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FDA Updates Digital Health Guidances to Align with 21st Century Cures Act
October 9, 2019 | Blog | By Benjamin Zegarelli
On September 26, 2019, FDA released a six revised digital health guidances. The primary objective of these revisions was to bring the guidances into alignment with the software function exemptions described in Section 3060 of the 21st Century Cures Act (the “Cures Act”). The medical device community has anticipated these changes since Congress passed the Cures Act almost three years ago in December 2016.
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HHS Files Brief in D.C. Circuit Supporting Drug Pricing Transparency Rule
September 30, 2019 | Blog
As promised, the Department of Health and Human Services (HHS) filed a brief in the United States Court of Appeals for the District of Columbia Circuit challenging the district court’s holding that the Secretary lacked the authority to compel drug manufacturers from disclosing drug prices in direct-to-consumers television advertisements (DTC rule). On September 23, 2019, HHS filed its appeal in the D.C. Circuit against plaintiffs Merck & Co., Eli Lilly and Co., and Amgen Inc. The brief argues that the district court erred in holding that HHS lacks the statutory authority through the Social Security Act (SSA) to force the DTC rule upon drug manufacturers because they are not direct participants in the Medicare and Medicaid programs.
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Compounding Pharmacy and Private Equity Firm Owner Agree to $21 Million Settlement to Resolve FCA Allegations
September 20, 2019 | Blog | By Xavier Hardy, Karen Lovitch
The Department of Justice (DOJ) recently announced that it has agreed to a $21.36 million settlement with compounding pharmacy Diabetic Care Rx LLC d/b/a Patient Care America (PCA), private equity firm Riordan, Lewis & Haden Inc. (RLH), and two PCA executives to resolve a pending False Claims Act (FCA) case. As discussed in a previous post regarding DOJ's decision to intervene, this case is notable because a private equity firm does not typically find itself subject to FCA action, and it is reported to be the first case against a private equity firm in which DOJ has chosen to intervene.
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ML Strategies Health Care Preview: Surprise Billing Issue Heats Up
September 16, 2019 | Blog | By Alexander Hecht
This week, Congress is working towards passage of a continuing resolution that would fund the government through the middle of November. This will give policymakers and appropriators enough time to hash out differences in funding priorities as well as work on policies addressing drug pricing, surprise billing, and funding for public health programs. The surprise billing issue is really heating up with outside stakeholder groups weighing in and Congress carefully considering its next steps. We cover this and more in this week's preview, which you can find by clicking here.
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Key Takeaways from CMS’s Final Rule Requiring the Disclosure of Affiliates during Provider Enrollment
September 12, 2019 | Blog | By Daryl Berke, Karen Lovitch
The Centers for Medicare & Medicare Services (CMS) recently published a final rule with comment period (the “Final Rule”) that is designed to increase CMS’s ability to identify and prevent bad actors from participating in Medicare, Medicaid, and CHIP. Providers and suppliers should take note because implementation will be costly and burdensome. Among other things, the Final Rule requires the disclosure of certain provider and supplier affiliations and permits CMS to revoke or deny enrollment where those affiliations pose an undue risk of fraud and abuse. The Final Rule also grants CMS several additional authorities to revoke or deny a provider’s Medicare enrollment and increases the duration of such revocations and denials. The Final Rule takes effect on November 4, 2019. Comments on the Final Rule are due by 5:00 p.m. on that same day.
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Eleventh Circuit Rules in AseraCare Case that Disagreements in Clinical Judgment, Without Objective Falsity, Do Not Prove Fraud Under the FCA
September 11, 2019 | Blog | By Samantha Kingsbury, Laurence Freedman, Brian Dunphy
On Monday, the U.S. Court of Appeals for the Eleventh Circuit issued its long-awaited and closely watched decision in United States v. AseraCare Inc.. The court ruled that a claim cannot be deemed false under the False Claims Act (FCA) based on a difference in clinical judgment. Instead, there must be proof of an objective falsehood. More than three years have passed since the U.S. District Court for the Northern District of Alabama issued the series of rulings that gave rise to the Eleventh Circuit case.
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Telemedicine Platform Recalled Over Failure to Obtain Pre-Market Clearance or Approval from FDA
August 29, 2019 | Blog | By Benjamin Zegarelli, Ellen Janos
On August 8, 2019, FDA issued a notice on its medical device recall database that a company called Opternative, Inc. had initiated a recall for the Visibly Online Refractive Vision Test, a software application offered directly to consumers. This represents a recent example of FDA taking enforcement action against a telemedicine software company that ultimately resulted in removal of the app from commercial distribution.
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HHS Drug Pricing Disclosure Rule: Chance at a Renewed Life Following District Court Appeal?
August 26, 2019 | Blog | By Joanne Hawana
Looks like the Drug Pricing Disclosure Rule may not have seen its last day in court. On August 21, 2019, the U.S. Department of Health and Human Services (HHS) filed a notice of appeal against a federal judge’s decision to block an HHS final rule that would require drugmakers to disclose product list prices within consumer-directed television advertisements for certain prescription drugs.
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Open Payments Program Expansion
August 12, 2019 | Blog | By Brian Dunphy, Rachel Yount
On July 30, 2019, the Centers for Medicare & Medicaid Services (CMS) announced more proposed changes to the Open Payments Program, otherwise known as the Sunshine Act. The proposed changes include new requirements that are expected to impose burdens on pharmaceutical and medical device manufacturers.
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In Policy Reversal, HHS and FDA Propose Plan to Import Foreign Drugs
August 8, 2019 | Blog | By Benjamin Zegarelli
On July 31, 2019, the U.S. Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) jointly published a proposal, called the Safe Importation Action Plan, to allow certain entities to import drugs from foreign entities. While this development was not a surprise given President Trump’s campaign promises to lower drug prices by, among other things, removing barriers to drug product importation, it represents a stark departure from prior agency positions that the importation of drugs could not be adequately verified as safe and would not lead to significant cost reductions.
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Three Things to Learn from Delaware Supreme Court’s Opinion on Board of Director Oversight Duties (Marchand v. Barnhill)
August 6, 2019 | Blog
In June 2019, the Delaware Supreme Court issued a decision reaffirming a risk of director liability where there is no board-level reporting process for essential compliance matters. The facts of the case arise from a 2015 listeria outbreak at Blue Bell manufacturing which resulted in the death of three people. The Delaware case reaffirmed the position that directors may be subject to liability if the director “(1) completely fail[ed] to implement any reporting or information system or controls, or (2) having implemented such a system or controls, consciously fail[ed] to monitor or oversee its operations thus disabling themselves from being informed of risks or problems requiring their attention.”
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OCR Releases New HIPAA FAQs on Care Coordination by Health Plans
July 11, 2019 | Blog
On June 26, 2019, the Office of Civil Rights (OCR) within the U.S. Department of Health and Human Services (HHS) released Frequently Asked Questions (FAQs) on how HIPAA allows health plans to share protected health information (PHI). The FAQs pose two questions: (1) whether HIPAA permits one health plan to share PHI about individuals in common with a second health plan for care coordination purposes; and (2) whether HIPAA permits health plans to use and disclose PHI to inform individuals about other health plans that it offers, without the individuals’ authorization, if the health plan received the PHI for a different purpose. The former answer is an affirmative “yes,” and the latter is a qualified answer of “yes, in certain circumstances.”
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Third Circuit Dismisses FCA Case Under Pre-ACA Version of Public Disclosure Bar
July 10, 2019 | Blog | By Jane Haviland
The Third Circuit Court of Appeals recently dismissed a relator’s False Claims Act (“FCA”) case under the pre-Affordable Care Act (“ACA”) version of the public disclosure bar. The court decided in U.S. ex rel. Denis v. Medco that to escape the FCA’s public disclosure bar by qualifying as an “original source” under the pre-ACA version of the FCA, a relator must have first-hand, non-derivative knowledge of conduct giving rise to the FCA claim.
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Federal Judge Strikes Down HHS Drug Pricing Disclosure Rule
July 9, 2019 | Blog
In follow-up to our previous post, the pharmaceutical industry gained a win on July 8th when a federal judge struck down the Trump administration’s rule that would have required drugmakers to include list prices for drugs in TV ads.
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Recent Executive Order Makes the Road to Increased Healthcare Transparency Unclear
July 2, 2019 | Blog | By Cassandra Paolillo
Last week, President Trump signed an “Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The order, which “seeks to enhance the ability of patients to choose the healthcare that is best for them,” includes a number of provisions requiring the Departments of Health and Human Services, Labor, Treasury and others to pass regulations to increase transparency for patients. The following is a summary of the executive order and a brief overview of what providers and others in the healthcare industry can anticipate going forward.
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Pharmaceutical Companies Object to HHS Drug Pricing Disclosure Rule
July 1, 2019 | Blog | By Joanne Hawana
Several parties from the pharmaceutical industry have teamed up with an advertising association to file a lawsuit against the Department of Health and Human Services (HHS) to prevent a new drug pricing disclosure rule from going into effect. The legal challenge was filed on June 14, 2019 and takes issue with a final rule adopted by HHS on May 8, 2019 (which we previously blogged about here) that purports to provide consumers with information regarding the price of prescription drugs. However, opponents to the HHS rule counter that the opposite will occur and that it will actually mislead patients about the price of prescription drugs. This point may not be difficult for the plaintiffs to demonstrate in support of their request for a declaratory judgment that the rule is unlawful, since even HHS has admitted in the final rule preamble that the new requirement may “discourage patients from using beneficial medications, reduce access, and potentially increase total cost of care.”
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Insys Bankruptcy Filing Immediately After Global Settlement Triggers Powerful Remedies
June 25, 2019 | Blog | By Samantha Kingsbury, Laurence Freedman
Over the last two years, much of the healthcare world has been watching the government’s prosecution of Insys Therapeutics for its sales and marketing practices related to its Subsys spray. Subsys is powerful and highly addictive fentanyl spray (administered under the tongue) that was approved by the FDA in 2012 for the treatment of persistent breakthrough pain in adult cancer patients who were already receiving, and tolerant to, regular opioid therapy. On June 5, 2019, DOJ announced a global resolution with Insys, including criminal pleas, a Deferred Prosecution Agreement (DPA), a civil settlement agreement, and a Corporate Integrity Agreement (CIA). Then, on June 10, 2019, Insys filed for bankruptcy protection, which triggered DOJ and HHS’s ability to upend these agreements and impose powerful criminal, civil, and exclusion remedies against Insys. While much of the coverage of this case over the last few years has focused on the high-profile prosecution and conviction of company executives (including Insys’s founder) and other employees who were accused of paying kickbacks to prescribers in exchange for increased prescriptions and increased doses of Subsys, the resolution of this case on the corporate side has proven to be equally fascinating.
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Heritage Pharmaceuticals Admits to Generic Drug Price Fixing Scheme
June 13, 2019 | Blog | By Farrah Short
In the latest development in the Department of Justice (DOJ) Antitrust Division’s ongoing investigation into the generic pharmaceutical industry, Heritage Pharmaceuticals, Inc. has entered into a deferred prosecution agreement (DPA) with DOJ. The terms of the DPA require Heritage to pay a $225,000 criminal penalty and provide full cooperation with the ongoing investigation. The one-count felony charge, filed in the Eastern District of Pennsylvania on May 30, alleges that Heritage violated Section 1 of the Sherman Act by conspiring with multiple unnamed parties to divide up the domestic market and fix prices for glyburide, a diabetes medication, from April 2014 through December 2015. According to DOJ, the DPA provides that the United States will not prosecute Heritage for three years.
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OIG Issues Fraud Alert Regarding Fraudulent Genetic Testing Schemes
June 5, 2019 | Blog | By Karen Lovitch
Earlier this week the OIG took the somewhat unusual step of issuing a fraud alert directed to Medicare beneficiaries (rather than to Medicare providers) regarding “fraud schemes” that involve genetic testing. According to the OIG, beneficiaries are being offered genetic tests in order to obtain their Medicare information, which is then used to commit identity theft or to submit fraudulent claims to Medicare. Beneficiaries are being targeted through telemarketing calls, booths at public events, health fairs, and door-to-door visits.
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CMS Finalizes Medicare Advantage and Part D Drug Pricing Rule
May 28, 2019 | Blog | By Bridgette Keller, Daryl Berke, Lauren Moldawer
Earlier this month, CMS issued a final rule aimed at lowering drug prices and reducing out-of-pocket expenses in Medicare Advantage and Medicare Part D. This rule is the Administration’s latest effort to address prescription drug prices and builds off the Administration’s Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs and arrive on the heels of CMS publishing a rule requiring the disclosure of drug prices in TV ads. Below we’ve provided a brief overview of the major provisions in the final rule, noting changes from the proposed rule that was issued in November 2018.
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