Pharmaceutical manufacturers are challenging the breadth of the Federal Anti-Kickback Statute (“AKS”) in federal court, arguing that the government is harming the very vulnerable patients it aims to serve by prohibiting cost-sharing subsidies for life-saving oncology drugs. In October, we discussed the Office of Inspector General’s (“OIG”) Advisory Opinion No. 22-19 (the “Advisory Opinion”), which declared that a charitable organization funded by manufacturers would violate the AKS if it offered certain cost-sharing subsidies under Medicare Part D (“Part D”), even if the organization was independently run and patients had equal access to discounts for 90% of drugs on the market. On November 9, 2022, the Pharmaceutical Coalition for Patient Access (“PCPA”), presumably the organization behind the Advisory Opinion, filed a lawsuit against OIG, seeking declaratory judgment that its cost-sharing program is legal under the AKS and that the Advisory Opinion violates the Administrative Procedure Act (“APA”) and the First Amendment.
Keeley McCarty is an associate in the Governmental Practice in the firm's Washington, D.C. office.
The United States’ recent False Claims Act (“FCA”) prosecution in United States v. Prometheus Group, et al., is a reminder that the government will use the FCA to target medical device manufacturers for off-label use of medical devices, even where healthcare providers have decided the use is safe and effective. In Prometheus Group, the government alleges that the defendant medical device manufacturer trained providers to re-use disposable rectal probes against U.S. Food and Drug Administration (“FDA”) recommendations, causing the providers to submit false claims for payment to Medicare for the services mis-using the probes. The complaint alleges that Prometheus put vulnerable Medicare patients at risk to gain a marketing advantage by reducing overhead costs associated with its systems. The message to medical device manufacturers is clear: even without submitting claims to the government themselves, manufacturers can face FCA liability for suggesting providers use their devices in any way the FDA has not approved (and in this case, warned against).…
On January 13, 2022, the United States Supreme Court upheld the Centers for Medicare & Medicaid Services (“CMS”) Interim Final Rule (the “Rule”) in a 5-4 decision, staying the preliminary injunctions issued for 24 states by the District Courts for the Eastern District of Missouri and the Western District of Louisiana. Therefore, the CMS vaccine mandate is in full effect for all states except Texas, which was not part of the cases before the Court. The Rule requires nearly all workers at Medicare- and Medicaid-certified facilities—whether medical personnel, volunteers, janitorial staff, or even contractors who service the facilities—to be fully vaccinated against COVID-19 unless they qualify for a medical or religious exemption.
Continue Reading U.S. Supreme Court Lifts Preliminary Injunctions on Healthcare Worker Vaccine Mandate
On December 22, 2021, the Food and Drug Administration (FDA) published draft guidance documents for manufacturers of devices that were issued Emergency Use Authorizations (EUAs) or were subject to relaxed enforcement policies during the COVID-19 pandemic. Acknowledging that the COVID-19 emergency will not last forever, the FDA’s recent draft guidances propose a 180-day transition path back to “normal operations,” i.e., compliance with the Federal Food, Drug, and Cosmetic Act (FDCA) and regulatory requirements. The transition periods, which would begin (in most cases) 180 days after the end of the public health emergency (PHE), would allow manufacturers, healthcare facilities, and other stakeholders to avoid supply disruptions and product shortages. Following the transition period, manufacturers who want to continue selling covered devices would be expected to comply with all the usual regulatory requirements. Manufacturers who do not wish to continue distribution post-PHE could keep business as usual through the end of the 180-day transition period. Comments on the draft guidance are due on March 23, 2022. The guidance for EUA devices can be found here, and for devices marketed under COVID-19 enforcement policies, here.
Continue Reading FDA Releases Guidances on Transition Plan for Devices Distributed Under Emergency Use Authorization (EUA) or Enforcement Policies During COVID-19
The ABA Washington Health Law Summit is the premier legal conference focusing on health law policy and, as a result, offers insight into current and future major policy issues. But, as always at this conference, there are the issues selected by the conference chairs and formally on the agenda – and then there are issues experienced practitioners can identify by reading between the lines. Both are addressed below.
Continue Reading Health Law Policy Heading Into 2022 At The ABA Health Law Summit
On August 13, 2018, President Trump signed into law the National Defense Authorization Act (NDAA) of 2019. While the annual NDAAs are tracked, analyzed, and picked apart with great care by the federal contracting community, the health care industry typically pays them little mind. But ignoring the 2019 NDAA would be a big mistake, because tucked within its more than 1,000 sections is one that will have a significant impact on many health care industry players. It’s known as Section 889. Read our thoughts on Section 889’s impact on the Health Care industry here.
Continue Reading Why the Health Care Industry Should Be Concerned About Section 889 of the 2019 National Defense Authorization Act
The “Granston Memo” has proven to be a boon again in 2019 for False Claims Act (“FCA”) defendants. In a January 15, 2019 Sheppard Mullin FCA Defense Blog article, we highlighted a growing movement by the Department of Justice (“DOJ”) to utilize its dismissal power on meritless and burdensome qui tam FCA cases following an internal policy memorandum issued in early 2018, now dubbed the “Granston Memo.” The Granston Memo encouraged DOJ attorneys to seek dismissal of such cases where it served one or more important policy objectives. The DOJ has met with almost uniform success in its continued focus on this effort: since the Memo issued, the DOJ has sought dismissal in 36 cases and been unsuccessful only twice. …
Continue Reading The Granston Memo in 2019: Recent Cases Highlight the Granston Memo’s Effectiveness as a Tool to Dismiss False Claims Act Cases
There are big changes happening in military healthcare procurement. Some are unsurprising given the October 1, 2019 deadline for the reorganization of all military hospitals and clinics under the management of the Department of Defense (DOD), Defense Health Agency (DHA). But some may be unexpected, reaching all the way to Department of Veterans Affairs (VA) procurement, though the extent to which the VA will ultimately be affected is unclear. In the past few weeks, at least three major announcements were made regarding military healthcare: (1) DHA and the Defense Logistics Agency (DLA) signed a memorandum of agreement (MOA) regarding their respective rolls in DOD healthcare, (2) DLA gave the VA access to its medical/surgical prime vendor formulary indefinitely, and (3) the VA cancelled its long-anticipated prime vendor solicitation under the Medical/Surgical Prime Vendor (MSPV) 2.0 program. Is this all a coincidence? Probably not.
Continue Reading What’s the VA Got to Do With It? Military Medical Procurement Changes Reach the VA
The U.S. Department of Defense (“DOD”) claims that fraud and abuse is inhibiting the ability of the Defense Health Agency (“DHA”), the agency responsible for administering TRICARE, to support and deliver “integrated, affordable, and high quality health service to all DOD beneficiaries” and to be “a responsible steward of taxpayer dollars.” Noting that the Department of Justice (“DOJ”) has limited resources to prosecute those who commit fraud and abuse against the TRICARE program, the DOD now seeks to step in and ramp up enforcement.
Continue Reading The Military Health Care Fraud and Abuse Prevention Program: The Department of Defense Issues Proposed Regulations regarding TRICARE and Civil Monetary Penalties
The Defense Health Agency (DHA), which manages the TRICARE health care benefits, has issued a Request for Information (RFI) regarding inpatient-clinic administered pharmaceuticals formulary management. In other words, responding vendors have the opportunity to shape the standard list of drugs prescribed across all military medical treatment facilities (MTFs), as well as the broader program administering the list. Responses are due February 5, 2019. The RFI seeks commercial best practices in formulary management focusing on inpatient and medical benefit drugs, but also opens the door for responding vendors to describe their capabilities to train a formulary management staff, to develop approaches to formulary management, to compare program results, to maximize acceptance of an implemented program, and to utilize pharmacists in an inpatient setting.
Continue Reading TRICARE: Defense Health Agency Issues Request for Information Regarding Formulary Management – Submission Deadline: February 5, 2019