Health Care Counsel

Arent Fox's health care law blog offers news, analysis, and insights for the health care industry.

Health Care Counsel

Blog Posts by Stephanie Trunk

Prescription Drug Pricing & Government Price Reporting
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Pharma Industry Take Note: Maryland Passed Price-Gouging Prohibition
Alleged price gouging by drug manufacturers and distributors has been in the news the past several years, causing many lawmakers to threaten to take action. Maryland has become the first state to do so – on May 26, 2017, Governor Larry Hogan of Maryland informed the Maryland Speaker of the House that he would permit H.B. 631, also known as the “Prohibition Against Price Gouging for Essential Off-Patent or Generic Drugs”(437th Gen. Assemb., Reg. Sess. (Md. 2017)) to become law. The Act takes effect October 1, 2017, and makes Maryland the first state in the nation to prohibit “price gouging” by manufacturers or wholesale distributors of generic prescription drugs. Of note, Governor Hogan did not sign the bill into law, rather he decided not to veto it, rendering the bill law after 30 days.
 
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Prescription Drug Pricing & Government Price Reporting
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Reminder to Generic Manufacturers: Q1 2017 Unit Rebate Amounts Billed by State Medicaid Programs Will NOT Include Additional Discounts

Pursuant to the Bipartisan Budget Act of 2015, manufacturers participating in the Medicaid Drug Rebate Program must pay an Additional Discount on Non-Innovator products to the extent the Average Manufacturer Prices (“AMPs”) of their products are rising faster than inflation when compared to a base line period. However, the Centers for Medicare & Medicaid Services (“CMS”) stated in April 14, 2017 e-mail correspondence to manufacturer technical contacts listed for the Drug Data Reporting for Medicaid System (“DDR”) that DDR system updates needed to automate the Additional Discount calculation on Non-Innovator products were not finalized in time and, as such, first quarter 2017 Unit Rebate Amounts for Non-Innovator products will NOT include the calculated Additional Discount, if any.

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E-Health, False Claims Act, Telemedicine & E-health
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Not Just for Health Care Providers Anymore: Health IT Vendor Pays $155 Million to Settle False Claims Act Case
Last week, eClinicalWorks (ECW)—an electronic health records (EHR) vendor—settled an intervened False Claims Act case with the Department of Justice for $155 million. This novel FCA settlement illustrates that health care fraud prosecution extends far beyond just the health care providers and payors that directly submit claims to Medicare, Medicaid and other federal health care programs, and can extend liability to subcontractors, agents, and vendors.
 

EHR Tech Must Meet “Meaningful Use” Standards

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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HRSA Delays Effective Date of 340B Final Rule…Again

In a notice published in the Federal Register on Friday, May 19, 2017, the Health Resources and Services Administration announced that it would further delay the effective date of a final rule applicable to all drug manufacturers participating in the 340B Drug Pricing Program.

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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Implementation and Enforcement of 340B Final Rule Delayed

In a Federal Register notice scheduled to be published on March 20, 2017, the Health Resources and Services Administration (HRSA) announced that it will delay the effective date of the January 5, 2017 final rule (the Final Rule) that provided guidance on the calculation of drug ceiling prices and the imposition of civil monetary penalties on certain drug manufacturers participating in the 340B Drug Pricing Program. Arent Fox’s Health Care Counsel Blog previously featured an analysis of the Final Rule, which can be found here

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Compliance Program Development & Counseling, Department of Justice Developments
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What the Department of Justice Expects in a Compliance Program

In early February, the Department of Justice’s Criminal Division, Fraud Section, published a document titled, Evaluation of Corporate Compliance Programs. A must-read for any person responsible for a compliance program, regardless of industry, the document identifies common questions that DOJ may ask when making individualized determinations about a compliance program’s effectiveness. Although DOJ points out that the publication is “neither a checklist nor a formula,” the document provides practical guidance to corporations (and their attorneys) about where DOJ will focus its compliance program inquiries. And although the publication applies only to the criminal division, it may be instructive in civil fraud matters as well.

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Office of Inspector General Developments, Prescription Drug Pricing & Government Price Reporting
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New OIG Drug Pricing and Reimbursement Portfolio Now Online

Have you been wondering what OIG has done regarding drug pricing and reimbursement since 2010? Today, OIG has made it easier to find out, posting a Drug Pricing and Reimbursement Web portfolio on its website. According to an OIG announcement, the portfolio “pulls together the HHS OIG’s body of work since 2010 as well as other relevant items that relate to drug pricing and reimbursement in HHS programs. The portfolio features planned work, completed reports, industry guidance, and enforcement actions.”  

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False Claims Act
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Recent Drug Company Settlement Highlights Unique Theory of False Claims Act Liability: Failure to Follow Current Good Manufacturing Practices

Last month, Baxter International Inc. and Baxter Healthcare Corporation (collectively “Baxter”) settled a qui tam False Claims Act (FCA) case with the Department of Justice (DOJ) for $18 million. The settlement is not monumental in terms of the amount, but does highlight the unique theory of FCA liability. The government alleged that Baxter submitted false claims for a drug sold to the Department of Veterans Affairs and Department of Defense, as well as reimbursed by the Medicare and Medicaid programs, because the drug was “adulterated,” given Baxter’s alleged violations of the Federal Food, Drug, and Cosmetic Act’s (FDCA) current good manufacturing practice (cGMP) requirements – but not because of any impact on the drug itself.

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Pharmaceutical & Device Compliance
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FDA Finalizes Guidance on Assessing New Drug Abuse Potential

Earlier this month, FDA finalized Guidance for Industry, Assessment of Abuse Potential of Drugs. This guidance is intended to assist researchers and sponsors of new drugs that may have central nervous system (CNS) activity evaluate whether the drug has abuse potential. It provides the agency’s recommendations for timing and design of abuse-related studies, the types of studies that should be included in an abuse potential assessment submitted as part of a new drug application (NDA), and provides general recommendations for consulting with FDA about abuse potential assessment during the drug development process.

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Medical Device Compliance, Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting
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The Secret's Out: FDA Allows Drug and Device Manufacturers to Share HCEI Prior to Product Approval

Last week, FDA issued a draft guidance, Drug and Device Manufacturer Communications with Payors, Formulary Committees, and Similar Entities – Questions and Answers, describing the Agency’s expectations for drug and device manufacturers’ communication of health care economic information (HCEI) about their products to payors, formulary committees, and “other similar entities with knowledge and expertise in the area of health care economic analysis.” What is most notable about this guidance is that FDA has taken the position that this type of information may be shared before a product has been approved. 

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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New Year…Same Rules? HHS Makes Few Changes in Recent 340B Drug Pricing Program Final Rule
The Health Resources and Services Administration, part of the Department of Health and Human Services, published a Final Rule on January 5, 2017 addressing how 340B covered outpatient drug “Ceiling Prices” are to be calculated under the 340B Drug Pricing Program, and how participating drug manufacturers may be subject to certain monetary penalties for violation of the 340B statute (the Final Rule). The provisions of the Final Rule are effective March 6, 2017, and HHS indicated that it will begin enforcing the requirements of the Final Rule at the beginning of the second quarter of 2017, meaning April 1, 2017. 
 
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Prescription Drug Pricing & Government Price Reporting
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340B Drug Pricing Program Ceiling Price Final Rule Released

The 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties final rule is scheduled to be published in the Federal Register on January 5, 2017. A link to the advance copy of the final rule can be accessed here. Arent Fox health care partner Stephanie Trunk and associate Erin Atkins will be publishing a detailed client alert soon, in which they will analyze the provisions of the final rule and how they impact 340B covered entities and participating drug manufacturers. Please stay tuned to the Health Care Counsel blog for further updates!  

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False Claims Act, Pharmaceutical & Device Compliance
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US Attorney Announces Kickback and False Claims Act Settlement with Device Manufacturer BioTelmetry/MedNet

The US Attorney’s Office for the District of New Jersey recently announced an agreement with BioTelemetry Inc. to settle allegations that its recently-acquired subsidiary, MedNet, Inc., violated the Anti-Kickback Statue and False Claims Act by improperly inducing health care providers to use the company’s cardiac monitoring services.  

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Prescription Drug Pricing & Government Price Reporting
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FDA issued a final version of Guidance for Industry, Contract Manufacturing Arrangements for Drugs: Quality Agreements

Last week, FDA issued a final version of Guidance for Industry, Contract Manufacturing Arrangements for Drugs: Quality Agreements, which is available here. In this document, FDA sets forth the Agency’s expectations for parties involved in contract drug manufacturing, specifically that they delineate—in written quality agreements—each party’s roles and responsibilities to ensure compliance with FDA’s current good manufacturing practice (CGMP) requirements. The guidance applies to commercial manufacturing of human and veterinary drugs, certain combination products, biological and biotechnology products, finished products, active pharmaceutical ingredients, excipients, in-process materials and drug constituents of combination drug/device products.

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Prescription Drug Pricing & Government Price Reporting
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FDA Announcement on Guidance for Industry, Generic Drug User Fee Amendments of 2012

On November 17, FDA announced that it had revised, and finalized in part, Guidance for Industry, Generic Drug User Fee Amendments of 2012: Questions and Answers Related to User Fee Assessments, available here

The revised guidance finalizes the section of the document that pertains to user fees. (Note that FDA announced GDUFA user fees for fiscal year 2017 for Abbreviated New Drug Applications, Prior Approval Supplements, Drug Master Files, and facilities earlier this year (81 Fed. Reg. 49,225, July 27, 2016).) Questions and answers related to self-identification, review of generic drug submissions, and inspections and compliance, which appeared in earlier versions of this GDUFA Q&A guidance, will be updated and addressed in a separately issued final guidance.  

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Prescription Drug Pricing & Government Price Reporting
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CMS Published the Covered Outpatient Drug Final Rule

On Monday, CMS issued a notice that, in effect, gives drug manufacturers a three-year reprieve to updating their systems to include sales in US territories in the AMP and Best Price. The government’s release about the changes that were published to Medicaid.gov can be found here.

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Prescription Drug Pricing & Government Price Reporting
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CMS Issues Proposed Notice Announcing Changes to NDRA

Today, CMS issued a notice announcing changes that would be made to the Medicaid National Drug Rebate Agreement (NDRA). The government’s release about the changes that were published to Medicaid.gov can be found here:

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Department of Justice Developments, False Claims Act, Payer Disputes & Reimbursement, Prescription Drug Pricing & Government Price Reporting
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Mylan Agrees to $465 Million Settlement with DOJ Over EpiPen Medicaid Drug Rebate Reporting Classification
Mylan recently announced a $465 million settlement with the US Department of Justice and other government agencies regarding the company’s covered outpatient drug (COD) classification of its EpiPen (and EpiPen, Jr.),  an epinephrine auto-injector, under the Medicaid Drug Rebate Program (MDRP).  

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Office of Inspector General Developments, Prescription Drug Pricing & Government Price Reporting, Product Coverage & Payment, Wholesaler & Pharmacy Benefits Compliance
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Is the Discount Safe Harbor No Longer “Safe?”

In a ruling that could, if adopted by other courts, expose all pharmaceutical discount and rebate arrangements to anti-kickback liability, on August 23, 2016, Judge Rya Zobel in the United States District Court for the District of Massachusetts denied Omnicare, Inc.’s motion for summary judgment in United States ex rel. Banigan v.

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Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.