Pharmaceutical company Organon Inc. agreed to pay $31 million to settle federal and state allegations that it underpaid Medicaid drug rebates, provided kickbacks to nursing home pharmacy companies, promoted its antidepressants for unapproved uses, and misrepresented its drug prices to state Medicaid programs. The settlement resolved two False Claims Act (FCA) qui tam whistleblower suits.
As we discussed here, the launch of the Centers for Medicare and Medicaid Services (CMS) Open Payments database on September 30, 2014 was met with a high level of criticism from industry, health care professionals, the media and other interested parties. One significant complaint was that the data was not easily searchable. Late last week, CMS provided a search tool option where users can search “identified data” for physicians, teaching hospitals, or companies using name, city, state or specialty. “Identified data” is data that (i) was matched by CMS to a single doctor or teaching hospital, and (ii) available for review and dispute for 45 days. However, as we previously discussed, a significant quantity of the data launched on September 30th was deidentified and, thus, not available using this search tool.
CMS also announced that applicable manufacturers and group purchasing organizations (GPOs) have until close of business on Friday, October 31st to make corrections to any 2013 Open Payments disputed records for publication this year. Although data corrections can be performed in the Open Payments system at any time, any corrective action taken by October 31st will be reflected in a refreshed data publication on or before December 31, 2014. Significantly, however, if a data correction results in a change to the covered recipient, any records are submitted to the Open Payments system for the first time, or any records currently on display are modified, the data will NOT be published as part of the December 31st data refresh because the data will not have undergone a review and dispute period.
On October 9, 2014, the Pharmaceutical Research & Manufacturers of America (“PhRMA”) filed a lawsuit seeking to enjoin the Health Resources Services Administration (“HRSA”) from implementing its July 23, 2014 “Interpretive Rule” regarding orphan drugs in the 340B Drug Discount Program (the “2014 Interpretive Rule”). PhRMA’s lawsuit alleges that the 2014 Interpretive Rule “violates the plain language of the statutory orphan drug exclusion” and should be invalidated as “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” The lawsuit is pending before the D.C. District Court.
On September 30, 2014, the U.S. Court of Appeals for the 9th Circuit unanimously upheld a lower court’s finding that a California county ordinance requiring prescription drug manufacturers to operate and finance certain drug disposal operations was constitutional. The plaintiffs-appellants in Pharm. Research & Mfrs. of Am v. County of Alameda (9th Cir., No. 3:12-cv-06203-RS) were comprised of the major pharmaceutical and biologic industry trade organizations in the United States. Specifically, the Pharmaceutical Research & Manufactures of America (“PhRMA”), the Generic Pharmaceutical Association (“GPhA”) and the Biotechnology Industry Organization (“BIO”) alleged that Alameda County, California’s “Safe Drug Disposal” ordinance unconstitutionally violated the Commerce Clause by requiring interstate drug manufacturers to conduct and pay for Alameda County’s drug disposal program. The 9th Circuit Court of Appeals disagreed, concluding:
“Opinions vary widely as to whether adoption of the Ordinance was a good idea. We leave that debate to other institutions and the public at large. We needed only to review the Ordinance and determine whether it violates the dormant Commerce Clause of the United States Constitution. We did; it does not.”
On October 1 the US Food and Drug Administration (FDA) issued final guidance regarding cybersecurity for medical devices. The FDA guidelines urge device manufacturers to include safety controls on devices to prevent cyber threats and recommend manufacturers outline the necessary steps that will be taken if their devices are found to be vulnerable to breaches. This guidance finalizes the draft guidance published last year published in response to the U.S. Department of Homeland Security’s warning about cyber-attacks on medical devices. Continue reading