“Common Rule” Overhaul Proposed – Intended to Modernize Human Research Subject Protections

On September 2, 2015, sixteen federal agencies and departments jointly issued a Notice of Proposed Rulemaking (“the NPRM”), designed to “modernize, strengthen, and make more effective” the so-called “Common Rule”.  The Common Rule is a uniform federal policy for the Protection of Human Subjects, originally issued in 1991. The U.S. agencies and departments adopting the Common Rule generally agree to the same set of basic protections to be applicable to human subject research activities they will conduct or support, but adopt such protections within their own applicable regulations. The NPRM is expected to appear in the September 8, 2015, issue of the Federal Register, and to be open for public comment through December 7, 2015.

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Filed under Clinical Trials, Compliance, FDA, Health Care

HRSA 340B Drug Discount Program “Omnibus” Regulation Published – Comment Period Open Until October 27, 2015

On Friday, August 28, 2015, the U.S. Department of Health and Human Services (HHS) Health Resources and Services Administration (HRSA) proposed its long-awaited “Omnibus” regulation for the 340B Drug Discount Program in the Federal Register (the “Proposed Rule”).  The 340B Drug Discount Program is the program by which drug and biologic manufacturers are generally required to offer their products at potentially steeply discounted prices to certain purchasers, generally “safety net” entities such as certain hospitals (called “covered entities”).  Public comments on the Proposed Rule will be accepted by HRSA until October 27, 2015.  Pharmaceutical and hospital industry stakeholders are encouraged to review the proposals carefully to evaluate whether there are areas of particular concern. Continue reading

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Filed under 340B, Compliance, Coverage and Reimbursement, Government Pricing, Health Care

HHS OIG Approves Drug Company Program Providing Free Cancer Treatment Drugs

On Tuesday, the Health and Human Services (HHS) Office of Inspector General (OIG) issued an Advisory Opinion regarding a program to provide a 30-day supply of cancer drugs free of costs to patients who experience an insurance coverage determination delay of at least five business days (the Free Supply Program).  The OIG concluded that although the Free Supply Program could potentially generate prohibited remuneration under the federal health care program anti-kickback statute (AKS) (42 U.S.C. 1320a-7b(b), the OIG would not impose administrative sanctions against the two requestors, pharmaceutical companies that co-promote the drug, in connection with this arrangement.

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Filed under Advisory Opinions, OIG Guidance

Kim Kardashian Drug Endorsement Results in FDA Warning Letter

The U.S. Food and Drug Administration (FDA) Office of Prescription Drug Promotion (OPDP) issued a Warning Letter this week to Duchesnay, Inc. related to celebrity Kim Kardashian’s social media posts on Instagram, Twitter and Facebook regarding the company’s drug, DICLEGIS. In the posts, Kardashian states that she is “partnering with Duchesnay USA to raise awareness about treating morning sickness.” The matter came to OPDP’s attention through a submission to the FDA’s Bad Ad Program, which provides a mechanism for health care providers to report potentially problematic drug advertising.

OPDP determined that the Kardashian social media posts were misleading because they (i) present various efficacy claims for DICLEGIS without communicating any risk information; and (ii) fail to provide material information regarding the drug’s full approved indication and important limitations of use. OPDP requested that Duchesnay provide a response to the Warning Letter by August 21, 2015, including a plan for discontinuing the use of these materials and a “comprehensive plan of action to disseminate truthful, non-misleading, and complete corrective messages” to the audiences that received these materials using, to the extent possible, the same media for the same duration of time and frequency as the material disseminated.

This is not the first OPDP letter related to a celebrity endorsement on social media. OPDP also has issued a number of letters related to the use of social media generally, including metatags, Facebook pages, and Facebook ‘share’ features. These letters provide important direction to life sciences companies regarding the review and approval of endorsements and promotional information distributed through social media channels.

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Filed under FDA Enforcement, Social Media

First Court Decision Interpreting the Overpayment Rule Issued This Week

Earlier this week, a key decision denying defendants’ motion to dismiss was issued in the case, Kane v. Healthfirst Inc., et al. and United States v. Continuum Health Partners Inc., et al. (case no. 1:11-cv-02325, S.D.N.Y.). This is the first court decision to interpret a provision of the Affordable Care Act that requires a person who has received an overpayment of Medicare or Medicaid funds to report and return the overpayment by the later of: (i) 60 days after the date on which the overpayment was “identified”; or (ii) the date any corresponding cost report is due, if applicable. 42 U.S.C. § 1320a-7k(d). Although the Centers for Medicare and Medicaid Services (CMS) issued a Proposed Rule in 2014 related to the process for reporting and returning overpayments, the deadline for issuing the Final Rule has been extended  until February 2016.

In Kane, the relator was a former employee of the company who allegedly provided to management a spreadsheet of over 900 potential overpayments caused by a software glitch. The employee was fired four days later and the company failed to return all of the overpayments due until it subsequently received a civil investigative demand in connection with the qui tam lawsuit that had been filed by the former employee under the False Claims Act (FCA). The Court determined that defining “identified”, and thus starting the 60-day clock, when a “provider is put on notice of a potential overpayment, rather than the moment when an overpayment is conclusively ascertained”, is consistent with FCA legislative history.  The Court further stated that the defendants’ position that its obligation to pay would not be triggered until after it had “done the work necessary to determine conclusively the precise amount owed to the Government”, thereby “relegating the sixty-day period to merely the time within which they would have to cut the check”, would create an “absurd result.”

We will continue to monitor this important case and provide significant updates. 


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Filed under Fraud and Abuse, Government Enforcement, Health Reform

Significant Court Decision Issued Today re: Off-Label Promotion

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A highly anticipated decision was issued today in the U.S. District Court for the Southern District of New York in the case, Amarin Pharma Inc. et al. v. Food and Drug Administration et al. (case no. 1:15-cv-03588). See this blog post for additional background on the case.

In a detailed 69-page decision, the Court granted Amarin’s motion for a preliminary injunction, holding that the statements and disclosures proposed by Amarin are truthful and not misleading, and thus may not form the basis for a prosecution based on misbranding. Relying heavily on United States v. Caronia in its analysis, the Court stated that “Amarin has established a substantial likelihood of success on the merits” related to its “First Amendment right to be free from a misbranding action based on truthful speech promoting the off-label use of an FDA-approved drug.” However, the Court makes it clear that Caronia “leaves room for prosecuting off-label marketing as misbranding”, such as situations were a manufacturer uses false or misleading commercial communications or engages in “non-communicative activities” to promote an off-label use.

We will continue to monitor this important case and report significant developments. 

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Court Holds Corporate Integrity Agreement May Be Basis for Reverse False Claim Liability

This week, a federal district court denied Cephalon Inc.’s (Cephalon) motion to dismiss a third amended complaint filed under the False Claims Act (FCA) by three qui tam relators in United States ex rel. Boise v. Cephalon, Inc. The motion to dismiss relates to claims made by the whistleblowers under 31 U.S.C.§ 3729(a)(1)(G) (“. . . knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government . . .”). Specifically, the relators allege that Cephalon promoted its drugs Provigil and Nuvigil for off-label purposes and paid unlawful kickbacks to health care professionals, and failed to report this conduct in violation of its 2008 corporate integrity agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (OIG).

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Filed under Corporate Compliance, Fraud and Abuse