Washington Legal Foundation hosted a Web Seminar program yesterday, Physician Payments in the “Sunshine”: Implications of CMS Regulations for Businesses and the Future of American Health Care.
Speakers James Stansel and Meenakshi Datta of Sidley Austin LLP delved into the complicated and often vague data collection and reporting mandates required under the Physician Payment Sunshine Act and the regulations promulgated to implement it. They paid particular attention to how the mandates will impact research and development of new drugs, biologics, and medical devices, processes where physicians play an integral role.
The program is available as an on-demand file by clicking on the title above.
Click here for the slides our speakers utilized.
During the program, it was mentioned that WLF would be filing comments with CMS on the First Amendment problems with the Sunshine Act rules failing to exempt the sharing of medical textbooks and chapters of textbooks with doctors and teaching hospitals. Those comments can be downloaded here.
After obtaining extension after extension from the U.S. Supreme Court (something our Rich Samp criticized here a few weeks ago), the time had come this week for the federal government to “fish or cut bait,” as it were, on whether it would urge reversal in one case involving the FDA’s graphic tobacco warnings, and oppose certiorari in another case.
As reported by several news outlets this morning, the Department of Justice announced that it would not seek Supreme Court review of the U.S. Court of Appeals for the D.C. Circuit’s R.J. Reynolds Tobacco Co. v. FDA decision. There, the court held in a facial challenge that the tobacco warnings violated the companies’ First Amendment rights. DOJ’s decision not to pursue reversal leaves in place a powerful precedent which businesses in other industries might deploy in situations where government labeling or warning requirements go beyond disclosure of pure, noncontroversial facts. The Washington Post story noted that FDA said it would “go back to the drawing board and ‘undertake research to support a new rulemaking consistent with the Tobacco Control Act.’” So that’s the end of the controversy for now, right?
Not necessarily. The government has until Friday to respond to a petition in the Supreme Court that it review another challenge to the graphic warnings, this one an “as applied” challenge rather than a “facial” challenge. The Sixth Circuit upheld the graphic warnings in American Snuff Co. v. United States. No doubt, the Solicitor General will argue that its decision not to appeal R.J. Reynolds Tobacco Co. obviates the need for the Court to grant certiorari in American Snuff. Will the justices take the government at its word that it now realizes the warnings can’t survive First Amendment scrutiny and that FDA will “go back to the drawing board”? If one were to look at the FDA web page on the graphic health warnings, one might question FDA’s interest in giving up the fight.
At the end of our post about New York City’s much lampooned ban on certain sugary drink delivery devices (based on size), NYC Department of Health Supersizes Government, Approves Sugary Beverage Ban, we proclaimed “Let the legal challenges begin.”
Of course, they were filed soon after the ban was approved. This afternoon, on the eve of the ban going into effect, a Supreme Court of New York judge held that the super-sized loopholes and exceptions in the health ordinance rendered it entirely arbitrary and capricious.
The ruling, courtesy of The Wall Street Journal, is here. The judge has enjoined the city from enforcing the ordinance. We look forward to closely reading the opinion and relating further thoughts here soon. Now that New York City residents don’t need to have both hands full with two 16 ounce drinks, they can hold their one 32 ounce drink in one hand and use their free hand to read the opinion as well.
by Kirsten V. Mayer and Douglas Hallward-Driemeier, Ropes & Gray LLP
Last month, the U.S. Court of Appeals for the Fourth Circuit reaffirmed that False Claims Act relators must plead presentment of a false claim with particularity. The decision in United States ex rel. Nathan v. Takeda Pharmaceuticals N.A. Inc. requires that relators proceeding under Section 3729(a)(1)(A) of the False Claims Act offer concrete details that plausibly allege—not just speculate—that actual presentment of a false claim occurred. By requiring that relators plead false claims with particularity, the Fourth Circuit strikes a blow against relators who would prefer simply to allege a fraudulent scheme and proceed directly to costly discovery. The holding should be particularly useful to defendants in “off-label” promotion cases, where relators often only speculate that ineligible claims were submitted for reimbursement to government-funded programs.
In Nathan, a Takeda sales manager alleged that Takeda’s Kapidex marketing caused false claims to be presented to the government in two main ways: (1) Takeda allegedly promoted Kapidex to rheumatologists, who do not typically treat patients with conditions that can be treated by Kapidex on-label; and (2) Takeda allegedly promoted Kapidex use at higher doses than FDA had approved.
Liability under Section 3729(a)(1)(A) requires that a defendant actually presented false claims to the government for payment. Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 789 (4th Cir. 1999). Nonetheless, the Nathan relator urged the Fourth Circuit to adopt a relaxed application of Rule 9(b) that would rely on inferring from an alleged “fraudulent scheme” that false claims essentially must have been presented to the government. In support, the relator pointed to a Fifth Circuit decision, United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180 (5th Cir. 2009). In Grubbs, the relator had alleged with detail that doctors fraudulently recorded medical services that were never performed, and the Fifth Circuit held that this satisfied Rule 9(b), even though the complaint did not provide specific allegations that those records caused the hospital’s billing system to present fraudulent clams to the government. Id. at 192. Continue reading
On Tuesday, February 12, WLF held its annual media briefing on the U.S. Supreme Court at its mid-term/winter break point. As we’ve traditionally done, the program focused largely on cases to which the Court has granted cert since the term commenced back on the First Monday of October. The program, which was moderated by former Attorney General Dick Thornburgh, can be viewed in its entirety, at readers’ leisure, by clicking here (if you don’t have Microsoft Silverlight installed on your computer, you will be prompted to do so before you can view).
Our speakers, Patricia Millett, Roy T. Englert, Jr., and Catherine E. Stetson, focused on cases arising in the areas of intellectual property, arbitration, antitrust, class actions, and federal preemption.
One theme that emerged from the discussion was how many of the cases the Court will address in the coming months are “follow-on” cases from recent past Supreme Court decisions. Ms. Stetson termed this phenomenon the “deja vu docket.” She and the other panelists drew the following lines between past and current cases:
We would humbly add two cases that the speakers did not directly address from the “first half” of the October 2012 term:
Cross-posted at WLF’s Forbes.com contributor page
During the last four years, the Food and Drug Administration has been a faithful ally of the plaintiffs’ bar, routinely opposing any suggestion that federal approval of a prescription drug preempts a state-law tort claim against the drug’s manufacturer. That’s why it came as surprise to some when last week the United States filed an amicus curiae brief urging the Supreme Court to rule in Mutual Pharmaceutical Co. v. Bartlett that federal law preempts design-defect claims against the manufacturer of a generic drug. The plaintiffs’ bar need not worry, however; the amicus brief set out a detailed roadmap that explained to plaintiffs how they can avoid preemption findings in all future cases. The roadmap was wholly gratuitous; it raised issues not presented by Bartlett, and its only apparent purpose was to help lawyers filing tort suits to draft complaints that could withstand preemption claims.
Plaintiffs already have a clear path for suing brand-name drug companies; the Supreme Court held in 2009’s Wyeth v. Levine that failure-to-warn claims against brand-name companies were not preempted, even though the warning language on product labeling has in all cases been explicitly approved by FDA. But tort suits against generic drug companies have been more difficult to maintain. Over the objections of FDA and the Solicitor General, the Supreme Court held in 2011’s PLIVA, Inc. v. Mensing that failure-to-warn claims against generic drug companies are preempted by federal law, primarily because generic companies have no authority to make unilateral changes to their product labels even if they come to believe that stronger safety warnings are warranted. Continue reading
by Matthew A. Reed, Sedgwick LLP
Mr. Reed is an associate in the firm’s Los Angeles office and author of a November 2012 WLF Legal Backgrounder, What’s The Implication? Courts And The Scope Of Implied Medical Device Preemption
The expansive view of Buckman implied preemption lost an important ally last week. In Stengel v. Medtronic Inc., — F.3d —, 2013 WL 106144 (9th Cir. Jan. 10, 2013), the en banc Ninth Circuit held, contrary to a previous ruling by its 3-judge panel, that Buckman v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001), did not impliedly preempt a state-law failure-to-warn claim predicated on alleged regulatory violations. The legal grounding for the court’s preemption analysis in reaching that conclusion is difficult to discern. The overarching message, however, is not: Buckman is now construed quite narrowly in the Ninth Circuit.
In Stengel, plaintiffs brought four state tort law claims involving Medtronic’s Class III, premarket-approved pain pump, alleging it had caused Richard Stengel’s paralysis. Medtronic moved to dismiss those claims as expressly preempted by the Medical Device Amendments (“MDA”) to the Food, Drug and Cosmetic Act (“FDCA”). While that motion was pending, the Stengels sought to amend their complaint by alleging that each cause of action was triggered by Medtronic’s failure to report injury information to the FDA, as required by FDA regulations. The district court granted Medtronic’s motion under Riegel v. Medtronic, Inc., 552 U.S. 312 (2008), because the original claims asserted violations of state tort law with no allegation that Medtronic violated FDA regulations, and thus the state claims were different from or additional to FDCA requirements. Conversely, it denied the Stengels’ motion to amend as a matter of law, because the new claims alleging regulatory violations were impliedly preempted under Buckman. Continue reading
Alabama Supreme Court
Anyone who watches ESPN or virtually any other cable show has likely seen advertisements from law firms recruiting clients who believe they suffer from tardive dyskinesia. Lawsuits against the makers of Reglan and its generic equivalent, the long-term use of which is alleged to cause this condition, have been a growth area for Litigation Inc. In fact, if one types “tardive dyskinesia” into a search engine, the first result is http://www.tardivedyskinesia.com/, a site which according to the small print at the bottom of the home page is sponsored by The Peterson Firm.
Lawyers representing alleged dyskinesia patients have argued for years that even if their clients were prescribed the generic version of Reglan, the brand name producer of the drug should be liable under either a product liability or misrepresentation theory for failing to warn of the drug’s long-term effects. Although a few federal and state courts have accepted the theory, they have heretofore been considered outliers.
On Friday in Wyeth v. Weeks, the Alabama Supreme Court, answering a question certified to it by the U.S. District Court for the Middle District of Alabama, ruled that under Alabama law, plaintiffs can sue a brand drug maker for its alleged failure to warn patients’ physicians of harmful side effects of the drug’s generic equivalent.
Six justices concurred with Justice Bolin’s opinion, with Justice Murdock’s dissent, according to the published majority opinion “to follow.”
While you await the dissent, we encourage you to read the “majority opinion” from Washington Legal Foundation’s court opinion-style On the Merits paper from last January, where Ropes & Gray partner Douglas Hallwell-Driemeier explained why the brand drug company’s arguments should prevail.
Off-Label Speech After U.S. v. Caronia: Implications for Drug & Device Regulation and the First Amendment, a Washington Legal Foundation Web Seminar program, is now available for on-demand viewing.
Our program featured analysis and commentary from Coleen Klasmeier of the Sidley Austin law firm and WLF’s Chief Counsel, Richard Samp. Coleen and Rich make reference to a Powerpoint slide deck, which due to a technical problem wasn’t available to viewers during the program. The slide deck can be downloaded here.
For her presentation, Coleen coined the term “Sorrellonia” because the U.S. Court of Appeals for the Second Circuit two-judge majority in Caronia became the first court to fully apply the holding and rationale of the U.S. Supreme Court’s 2011 Sorrell v. IMS Health opinion.
Coleen’s and Rich’s presentations drew upon their combined years of experience in dealing with FDA’s application of its off-label speech restrictions and the Justice Department’s prosecution of cases where criminal violations of those rules allegedly occurred.
While they both saw great promise in the opinion for greater freedom in the exchange of critical medical information, they also offered firm notes of caution that the ruling not be interpreted as a green light for businesses’ promotion of off-label uses. Great peril still exists in this area they warned, a fact that is all the more apparent today with the announcement of another nearly $1 billion Justice Department settlement with a pharmaceutical company.