Supreme Court Upholds Federal Exchange Tax Subsidies in King v. Burwell

Today, the Supreme Court issued its highly anticipated ruling in King v. Burwell.  The case questioned whether individuals who purchased health insurance through the federal marketplace were entitled to receive tax subsidies pursuant to the Patient Protection and Affordable Care Act (ACA), or whether such subsidies were reserved for individuals who purchased health insurance through state exchanges.  The Supreme Court ruled 6-3 that Americans who purchased insurance through the federal exchange could keep the tax subsidies that made their insurance more affordable.  Chief Justice John Roberts drafted the majority opinion.

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Filed under Health Reform, The Affordable Care Act

OIG Reports Targeting Medicare Part D Fraud Issued on the Heels of National Medicare Fraud Sweep

The Health and Human Services (HHS) Office of Inspector General (OIG) released two reports yesterday related to Medicare Part D fraud. The OIG report, Ensuring the Integrity of Medicare Part D, “synthesizes numerous OIG reports that have identified weaknesses in Part D program integrity, and provides updates on Departmental efforts to address these weaknesses.” The report also identifies a number of recommendations made in previous reports that the Centers for Medicare & Medicaid Services (CMS) has not yet implemented, and encourages CMS to do so in order to protect the Part D program from fraud, waste and abuse.

The second OIG report, Questionable Billing and Geographic Hotspots Point to Potential Fraud and Abuse in Medicare Part D, summarizes OIG reviews that have revealed questionable billing associated with pharmacies, prescribers, and beneficiaries involving controlled and noncontrolled substances. These reviews were conducted because of the OIG’s ongoing concerns regarding abuse and diversion of Part D drugs. Notably, the report concluded that more than 1,400 pharmacies had questionable billing for Part D drugs in 2014 that “warrant further scrutiny.” Additionally, “geographic hot spots” for certain drugs in Los Angeles, CA; McAllen, TX; Miami, FL; New York, NY; and San Juan, PR suggest potential fraud and abuse.

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Filed under Fraud and Abuse, Government Enforcement, OIG Guidance

FDA Launches New REMS Website

The U.S. Food and Drug Administration (FDA) launched this week REMS@FDA, a Risk Evaluation and Mitigation Strategy (REMS) database website. The new, user-friendly website contains a table of all currently approved individual and shared REMS, as well as a link to historical REMS. The table provides an at-a-glance overview of elements included in each REMS and links to detailed pages for the REMS. All REMS materials are downloadable in PDF format.

The Food and Drug Administration Amendments Act of 2007 granted the FDA the authority to require REMS from drug and biologics manufacturers for products to ensure that any serious risks are outweighed by its benefits. REMS requirements can impose special duties on manufacturers, wholesalers, pharmacists, physicians, and/or patients. Failure to comply with a REMS potentially has significant legal consequences and patient safety implications.

This blog post was co-authored by Amy Westergren, a 2015 summer associate in Cooley’s New York office.

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Congress Takes Step Towards Scrapping Device Tax

Yesterday, the House of Representatives voted 280-140 to pass H.R. 160, a bill that eliminates the 2.3 percent medical device tax. The vote was strongly bipartisan with 46 Democrats joining all Republicans voting in favor of scrapping the tax. The vote came amid the threat of a veto from the White House, citing the bill’s cost of $24 billion over ten years, among other reasons.

The size and margin of yesterday’s vote has two potentially significant impacts. First, securing 280 “yes” votes is close to the amount necessary to override a Presidential veto. Second, the broad support in the House could give repeal proponents in the Senate hope that they can move a bill with similar bipartisan (and veto-proof) support. Recall that the Senate passed a non-binding proposal in 2013 with a veto-proof majority backed by 34 Democrats. Majority Leader Mitch McConnell (R-KY) has repeatedly stated that device tax repeal is a priority and the ball is firmly in his court to make the next move.

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Filed under Health Care, Health IT, The Affordable Care Act

HIPAA FAQ Series: Does HIPAA Protect the PHI of Deceased Individuals?

In order to protect the privacy and security of patients’ information, the Health Insurance Portability and Accountability Act (HIPAA) imposes substantial obligations on covered entities (certain providers, plans, and health care clearinghouses), as well as their business associates.  These obligations can be intrusive and costly, and can require substantial investments in electronic systems and personnel.  Thus, many covered entities ask – when do these obligations terminate?  Specifically, are covered entities still required to safeguard the Protected Health Information (PHI) of deceased individuals?

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Filed under Health Information Privacy, HIPAA, HIPAA FAQ, Privacy and Security

General Wellness Products: Will the FDA Regulate Your Medical App or Device?

FDA General Wellness Banner

In January 2015, the U.S. Food and Drug Administration (FDA) released its draft guidance on general wellness products, a reassuring indication that the FDA will focus its efforts on regulating higher risk products rather than products that present a low risk to users. Cooley recently collaborated with Worrell to develop the algorithm below to help companies determine whether their product may qualify as a general wellness product.

In its draft guidance, the FDA states that it will not regulate general wellness products that:
  1. Are intended only for general use, and
  2. Present a very low risk to users’ safety.

According to the FDA’s definition, a “general wellness product” has:

  1. An intended use that relates to maintaining or encouraging a general state of health or a healthy lifestyle, or
  2. An intended use claim that associates the role of healthy lifestyle with helping to reduce the risk or impact of certain chronic diseases or conditions, where it is well understood and accepted that healthy lifestyle choices may play an important role in health outcomes for the disease or condition.

In other words, if your product’s intended use is not limited to the above general wellness intended uses and it does not present a very low risk to users’ safety, the product is outside the FDA’s scope of guidance related to general wellness products.

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Filed under FDA Draft Guidance, Health IT, Medical Devices

Case to Watch: Amarin Pharma v. FDA

Watch list

A potentially significant case being watched by the pharmaceutical industry is Amarin Pharma, et al., v. U.S. Food and Drug Administration, et al., Civ. A. 15-cv-3588 (S.D.N.Y.). The complaint, filed in May 2015, is a “First Amendment challenge to FDA regulations that prohibit Amarin, a pharmaceutical company, from making completely truthful and non-misleading statements about its product to sophisticated healthcare professionals” (HCPs), including the HCP plaintiffs. Although Amarin’s drug Vascepa® is FDA-approved to treat adult patients with severe hypertriglyceridemia, the FDA recently denied Amarin’s supplemental new drug application (sNDA) to expand the Vascepa indication to include patients with high triglycerides, consistent with the patient population in its ANCHOR clinical trial. Citing United States v. Caronia, 703 F.3d 149 (2d Cir. 2012), Amarin is asking the Court to “hold that FDA’s prohibitions on ‘off-label’ promotion, as applied to the truthful and non-misleading speech Amarin wishes to make, are unconstitutional under the First Amendment, and to declare that Amarin may engage in its proposed speech about Vascepa.”

In an interesting move, on June 8, 2015, the FDA filed with the Court a letter that it issued to Amarin on June 5, 2015, which states that the “FDA does not have concerns with much of the information that you proposed to communicate.” The letter further notes that Amarin did not discuss the matter with the FDA prior to filings it complaint, “as other pharmaceutical companies do”, nor during its discussions with the FDA over many years related to the labeling of Vascepa. The FDA also states that it currently is engaged in a  “comprehensive review of its regulations and guidance documents” related to the dissemination of production information and that “new guidance will be forthcoming.”

It appears that the FDA’s letter was a pre-emptive move to undermine Amarin’s lawsuit. We will continue to watch this important case.

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Filed under FDA, Litigation


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