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; (3) anticonvulsants; (4) immunosuppressants for treatment of transplant rejection; (5) antiretrovirals; and (6) antineoplastics; except in limited circumstances. The Proposed Rule includes three exceptions, allowing: (1) broader use of prior authorization and step therapy; (2) exclusion of drugs that are only a new formulation of an existing single-source drug or biological product, regardless of whether the older formulation remains on the market; and (3) exclusion of drugs with a price increase beyond an inflation-based threshold relative to a baseline month and year.

Continue Reading CMS Proposes Revised Prescription Drug Regulations to Lower Drug Prices and Reduce Out of Pocket Expenses

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.
Continue Reading FDA Approves Marijuana-Derived, CBD-Containing Drug Epidiolex to Treat Certain Epilepsy-Associated Seizures

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 L.P.) paid nearly $700 million dollars in fines and plead guilty to criminal charges, admitting that, with the intent to defraud or mislead, it marketed and promoted  its drugs as less addictive and less subject to abuse.
Continue Reading Massachusetts Files Suit Against Connecticut-Based Purdue Pharma for Opioid Related Harms

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).
Continue Reading DOJ Announces Criminal Conviction of Physician for HIPAA Violation

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 under the FCA following the Supreme Court’s 2016 Escobar decision. In Escobar, the Supreme Court upheld the viability of the “implied false certification” theory of liability under the FCA in certain circumstances, and explained that for FCA liability to attach to a misrepresentation concerning compliance with a statutory, regulatory or contractual requirement, the misrepresentation must be material to the government’s payment decision.
Continue Reading Supreme Court Order Indicates Interest in Reviewing Campie, the False Claims Act Outlier of the Ninth Circuit

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 rationale that more research and marketing applications and submissions are being submitted that are supported by foreign investigations and that it was seeking to make its requirements more uniform.
Continue Reading FDA Amends Regulations for Acceptance of Data from Foreign and Domestic Investigation for Medical Devices

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 for initial fills of prescription opioids for the treatment of acute pain, potentially paired with a daily dose maximum (e.g., a limit of 50 MME).  According to CMS, this type of restriction may reduce the number of leftover opioid pills available to an opioid naïve patient, which in turn can reduce the risk that the patient develops an “affinity” for opioids that can lead to misuse and diversion.  CMS also proposes that Medicare Part D sponsors implement formulary-level opioid safety edits at the point-of-sale (POS) at pharmacies of 90 MME, which could only be overridden by a sponsor, and which may be paired with a 7-day supply allowance for initial opioid prescriptions for the treatment of acute pain.


Continue Reading CMS Considers 7-Day Limit on Initial Opioid Prescriptions under Part D

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.
Continue Reading CMS Approves Laboratory Alerts to Physicians in Rare Stark Law Advisory Opinion

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).
Continue Reading Ninth Circuit Relies on Escobar to Revive False Claims Act Suit Against Pharmaceutical Manufacturer

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) make a specific representation on a claim for payment to the government, and (2) fail to disclose noncompliance with a material requirement for payment, which failure renders that representation a “misleading half-truth” (even if the representation is true on its face).
Continue Reading Third Circuit Recognizes Escobar “Heightened Materiality Standard” in Dismissal of False Claims Act Case Tied to Avastin