Health Care

On January 15, 2019, Governor Cuomo released the 2019-2020 Executive Budget, which proposes substantial legislative changes that would affect pharmacy benefit managers (PBMs).  Among other things, the law would require PBMs to be licensed and places limitations on how they can be compensated. This week, the State Senate released its own Budget that, while joining the Governor's efforts to regulate PBMs, purports to create additional safeguards around PBM business activities, including increased financial penalties on PBMs that violate the law.

Last week, a U.S. district court judge in the Southern District of Florida upheld a magistrate judge’s decision to dismiss False Claims Act (FCA) allegations against a compounding pharmacy, its private equity firm owner, and two individuals. DOJ filed its complaint in intervention last February against the pharmacy, Patient Care America (PCA); its private equity backer, Riordan Lewis & Haden, Inc.; and two individual executives. The government alleged that the parties engaged in an illegal kickback scheme that resulted in the submission of false claims to TRICARE for expensive compounded drugs. This case is reportedly the first in which the federal government intervened against a private equity firm owner.

In our first two Device Modernization series posts, we discussed FDA’s 510(k) modernization efforts and the proposed De Novo regulation. FDA has also had a heavy hand in legislative efforts to retool oversight of laboratory developed tests (LDTs) and other in vitro diagnostics (IVDs). The proposed approach would create an entirely new category of medical product separate from medical devices known as in vitro clinical tests (IVCTs).

On March 5, 2019, FDA Commissioner Scott Gottlieb announced his resignation. The physician and venture capitalist, ​for whom this was ​a second stint at the FDA, intends to leave the agency in about a month to spend more time with his family. In this post, Aaron Josephson reflects on Dr. Gottlieb's time leading the FDA and its future after his departure.

AltaMed Health Services (AltaMed) and California Physicians Services (doing business as Blue Shield of California (BSC)) recently received notice from their business associate, Sharecare Health Data Services (SHDS), of a hack of SHDS’s network that stores patients’ medical records.  The hacker was able to acquire and/or access patients’ protected health information (PHI) contained in the medical records kept by SHDS on behalf of AltaMed and BSC. The breach of AltaMed’s data was discovered on June 22, 2018, and the breach for BSC was discovered a few days later on June 26, 2018. Upon investigation, however, officials determined that both breaches went undetected for over a month and actually began on May 21, 2018.

On February 26, 2019, the Senate Finance Committee heard testimony from top executives representing seven high-profile drug manufacturers.  This hearing was the second to examine drug pricing in America. The Committee’s questions to executives from Pfizer, Merck & Co., Johnson & Johnson, AbbVie, Bristol-Myers Squibb, Sanofi, and AstraZeneca were aimed at identifying why already-high drug prices continue to climb and what can be done to stop the trend. The hearing comes during a period of increasing pressure on pharmaceutical manufacturers and others in the drug supply chain to improve patient access to drugs, increase transparency in drug pricing, and stop the trend of significant price increases.  This type of high profile hearing just confirms that these pressures will continue, and as a number of proposals to address drug prices work their way through Congress and multiple federal agencies, the discussion around drug pricing reforms will undoubtedly continue.  Following on ML Strategies’ coverage of the Senate hearing, below are a handful of key takeaways from the hearing.

As Congress continues its oversight of prescription drug prices, the Senate Finance Committee will also examine abuse and neglect at nursing homes. Meanwhile, the House of Representatives is looking at ways to lower health care costs as it keeps it eye on lowering drug costs as well. The focus and intensity around drug pricing is not expected to diminish anytime soon. For our complete health care preview...

What might 2019 mean for the 340B program? This post addresses the on-going litigation over the OPPS Medicare payment reduction for 340B drugs, ceiling price validation, and state initiatives related to the 340B program.

On Tuesday, executives from seven of the largest pharmaceutical companies testified before the Senate Finance Committee on rising prescription drug prices. While the hearing was expected to be packed with fireworks as Senators of both parties grilled the nation's top pharmaceutical executives, it was largely uneventful.

In our first Device Modernization series post, we discussed how FDA is proposing to modernize the 510(k) review program. FDA also recently issued a proposed regulation for the De Novo program and linked that proposed regulation to 510(k) modernization efforts as part of a broader strategy to improve device safety.

The proposed De Novo regulation, issued December 5, 2018, would codify into regulation many of the policy and programmatic features of the De Novo program that are currently outlined in guidance documents. Because guidance is nonbinding, FDA is seeking through the proposed regulation to provide structure, clarity, and transparency to the De Novo process in a way that would be binding on De Novo submitters.

Do you manufacture, import, or market personal hygiene and wellness devices sold in drugstores? If so, you may be focused on U.S. Food and Drug Administration (FDA) compliance, but may not have considered the requirements of another Federal regulatory agency: the Federal Communications Commission (FCC). Manufacturing, importing, and/or marketing non-compliant personal hygiene, wellness and similar devices may violate the FCC’s rules.

This week, Congress will dive into rising prescription drug costs with a hearing in the Senate Finance Committee. The hearing will feature seven top drug manufacturer executives and will focus on rising drug prices and transparency, among other topics. The Finance Committee is also looking into insulin price increases, joining the House Oversight Committee in investigating a number of prescription drug price increases. We cover this and more in this week's preview, which you can find by...

Last month, we highlighted a few of the changes CMS proposes in Parts I and II of the Advance Notice and Draft Call Letter. Here, we take a look at CMS’s next steps to combat opioid misuse. CMS is rolling out several new initiatives in this space this year and next.

In our “FDA 2018 Year in Review (and a Few Thoughts on 2019)” post and recent webinar, we observed that we may look back at 2018 as the beginning of the end for the 510(k) program as it has existed since the 1976 Medical Device Amendments to the Federal Food, Drug, and Cosmetic Act. The 510(k) pathway has been scrutinized for years and among the most damning criticisms leveled against it is that it is a loophole that lets unsafe products on the market by allowing manufacturers to, in most cases, avoid clinical testing. As long as the Federal Food, Drug, and Cosmetic Act allows for 510(k)s, though, FDA has to make the review program work, so the agency is looking for ways to improve the safety of 510(k)-cleared devices rather than burying its head in the sand.

The Department of Justice (DOJ) recently announced a $1.99 million False Claims Act (FCA) settlement with GenomeDx Biosciences Corp. (“GenomeDx”), a laboratory headquartered in Vancouver, British Columbia with operations in San Diego. The matter arose as the result of a qui tam case brought by two former employees in September 2017.

Read about health care qui tam litigation trends for the 12 months that ended on January 31 and significant cases, including two involving the issue of medical necessity.

Federal regulators are flexing their regulatory muscle to accelerate a long-desired but often elusive goal: the interoperability of health information technology (health IT) systems. Interoperability refers to the ability of different health IT systems, including electronic health record (EHR) systems, to meaningfully communicate with one another.

Last week the Department of Justice (DOJ) announced a $57 million settlement with electronic health record (EHR) software vendor Greenway Health LLC (Greenway).  According to DOJ, Greenway violated the False Claims Act (FCA) by fraudulently obtaining certification of its software and misrepresenting its software’s capabilities to customers, thereby causing its customers to submit false attestations of “meaningful use” of EHR technology when seeking to qualify for incentive payments available through the Medicare and Medicaid EHR Incentive Program.  The complaint also alleged that Greenway illegally paid kickbacks to customer in exchange for recommendations to prospective new customers.

As of January 30, 2019, CMS lifted its temporary provider enrollment moratoria for home health agencies in Florida, Illinois, Michigan and Texas. The Enrollment Moratorium had prevented new home health agencies in these states from enrolling in Medicare and Medicaid.

Forty-five states and Puerto Rico have now enacted laws that permit or require pharmacists to dispense an interchangeable biological product in certain situations. The remaining states that have not yet passed legislation on the topic are: Alabama, Arkansas, Maine, Mississippi, Oklahoma, and the District of Columbia. We have been tracking and summarizing these laws over the past three years, and you can find our updated chart...