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Shortly after Connecticut’s 2023 legislative session kicked off, Governor Ned Lamont announced a series of policy initiatives aimed at reducing health care costs and undertaken in collaboration with the Connecticut Hospital Association. “An Act Protecting Patients and Prohibiting Unnecessary Health Care Costs” (“the Act”), which was passed by the Connecticut Legislature in early June and signed into law by Governor Lamont in late June, implements some of those initiatives. Among other things, the Act targets pharmaceutical marketing practices and imposes extensive reporting requirements. These provisions apply to “pharmaceutical manufacturers” and come into effect on October 1, 2023.

Broadly, the provisions require “pharmaceutical manufacturers” that employ “pharmaceutical representatives” to register annually with the Department of Consumer Protection (“DCP”) as “pharmaceutical marketing firms” and provide annual reports to DCP containing various information about their employed “pharmaceutical representatives.” The provisions also require “pharmaceutical representatives” to disclose specific information to prescribing practitioners and pharmacists and provides DCP with the authority to impose penalties for non-compliance.

The nuance lives in the Act’s definitions, and several key questions remain open, including to what extent the Act applies to medical device and technology manufacturers.…

Continue Reading New Connecticut Law Targets Drug and Device Manufacturers who Employ Sales Representatives for Additional Scrutiny

The U.S. Court of Appeals for the Eighth Circuit recently weighed in on the causation standard for False Claims Act (“FCA”) cases premised on Anti-Kickback Statute (“AKS”) violations. United States ex rel. Cairns v. D.S. Med. LLC, 42 F.4th 828 (8th Cir. 2022). The panel adopted a strict interpretation, finding that the government or whistleblowers must show a “but-for” causal relationship between kickbacks and claims for payment to establish the requisite link in the FCA liability chain, creating a circuit split on an issue that courts have struggled with for years.

The decision is notable for FCA defendants as it offers support for a defense they have long asserted, and that courts have been reluctant to condone, including an opinion from the U.S. Court of Appeals for the Third Circuit that refused to require a direct causal link between an AKS violation and a false claim.…

Continue Reading Eighth Circuit Finds “But-For” Causation Standard for AKS-Premised FCA Cases

CMS recently issued updated Open Payments Frequently Asked Questions (FAQs). The FAQs are revised periodically to reflect the most up to date program requirements. This latest revision both added and removed FAQs, and also included some general edits.

The following FAQs were added: #2014, #2015, #2016, #2017, #2018, #2019, #2020, #2021 and #2022. Each new FAQ is reproduced in full below. They provide additional guidance regarding topics such as archived reporting years, salaries paid to covered recipients, reporting of device identifiers, valuing long-term device loans, debt forgiveness, and the definition of Nurse Practitioner.

Additionally, the following FAQs have been removed from the FAQ document “due to being no longer applicable, redundant with another FAQ, or of low utility” (according to CMS):…
Continue Reading CMS Issues Updated Open Payments FAQs

In November 2020, four months after the Trump Administration issued a series of Executive Orders reiterating its policy goals on reducing the costs to consumers for prescription drugs and directing the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”) to implement those policy objectives, HHS-OIG issued a Final Rule to amend certain provisions in the safe harbor regulations under the Federal Anti-Kickback Statute (“AKS”). The Final Rule included three key provisions:

  1. Elimination of discount safe harbor protection for manufacturer rebates paid directly, or indirectly through a pharmacy benefit manager (“PBM”) to Medicare Part D or Medicare Advantage plans (the “Rebate Rule”);
  2. Creation of a new safe harbor to protect point-of-sale (“POS”) price reductions paid by manufacturers to Medicare Part D plans, Medicare Advantage plans, and Medicaid managed care organizations (“MCOs”); and
  3. Creation of a new safe harbor to protect fair-market-value (FMV) service fees paid to PBMs by manufacturers.

The Final Rule imposed a January 1, 2022, effective date for the Rebate Rule. However, in January 2021, two months after issuance of the Final Rule and in connection to a lawsuit brought by the Pharmaceutical Care Management Association challenging the Rebate Rule, the Biden Administration agreed to delay the Rebate Rule’s effective date to January 1, 2023, as reflected in an Order by the United States District Court for the District of Columbia.

In the intervening time though, Congress passed the Infrastructure Investment and Jobs Act (the “Infrastructure Act”). That law, signed by President Biden on November 15, 2021, further delayed implementation of the Rebate Rule to January 2026. Thus the rule, which many thought would be eliminated as part of paying for the cost of the infrastructure bill, was still alive, if only delayed until the middle of the next presidential term.…

Continue Reading Future of discount safe harbor for prescription drugs remains uncertain

In recent years, the U.S. Department of Justice (“DOJ”) has increasingly leveraged data analytics to combat fraud. Principal Deputy Chief of DOJ’s Fraud Section, Joe Beemsterboer, described the department’s data-mining capabilities as the “foundation of how [DOJ] investigate[s] and analyze[s] cases,” and explained that digital forensics equips the department with “powerful” tools for identifying “trends,”…

On August 31, 2020, the Food and Drug Administration (FDA) issued draft guidance regarding principles for selecting, developing, modifying, and adapting patient-reported outcome instruments for use in medical device evaluation.[1]  Patient-reported outcome (PRO) instruments facilitate the systematic collection of how patients feel and function during a clinical trial.  FDA recognizes this information as important…

On June 17, the Food and Drug Administration (FDA) continued its efforts to mitigate COVID-19’s disrupting impact on clinical trials by issuing guidance on statistical considerations for changes to trial conduct (FDA previously relaxed restrictions on protocol modifications). As expected, public health measures designed to control COVID-19’s rapid emergence as a global pandemic—social distancing, travel…