As we enter a new era in which executive agencies are headed by President Trump, we are also faced with many other transformative changes that will affect FDA-regulated entities in a significant and lasting way. This post will outline some of our thoughts related to what could face FDA and its various stakeholders as we go forward into the great unknown.

First, since being signed into law by President Obama on December 13th, we’ve been writing and speaking about the myriad provisions of the 21st Century Cures Act. This wide-ranging law has many mandates for agency actions and new guidance documents, which FDA will be working on beginning this year, but far beyond 2017 as well. Drug, biologic, and medical device stakeholders are also awaiting the outcome of the upcoming reauthorization of all the major User Fee Acts that are “must-pass” legislation before the end of the current fiscal year (FY17 ends on September 30th), in order to ensure FDA’s continuing operations. Many other policy changes that are expected to result from the switch from a Democratic-led to a Republican-led Executive Branch, the latter also being supported by a GOP-controlled Congress, will likely have major impacts on medical product developers.  Continue Reading FDA’s Enforcement Priorities Likely to Change in 2017 and Other “Unknowable Knowns”

Back in early October, we were all transfixed by the announced Mylan settlement with the U.S. Department of Justice (DOJ) over Mylan’s alleged underpayments of Medicaid Drug Rebates for the EpiPen.  Although Mylan indicated that its $465 million settlement resolved all potential liability to government programs over EpiPen’s classification for Medicaid Drug Rebate purposes, DOJ would not confirm the specifics of the settlement and it appeared that no actual settlement documents had even been drafted. We blogged our thoughts that the “settlement”  was actually a handshake deal that had not been reduced to writing, had not been agreed to by the states, and had left the extent of any releases and future compliance to be negotiated.  And we said Congressional scrutiny would not end due to the announced settlement.

Multiple state and government officials decried the announced settlement as inadequate. Senator Grassley went so far as to schedule a Senate hearing on the settlement, but was forced to postpone it when no one from DOJ or Mylan would agree to attend and testify.

Then the election intervened, and EpiPen rebates were yesterday’s news. However, Senator Grassley, for one, is not letting go.  But at this point, his focus is more on government action, or inaction, over drug classifications.  And depending on what his inquiry reveals, it may end up hurting, not helping, any government case against Mylan, and potentially other drug manufacturers, based on classification of drugs for purposes of Medicaid Drug Rebates.

Continue Reading Grassley Continues To Press CMS on Medicaid Drug Rebate Classifications: What Will Be the Fallout?

On Monday, FDA issued a final rule to amend FDA’s established definitions of “intended use” for drugs and devices, the primary consideration in determining whether a product is regulated for a particular use and what regulations apply.  The final rule also excludes products derived from tobacco from regulation as “tobacco products” if such products are intended for use as a drug, device, or combination product.  (We’ll be discussing the tobacco products portion of the rule in a separate post.)  While this rule could have a profound effect on marketing schemes for tobacco products, drugs, and medical devices, Congress’s passage of the Midnight Rules Relief Act could eliminate the rule before it ever takes effect.

Continue Reading Beyond the Eleventh Hour: FDA Prepares to Finalize Intended Use Amendments Despite Midnight Rule Relief Act

In this final installment of our Health Care Enforcement Review and 2017 Outlook series, we analyze health care enforcement trends gathered from 2016 civil settlements and criminal resolutions of health care fraud and abuse cases. Behind the headlines covering enormous recoveries in 2016, several themes are apparent.

The False Claims Act continued to generate large civil settlements.

Continuing the trend from recent years, the False Claims Act (“FCA”) remained the primary civil enforcement tool against health care providers as well as pharmaceutical, life sciences, and medical device companies, predominantly driven by qui tam FCA complaints filed by relators.  In fiscal year 2016, the Department of Justice obtained more than $4.7 billion in settlements and judgments from FCA cases, $2.5 billion of which it obtained from the health care industry.  Continue Reading Health Care Enforcement Review and 2017 Outlook: Significant Health Care Fraud and Abuse Civil Settlements and Criminal Resolutions

While 2016 marked one of the least productive years in the history of Congress, the same cannot be said of health care enforcement and regulatory agencies.  Perhaps motivated by the impending change in administration, these agencies promulgated a number of notable regulations in 2016, including:

  • A Department of Justice (DOJ) Interim Final Rule that significantly increases penalties under the False Claims Act (FCA), making already high stakes litigation even higher.
  • An Interim Final Rule from the Office of Inspector General for the U.S. Department of Health and Human Services (OIG) and other agencies increasing civil penalties for violations of various statutes and regulations, including the Civil Monetary Penalties Law (CMPL) and its implementing regulations.
  • A Final Rule that addresses the OIG’s expanded authority under the CMPL.
  • A long-awaited Final Rule from the Center for Medicare & Medicaid Services (CMS) concerning the “60 Day Rule” for returning overpayments.
  • A Final Rule from the OIG that amends the safe harbors under the federal Anti-Kickback Statute (AKS) and adds exceptions under the CMPL’s beneficiary inducement prohibition.

Below we discuss the highlights of each rule and how we expect each to impact the enforcement environment in 2017 and beyond. Continue Reading Health Care Enforcement Review and 2017 Outlook: Significant Regulatory Developments

Today, my colleagues Laurence Freedman, Samantha Kingsbury, and Karen Lovitch released the latest in our ongoing series reviewing health care enforcement activities in 2016 and their impacts looking forward to 2017. The client alert highlights major case law developments that influenced health care enforcement in 2016 and that will likely have major effects on the health care industry in the year ahead.

The client alert addresses the following issues raised by these important cases and what each might mean in 2017:

  • Implied false certification theory and materiality requirement (Escobar)
  • Anti-Kickback Statute discount exception and safe harbor (Organon; CCS Medical)
  • Proof of falsity in False Claims Act medical necessity cases (AseraCare)
  • Statistical sampling to prove liability in False Claims Act cases (Agape; Life Care Centers of America)

Please refer to our Health Care Enforcement Review and 2017 Outlook blog post series for additional insights on key government policies, regulations, and enforcement actions from 2016 and their expected impact on health care enforcement in the year ahead. We also encourage you to sign up for our annual webinar, Health Care Enforcement Review & 2017 Outlook, which will take place on Wednesday, January 25 at 1:00 p.m. ET.  Registration and additional information are available here.

Over the past year, clear trends have emerged in FDA’s enforcement activities. Enforcement arising from alleged violations of the Federal Food, Drug, and Cosmetic Act (FFDCA) can take many forms, including FDA advisory actions such as warning letters, adverse inspectional observations that can lead to specific administrative actions like product recalls or import detentions, and the pursuit of product seizures using express judicial tools, criminal convictions, or civil settlements in cooperation with DOJ. Structurally, individual compliance offices within the FDA centers and regional offices can initiate enforcement activity against regulated industries, while the FDA Office of Criminal Investigations (OCI) has primary responsibility for criminal investigations conducted by the FDA and works closely with DOJ in setting enforcement priorities for new cases. Continue Reading Health Care Enforcement Review and 2017 Outlook: FDA’s Wide-Ranging Activities

Next Tuesday, January 12th, Mintz Levin and ML Strategies will host the first installment of our three-part series focusing on the 21st Century Cures Act (“Cures Act”).  The Cures Act represents significant legislation that will have overarching implications on medical research, product development, and drug and biologic manufacturing.

Join my Mintz Levin and ML Strategies colleagues Tom CraneEllen Janos, and Rodney Whitlock, and moderator Bethany Hills, as they provide an introduction to the Cures Act.  Specific topics for this first webinar will include:

  • The political path taken to accomplish the Act, the compromises made, and the key implementation issues facing the Trump administration
  • Health information policies related to Electronic Health Records
  • Medicare delivery reform, coverage/payment changes, and OIG authorities
  • Mental health parity and new funding opportunities for substance use disorder prevention and improved mental health access and services
  • The “sense of Congress” on telehealth expansion and changes to HIPAA

Click here to register!  For more information on the Cures Act check out our prior blog posts covering provisions related to: (i) the role of Real World Evidence; (ii) the accelerated approval pathway for regenerative medicine; and (iii) drug and biologic manufacturers’ ability to promote their products to payors and health plans through well-developed “health care economic information.

Happy New Year! As we kick off 2017, our Health Care Enforcement Defense team brings you its annual review of key government policies, regulations, and enforcement actions in 2016, and the impact these trends are expected to have on enforcement in the year ahead. We start with a look at the Yates Memo and the uptick in the prosecution of individuals that has occurred since its publication.  Stay tuned for the rest of our series and an invitation to our annual webinar, Health Care Enforcement Review & 2017 Outlook, on Wednesday, January 25 at 1:00 p.m. ET.

In the year since the Department of Justice (DOJ) issued what is known as the Yates Memo, we have already seen that it in fact dictated actual change in DOJ enforcement policy.  While the long-held DOJ goal of charging individuals has not changed, the Yates Memo formalizes the requirement that federal prosecutors focus on identifying and pursuing potentially culpable individuals, and it establishes internal oversight mechanisms to ensure that they do.  In support of that reinvigorated goal and as intended, according to Deputy Attorney General Yates, the Yates Memo has changed the behavior of companies that learn of potential wrongdoing.  Companies have to make early and important decisions about how they conduct internal investigations, and they must quickly decide whether to disclose to the government – perhaps even before any conclusions are reached – to secure the greatest cooperation credit. Continue Reading Health Care Enforcement Review and 2017 Outlook: Yates Memo in Action

On January 12th at 1:00pm EST, my colleague Susan Foster, PhD will present a webinar on Transferring Data from the EU.  In particular, Sue will discuss the ways in which the EU General Data Protection Regulation creates new avenues for data transfers, and narrows others, and will also address sector-specific Commission decisions, privacy seals/certifications, the exception for non-repetitive, limited transfers, and the outlook for BCRs and Model Clauses.

Click here to register!  If you’ve missed the other installments of this important series on EU privacy, recording are available here.