately precede the government’s recent proposal of new rules to promote the interoperability of EHRs. The settlements thus serve as an important reminder of the importance of adhering to federal fraud and abuse laws and regulations as hospitals and other health care providers continue to implement EHR …
Archives: Life Sciences
Subscribe to Life Sciences RSS FeedHHS Proposes to Amend AKS Safe Harbors to Exclude PBM Rebates and Incentivize Consumer Drug Discounts
On February 6, 2019, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) published a proposed rule (Proposed Rule) that would amend the safe harbor regulations under the Federal Anti-Kickback Statute. The Proposed Rule is intended to “address the modern prescription drug distribution model” and make sure that the safe harbors “extend only to arrangements that present a low risk of harm to the Federal health care programs and beneficiaries.” Specifically, in the Proposed Rule OIG proposes to alter the definition of “discounts” under the so-called …
OIG Advisory Opinion No. 19-02 Allows Pharmaceutical Manufacturer to Temporarily Loan Smartphones to Financially Needy Patients to Receive Data from a Digestible Medication Sensor
On January 24, 2019, the Office of Inspector General (“OIG”) issued a favorable advisory opinion allowing a pharmaceutical manufacturer (“Manufacturer”) to temporarily loan limited-functionality smartphones to financially needy patients who lack the required technology to receive adherence data from a sensor embedded in a prescribed antipsychotic medication (“the Arrangement”). The OIG concluded that the Arrangement did not constitute grounds for penalties under the Civil Monetary Penalties law (“CMP”) and that although the Arrangement could potentially cause remuneration under the Anti-Kickback Statute (“AKS”), the OIG would not impose sanctions on the …
CMS Proposes Revised Prescription Drug Regulations to Lower Drug Prices and Reduce Out of Pocket Expenses
The Centers for Medicare and Medicaid Services (CMS) announced a Proposed Rule to amend Medicare Advantage (MA) regulations and Prescription Drug Benefit program (Part D) regulations. The Proposed Rule was published on November 30, 2018. The Proposed Rule is intended to help lower drug prices for health and drug plans and reduce out-of-pocket costs for MA and Part D enrollees. Major provisions include: Providing Plans with increased flexibility in managing drug formularies. Current policy requires Part D formularies to include all drugs in the following categories: (1) antidepressants; (2) antipsychotics; …
FDA Approves Marijuana-Derived, CBD-Containing Drug Epidiolex to Treat Certain Epilepsy-Associated Seizures
On June 25, 2018, the U.S. Food and Drug Administration approved Epidiolex, an orally administered drug derived from the marijuana plant, Cannabis sativa. The drug is approved for use for patients two years and older, for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome, both of which are rare and severe forms of epilepsy. It is the first drug that FDA has approved for Dravet patients.…
Massachusetts Files Suit Against Connecticut-Based Purdue Pharma for Opioid Related Harms
On June 13, 2018, Attorney General Maura Healey filed a complaint in Massachusetts Superior Court on behalf of the Commonwealth against Purdue Pharma Inc. and Purdue Pharma L.P., Connecticut-based drug companies that manufacture and market OxyContin. The lawsuit also names sixteen individual defendants, including current and former CEOs and certain members of the board of Purdue Pharma Inc. This is not the first time a Purdue Pharma company has been accused of wrongdoing with respect to the marketing of opioids. In 2007, Purdue Frederick Company (an affiliate of Purdue Pharma …
DOJ Announces Criminal Conviction of Physician for HIPAA Violation
On April 30, 2018 a Massachusetts physician was convicted of a criminal violation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as well as one count of obstruction of a criminal health care investigation, in a Massachusetts federal court. The convictions relate to the purported sharing of confidential patient information by the physician with pharmaceutical sales representatives that allowed the pharmaceutical company to target patients with specific conditions (and to correspondingly facilitate the receipt of prior authorizations for the company’s drugs from patients’ insurers).…
Supreme Court Order Indicates Interest in Reviewing Campie, the False Claims Act Outlier of the Ninth Circuit
In an order issued on April 16, 2018, the U.S. Supreme Court invited the Solicitor General to file a brief “expressing the views of the United States” concerning the 2017 decision of the U.S. Court of Appeals for the Ninth Circuit in the False Claims Act (FCA) case U.S. ex rel. Campie v. Gilead Sciences, Inc. (see our previous analysis of the case here). The Campie case is noteworthy because it created a split among the circuit courts as to the scope of the “government knowledge” defense to materiality …
FDA Amends Regulations for Acceptance of Data from Foreign and Domestic Investigation for Medical Devices
On February 21, 2018, the Food and Drug Administration (FDA) published a Final Rule, amending its regulations on acceptance of data from investigations for medical devices that are performed outside of the United States as well as modifying certain regulations applicable to data from US-sited investigations. The Final Rule does not go into effect until February 21, 2019 – a full year after promulgation. The FDA also issued guidance in the form of Frequently Asked Questions (FAQ) addressing the new regulations. In the FAQ document, the FDA explained its …
CMS Considers 7-Day Limit on Initial Opioid Prescriptions under Part D
In a Draft Call Letter issued February 1, 2018, the Centers for Medicare & Medicaid Services (CMS) announced that it is considering a number of new strategies to address opioid overutilization within the Medicare Part D program. CMS is particularly concerned with chronic overuse among beneficiaries taking high levels of prescription opioids (e.g., beneficiaries prescribed opioids with a 90 morphine milligram equivalent (MME) dose or higher per day), beneficiaries with multiple prescribers, and “opioid naïve” patients (i.e., patients newly prescribed opioids).
CMS’s strategies include consideration of a 7-day supply limit …
CMS Approves Laboratory Alerts to Physicians in Rare Stark Law Advisory Opinion
The Centers for Medicare & Medicaid Services (CMS) issued a rare advisory opinion (CMS-AO-2017-1) under the Stark Law (Section 1877 of the Social Security Act, codified at 42 U.S.C. § 1395) earlier this fall, addressing a proposed arrangement under which a web-based diagnostic testing portal sought to provide referring physicians with free alerts related to test results.…
Ninth Circuit Relies on Escobar to Revive False Claims Act Suit Against Pharmaceutical Manufacturer
On July 7, 2017, the U.S. Court of Appeals for the Ninth Circuit reversed a federal district court’s dismissal of a False Claims Act (FCA) whistleblower suit in United States ex rel. Campie v. Gilead Sciences, explaining that the district court did not have “the benefit of” the Supreme Court’s 2016 decision in Escobar at the time the suit was dismissed for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).…
Third Circuit Recognizes Escobar “Heightened Materiality Standard” in Dismissal of False Claims Act Case Tied to Avastin
In May 2017, the U.S. Court of Appeals for the Third Circuit relied on the “heightened materiality standard” endorsed by the U.S. Supreme Court in its 2016 Escobar decision in dismissing a False Claims Act (FCA) whistleblower suit filed against pharmaceutical giant Genentech related to its billion dollar cancer drug Avastin. In Escobar, the Supreme Court upheld the validity—“at least in some circumstances”—of the “implied false certification” theory of FCA liability, and provided that this theory can attach where at least two conditions are met: a defendant must (1) …
Supreme Court Decision Allows Faster Marketing of Biosimilars
On Monday, June 12, 2017, the United States Supreme Court in a unanimous decision held that manufacturers making biosimilars of biologic drugs did not have to wait until after gaining federal approval of the biosimilar to notify the manufacturer of biologic reference products (Sponsor) that they intend to commercially market a biosimilar drug. The Court’s decision addresses two cases in the same opinion: Sandoz v. Amgen and Amgen v. Sandoz. …
Senate Proposes Expanded Use of Telehealth
On May 18, 2017, the Senate Finance Committee voted to move forward a bill entitled the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017 (S870), which would increase access to telehealth services in the home.
Telehealth is the use of electronic information and telecommunications technology to support remote clinical healthcare, patient and professional health related education and other healthcare delivery functions. …
FDA Delays Intended Use Regulations
The U.S. Food and Drug Administration (FDA) announced that it was delaying until March 19, 2018, a Final Rule that has been viewed as having a chilling effect on scientific speech in attempting to broaden FDA’s authority to find an “intended use” for an approved or cleared medical product. FDA extended the effective date to allow additional public comments after a petition filed on behalf of various industry groups challenged the Final Rule (dockets FDA-2011-P-0512, FDA-2013-P-1079, FDA-2015-N-2002, and FDA-2016-N-1149).
In the Final Rule, FDA had amended the intended use …
OIG Issues Favorable Advisory Opinion for Cost-sharing Waivers and Stipends in a Clinical Research Study
On December 13, 2016, the Office of Inspector General (OIG) issued a favorable Advisory Opinion to a university health system (the Requestor) for two arrangements relating to a federally-funded clinical research study designed by a physician-employee (the Study):
- a proposal to waive the cost-sharing obligations of Study participants (Participants) for medically necessary health care services received under the Study protocol (the Proposed Arrangement), and
- payment of a stipend to Participants for the time and effort required to participate (the Current Arrangement).
FDA Final Rule on Postmarketing Safety Reporting for Combination Products
On December 20, 2016, the Food and Drug Administration (FDA) published regulations (Final Rule) establishing postmarketing safety requirements for combination products, which are products comprised of:
(1) a drug and a device;
(2) a device and a biological product;
(3) a biological product and a drug; or
(4) a drug, a device, and a biological product.
“Postmarketing safety” involves manufacturing events, device malfunctions, and events causing injury to users, and the reporting requirements relating to product and patient safety arising from these events. …
FDA’s Program for Parallel Review of Medical Devices
On October 24, 2016, the Food and Drug Administration (FDA) and the Centers for Medicare & Medicaid Services (CMS) published a joint announcement of their plan to continue the Program for Parallel Review of Medical Devices.
The Program is a collaborative effort that is intended to reduce the time between FDA marketing approval and Medicare coverage decisions through the CMS National Coverage Determinations (NCD). The goal is to “ensure prompt and efficient patient access to safe and effective and appropriate medical devices for the Medicare population.”
The Program began in …
