Category: Blog Posts

Former Drug CEO Could Face Life Sentence for Allegedly Defrauding the DEA

Maddie Gilmore, Class of 2023, Belmont Law.

Laurence F. Doud III, former head of Rochester Drug Co-Operative Inc., could very easily face life in prison for his role in conspiring to distribute controlled substances and defrauding the DEA. A Florida jury convicted Doud of one count of conspiracy to distribute controlled substances, carrying a mandatory minimum sentence of ten years, and one count of conspiracy to defraud the United States. Doud is scheduled to be sentenced on June 29, 2022.

Doud allegedly engaged in a variety of misconduct that contributed to the growing opioid epidemic in his role as CEO of Rochester. The U.S. Attorney Damian Williams said: “In a first of its kind prosecution, Laurence Doud was held responsible for conspiring with others in his company to ship massive amounts of dangerous and highly-addictive oxycodone and fentanyl to pharmacies that he knew were illegally dispensing those controlled substances to drug dealers and addicts.”

At the direction of Doud, the company supplied large quantities of oxycodone, fentanyl, and other dangerous opioids to pharmacy customers that its own compliance personnel determined were dispensing those drugs to individuals who had no legitimate medical need for them. Even after “red flags” of the targeted pharmacies were brought to Doud’s attention, the violation of federal narcotics laws continued. The targeted pharmacies, among other things, dispensed quantities of controlled substances in amounts consistently higher than accepted medical standards.

Instead of reporting such findings to the DEA, Doud directed the company’s compliance department not to report them, and instead to continue supplying those customers with dangerous controlled substances that the company knew were being dispensed and used for illicit purposes. This was the basis of the conspiracy charge.

The evidence presented that resulted in Doud’s conviction is an unambiguous example of drug company higher-ups taking advantage and seeking financial gain at the expense of the country and in the midst of an opioid crisis that people like Doud and companies like Rochester contributed to. Yet, defenders of Doud and others in the pharmaceutical industry have found the action against Doud excessive. They claim that by setting this precedent, the action will expose executives to liability and thereby deter companies from pursuing innovative medications. Indeed, some claim there is no basis for enforcing the DEA’s administrative requirements to individuals instead of companies as a whole.

Harry Nelson, founding partner at life sciences firm Nelson Hardiman LLP, said: “Drug distributors, like pharmacies and physicians, have been beaten into submission. I find the effort to paint Doud as a villain is over the top.”

These arguments are unfounded. This lawsuit, although the first of its kind, is not removing the liability shield that would normally fall on the company rather than the individual on mere whim to shift the responsibility. Rather, it is shifting responsibility based on the evidence. The individual, Doud, in this case is the proper target for the noncompliance of administrative regulations, because he in his individual capacity is responsible for much of the harm that occurred here. He directed Rochester to “supply tens of millions of oxycodone, fentanyl, and other dangerous opioids to pharmacy customers that its own compliance personnel determined, and reported to Doud, were dispensing those drugs to individuals who had no legitimate medical need for them,” according to the complaint. Furthermore, the arguments that this will deter ‘necessary opioid innovation research’ is also unsupported, as recognized by legal experts in the field.

The impact on research and development of drugs will not be impacted by Doud’s criminal sentence. Big pharma will not be deterred from continuing the race to discover and develop new marketable drugs. Neither will curing the way we prescribe them. Enforcing correct and medically appropriate prescribing of medications is not going to have any impact on research and development. Furthermore, it is already prescribed by law, so it is in the pharmaceutical industry’s best interest to ensure that patients are given access only to necessary medication and are taking those medications appropriately.

The “intentional malfeasance” committed by Doud is not simply the latest CEO taking the bullet for an industry created practice, but rather the appropriate recognition that, with power, comes responsibility. Doud would not have been able to cause the harm without using the corporate scheme as well as his authority to continue distributing addictive substances in mass amounts and in violation of the law.

Works Cited:

https://www.justice.gov/usao-sdny/pr/laurence-doud-former-ceo-pharmaceutical-distributor-convicted-conspiring-distribute

https://news.bloomberglaw.com/health-law-and-business/ex-drug-ceos-criminal-trial-raises-stakes-for-opioid-producers

The Potential Cost of Medical Price Transparency

David Brust, Class of 2022, Belmont Law

In recent years, the call for price transparency for medical care has increased. People often go to the doctor for non-routine medical care with no idea what it could end up costing them. In response to this, Congress passed the No Surprises Act which “protects people covered under group and individual health plans from receiving surprise medical bills when they receive most emergency services, non-emergency services from out-of-network providers at in-network facilities, and services from out-of-network air ambulance service providers.” The Act also sets up an independent dispute resolution process for different kinds of disputes, including those for self-pay and uninsured patients who receive a final bill that is “substantially greater” (defined as $400) than the good faith estimate they received from the provider. Patients have 120 days to file a dispute.

The Act went into effect on January 1, 2022, and since then some providers have already voiced their concerns about staying in compliance with the Act. One of these groups is mental and behavioral health providers. Recently, a group of various mental and behavioral health providers sent a letter to the Secretary and the US Department of Health & Human Services asking for an exemption from the Good Faith Estimate requirement. The providers state that while they agree with the overall goal of the Act, the Good Faith Estimate (“GFE”) requirement places a unique burden on them. The Good Faith Estimate requirements mandates that medical professionals give patients a cost estimate that includes a diagnosis and “information about the length and costs involved in a typical course of treatment.” Mental and behavioral health providers state that they are already bound by professional ethics to be up front about the costs of treatment. However, the providers are concerned that the diagnosis requirement of the GFE will in turn limit the care of their patients. They claim that mental health is a continuum and a diagnosis can take time and eventually change due to various factors. Thus, they are concerned that by having to give a diagnosis on the GFE, a patient’s insurer may limit coverage only to the diagnosis given on the GFE despite the diagnosis changing over time. This could ultimately hurt the patient and keep the provider from fully treating a patient. Therefore, it will be interesting to see whether the exemption is granted.

Overall, the goal of the No Surprises Act is to provide patients with an estimate of the cost of their medical care in most situations. However, in the first month of the Act being in effect, some providers have begun to express concerns about how the Act will impact their ability to provide the best care they can. So far mental and behavioral health providers have asked for an exemption, and it is likely other groups of providers will follow. At this time, it is unclear whether these providers will be granted an exemption, however until that happens, they must comply with the law as it currently stands.

Works Cited:

https://www.cms.gov/newsroom/fact-sheets/no-surprises-understand-your-rights-against-surprise-medical-bills

https://www.fiercehealthcare.com/providers/mental-health-therapists-seek-exemption-part-law-ban-surprise-billing

https://www.apaservices.org/advocacy/no-surprises-act-letter.pdf

TEFCA Goes Live

Will Brandt, Class of 2022, Belmont Law

After five years of work, the Office of the National Coordinator of Health (ONC) has released the Trusted Exchange Framework and Common Agreement (TEFCA). TEFCA is essentially a plan for an interoperability framework between healthcare information networks that was mandated by the Twenty First Century Cures Act of 2016. The purpose of this mandate was to create a network where patients have better access to their electronic healthcare information (EHI).

The problem that inspired TEFCA was that many hospital systems and medical providers use multiple different healthcare information networks (HINs) to store EHI. What this means for patients seeking access to their EHI unnecessary delays and expense when attempting to access their data. The promise of TEFCA was a network where HINs could become qualified HINs and the data that one HIN stores will be interoperable with other HINs. However, as Rebecca Pfifer points out in her article, The future of ONC’s interoperability framework hinges on adoption. But the agency — and industry — is optimistic, there is generally a lack of incentive for most HINs to participate in the ONC’s plane for healthcare information interoperability.

The primary issue is the business model that currently exists for HINs. HINs make money by storing EHI and providing access to that EHI to patients through medical providers. By winning the business of more healthcare providers and hospital systems, HINs gain more business and can make more money. By participating in TEFCA, an HIN, that becomes a qualified HIN, merely becomes qualified to share their business (stored EHI) with other businesses. Although the many revisions of TEFCA seem to provide a robust method of interoperability, the plan lacks any fundamental business incentive for HINs to participate. However, the industry is optimistic that adoption will come to fruition.

So, what is the value proposition of HINs to participate? Lee Barrett, CEO of EHR standards development organization EHNAC, supports the ONCs position that not participating will be a competitive disadvantage. He says, “The hope is that the more networks use it, the more its value proposition will be proved. Patients will inquire why their provider doesn’t have their data from other facilities, and the provider will then wonder why the exchanges it’s a participant in aren’t qualified to work with other networks.” Essentially, the argument supporting the notion that HINs will choose to participate is that patients seeking their EHI at an HIN who are not yet participating, will not only be aware of the option for HINs to participate, but will make the inquiry to their provider about why they don’t have access their healthcare date from another provider. Moreover, the argument is that these inquiries will put enough pressure on providers to switch to a qualified HIN, that providers will bear the cost and time that it takes to switch from a HIN to a qualified HIN. Will this bottom-up pressure be enough?

Works Cited:

https://www.fiercehealthcare.com/tech/hhs-hits-major-interoperability-milestone-as-tefca-goes-live-to-advance-health-data-sharing

https://www.healthcaredive.com/news/oncs-interoperability-framework-adoption-tefca/617391/

https://onlinemasters.ohio.edu/blog/health-information-systems/

Giving Americans Better Access to At-Home COVID-19 Testing

David Brust, Class of 2022, Belmont Law

On January 10, 2022, the Biden Administration announced starting January 15, 2022, private insurance companies are required to cover eight at-home COVID-19 tests per month per individual. While an individual may have to pay up front for the tests, their insurer will be required to reimburse them if a claim is submitted. This rule was made pursuant to §6001 of the Families First Coronavirus Response Act and covers only the eight over the counter tests that are currently FDA approved. This new rule will help to ensure that Americans can afford to obtain an at-home test, so long as they are able to find one.

In the first nine days of insurers covering at-home tests, it has come to light that one major insurer of many at risks individuals is not included in the new rule. This insurer is Medicare.  Medicare is not permitted by law to pay for self-administered diagnostic tests such as rapid at-home COVID-19 tests. This is concerning as there are 62 million Medicare beneficiaries and older people who are considered more at risk if they catch COVID-19. However, if a Medicare beneficiary wants a free at-home test, they can find one a couple of ways. First, people covered by Medicare Advantage, which is more akin to traditional insurance, may have their over-the-counter test covered by their insurance. Additionally, Medicare covers one rapid antigen test or PCR test done by a lab per year. Once that test is exhausted or if the beneficiary does not want to see a doctor, the beneficiary can visit COVIDtests.gov and order a free at-home test. COVIDtests.gov was recently launched after the Biden Administration purchased 500 million at-home tests to deliver to Americans at their homes free of charge. Each individual is limited to four free tests per month. The administration hopes to purchase another 500 million tests. Lastly, Medicare beneficiaries can visit a local community health center or a Medicare-certified health clinic to obtain one of the 50 million tests the federal government has provided these facilities.

Overall, the new rule will give Americans greater access to at-home COVID-19 tests so long as the tests can be kept in stock. Additionally, every American and, most importantly, those who are uninsured or have traditional Medicare can still obtain free tests at COVIDtests.gov.

Works Cited:

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-51.pdf

https://www.hhs.gov/about/news/2022/01/10/biden-harris-administration-requires-insurance-companies-group-health-plans-to-cover-cost-at-home-covid-19-tests-increasing-access-free-tests.html

https://www.npr.org/sections/health-shots/2022/01/24/1074964627/seniors-are-at-high-risk-of-covid-but-medicare-doesnt-pay-for-rapid-tests

Does OSHA Lack Authority to Impose a Vaccine Mandate?

Maddie Gilmore, Class of 2023, Belmont Law

On January 13th, the Supreme Court stopped the Biden administration’s push to enact its policy of encouraging vaccine use through a mandate that would apply to 84.2 million employees to get vaccinated or “obtain a medical test each week at their own expense and on their own time and wear a mask each workday.”  While the Court is allowing the administration to continue to impose a vaccine requirement on most U.S. health care workers, the opinion is sharply worded to emphasize that this is outside the scope of OSHA’s domain and is unprecedented.

Some key aspects of the original mandate highlight that this was less about health and safety, and more about imposing the Biden administration’s executive policies. Health and safety, no doubt, are at play behind both the mandate and the administration’s policies, however the sweeping nature of the mandate is unprecedented, which is exactly how the Supreme Court in its recent opinion justified continuing delay of enforcement. Employees would face a choice, vaccines or weekly testing and masks. Arguably masks at work while most of the workforce is vaccinated and unmasked, serve as a mark of segregation as to certain political leanings. You might as well have to wear a sticker that indicates to co-workers your political feelings about the vaccine and the Biden administration’s policies. While it might not feel like a coercive choice to some, to others, it is a closely guarded and sincerely held belief.

Furthermore, the employers are duty-bound to enforce this requirement. The penalty on employers for failing to do so is up to $13,653 for a standard violation, and up to $136,532 for a willful one. 29 CFR §1903.15(d) (2021). The mandate preempts contrary state laws. Neither OSHA nor Congress has ever imposed a mandate this broad. To justify the mandate and avoid notice-and comment procedures, OSHA invoked its “emergency temporary standards.” Although the standards take immediate effect, they are only permissible if the Secretary shows (1) that employees are exposed to grave danger from exposure to substances or agents determined to be toxic or physically harmful or from new hazards,” and (2) that the “emergency standard is necessary to protect employees from such danger.” This has only been invoked by the agency nine times, and of the six times the standards were challenged in court, only one was upheld.

In addition to the mandate being so broad as to cover 84.2 million employees, the exceptions are limited to foreclose exempting workers who pose a significantly lower risk of transmission. For example, there is an exception for workers who work outside. However, the wording of the exceptions is too limited and only exempt outside workers if they spend 100 percent of their time outside. The Secretary has estimated, for example, that only nine percent of landscapers and groundskeepers qualify as working exclusively outside.

The combination of the controversial politics behind the mandate, the unprecedented and general scope of the authority claimed by OSHA to impose such a mandate, as well as the limited exceptions and broad reach of the mandate are all reasons cited by the Supreme Court in their finding that those challenging the mandate are extremely “likely to succeed on the merits of their claim that the Secretary lacked authority to impose the mandate.”

However, instead of resting its decision solely on precedent and politics, the Supreme Court in large part reasoned that the risks of COVID-19 are not a workplace-specific threat. The Court emphasized that OSHA’s responsibilities are limited to correcting overly hazardous workplace conditions and implementing protocols to combat health and safety dangers that specifically emanate from the workplace. What effect this will have on OSHA’s latitude in future cases remains to be seen. Creative administrative lawyers might use this as precedent to further constrain OSHA’s ability to implement certain unpopular health and safety protocols.

Works Cited:

https://www.supremecourt.gov/opinions/21pdf/21a244_hgci.pdf

https://apnews.com/article/supreme-court-vaccine-mandate-eb5899ae1fe5b62b6f4d51f54a3cd375?utm_campaign=SocialFlow&utm_medium=AP&utm_source=Twitter

Congressional Clarification: Why We Shouldn’t Be Afraid to Ask Congress What it Meant

Maddie Gilmore, Belmont Law, Class of 2023

Congress sets up control-and-demand agencies to carry out its legislative schemes. The typical structure of a federal agency is laid out by Congress. When Congress passes a statute that sets up an agency, called an Enabling Act, drafters try to include the various enforcement powers that they intend for the agency to have. Under the APA, regulated entities have the right to sue an agency for taking an action that is outside the scope of this delegated enforcement power or for taking an action that is procedurally deficient. For a judge to determine this, Congress’ intent must be clearly discernible. That is, when a regulated party does sue under the APA, a federal judge will have no way to tell whether the agency took an action within its power or outside its power, unless Congress makes it clear.

The Health Resources and Services Administration, (“HRSA”), is a federal regulatory agency with broad powers under its enabling act to regulate pharmaceutical companies. In a recent lawsuit filed by six regulated drug-makers under the APA, a federal judge faced this exact dilemma.

The HRSA has the authority to issue opinion letters, warnings, and interpretive statements that are non-binding, but announce the agency’s intent and what they expect drug companies to comply with. One of these areas in which the HRSA was attempting to enforce compliance was allowing contract pharmacies unrestricted access to discounted drugs under the 340B program. The HRSA issued a series of warning letters, expecting compliance, but six drug companies did not act as swiftly or as definitively as HRSA would have liked. Finding that these companies refused to offer discounted drugs under the 340B program to contract pharmacies, the Biden administration initiated a lawsuit. The complaint alleged instead of competing as they should, the companies colluded “together to boost their profits by coordinating to retract a long-standing discount for safety-net hospitals and clinics.” Eli Lilly, Sanofi, AstraZeneca, Novartis, Novo Nordisk, and United Therapeutics, however, are taking a firm stance against the government’s position and whether the companies can be faced with a fine of $5,000 for each violation.

A federal judge, Sarah Evans Barker, found that the HRSA did have the authority to decide that drug companies cannot unilaterally restrict sales of products discounted under the 340B program to contract pharmacies. She did, however, hand the companies a conditional win, in finding that the HRSA did not have any ground for penalizing the drug companies for noncompliance and denied HRSA’s motion to dismiss. Specifically, she found the December advisory opinion from The Department of Health and Human Services (“HHS”) Office of the General Counsel and a May enforcement letter from the HRSA were “arbitrary and capricious” and in violation of the Administrative Procedures Act. In a difficult decision, Barker said the letters had an unfair element of surprise, and Congress’ intent being so unclear must be remanded. After ruling that the HRSA warning letters should be vacated because HHS has suddenly changed its views over whether to clamp down on the drug-maker restrictions, she specifically asked for Congress to to step in and settle the issue via new legislation. Bipartisan lawmakers have asked HHS to quash the drug-maker moves but so far legislation has not been introduced to make a fix.

The body of law governing regulatory agencies, including the APA itself, is complex and is predicated upon the ability of judges to discern Congress’ intent on how and when to let agencies handle certain issues. Because Congress’ intent is often indiscernible, the results are often mixed, and are non-uniform rulings. It is good to see that Barker, in the face of uncertainty, is asking for Congressional clarification instead of allowing the agency’s policies to change with the courses of the wind. Too much change means the companies do not have fair notice of the possibility of penalties. This uncertainty on the restrictions of 340B is exacerbated by the change in presidential administration, which is why it is important that Barker is asking for Congressional input. She is helping to curb at least some of the non-uniformity that regulated entities face constantly in this realm of administrative law.

Works Cited:

https://www.fiercehealthcare.com/hospitals/drug-makers-get-mixed-bag-lawsuit-rulings-over-340b-contract-pharmacy-moves

https://www.fiercehealthcare.com/hospitals/federal-judge-rules-hhs-efforts-to-punish-pharmas-over-340b-restrictions-arbitrary-and

https://www.fiercehealthcare.com/hospitals/hhs-pulls-340b-advisory-opinion-after-it-fails-to-throw-out-astrazeneca-lawsuit

https://www.fiercehealthcare.com/payer/hhs-proposes-nixing-rule-affecting-insulin-and-epipen-discounts-for-community-health-centers

NBA and NFL Health Care Programs Are Not Immune From False Claims

David Brust, Class of 2022, Belmont Law

Eighteen former National Basketball Association (“NBA”) players have been charged with conspiracy to commit health care fraud and wire fraud for making false claims to the NBA’s health and welfare benefit plan. The NBA’s health and welfare benefit plan provides players with health coverage after their careers end. The indictment claims that the eighteen former players collectively submitted false claims to get reimbursed for medical and dental care that they never received. Overall, these players allegedly filed over $3.9 million in false claims from 2017 to 2020. The individual claims ranged from $65,000 to $420,000. The players, who collectively earned over $343 million during their NBA careers, face up to twenty years in prison if convicted.

This scheme is not the first among former professional athletes. As of September of 2021, fifteen ex-NFL players have pleaded guilty to participating in a health care fraud scheme. These players filed false claims with the Gene Upshaw NFL Player Health Reimbursement Account Plan, which gives tax-free reimbursements of up to $350,000 to former players for health expenses that are not covered by insurance. In this case, the former players mainly filed claims for reimbursement for medical equipment they never received. For example, former All-Pro running back Clinton Portis received over $99,264 in two months for false claims and Robert McCune received around $2.9 million. Portis, who faces up to ten years in prison, is set to be sentenced in January 2022, while McCune, who faces up to twenty years in prison, is set to be sentenced on November 19, 2021.

Overall, these cases show that the DOJ is actively pursuing those who commit health care fraud. Anyone can commit health care fraud, not just doctors, nurses, and providers. In 2020 alone there was 1,148 criminal health care fraud investigations that resulted in 412 cases. Furthermore in 2020 alone the Department of Justice recouped $1.8 billion that was lost due to healthcare fraud. Clearly, the DOJ is cracking down on those who commit health care fraud, even if it is not against Medicare or Medicaid.

Works Cited:

https://www.npr.org/2021/09/08/1035081837/former-nfl-players-plead-guilty-to-fraud-scheme-stealing-from-health-care-fund

https://www.npr.org/2021/10/07/1044052168/nba-former-players-charged-health-care-fraud

https://www.policymed.com/2021/09/hhs-oig-and-doj-release-annual-report.html

OSHA’s Emergency Temporary Standard

Will Brandt, Class of 2022, Belmont Law

On November 5th, 2021, the Occupational Safety and Health Administration (OSHA) published the COVID-19 Vaccination and Testing; Emergency Temporary Standard (ETS). To summarize the ETS, employers who employ over one hundred employees, or Covered Employers, “must develop, implement, and enforce a mandatory COVID-19 vaccination policy, with an exception for employers that instead adopt a policy requiring employees to either get vaccinated or elect to undergo regular COVID-19 testing and wear a face covering at work in lieu of vaccination.”

A question that has plagued media sources and Facebook posts throughout the United States: Are these vaccine mandates legal? The Biden administration is mandating the vaccine and testing requirements through OSHA. The operative law, which allows OSHA to make regulations, is the Occupational Safety and Health Act of 1970. The OSHA Act of 1970 empowers OSHA to develop workplace standards to keep workers safe in their employment. Typically, the dangers of the workplace manifest in risks that are specific to a job, not a virus that is widespread throughout the community.

Interestingly, OSHA has issued this specific regulation under an Emergency Temporary Standard. What this means is that the regulation “takes effect immediately and are in effect until superseded by a permanent standard.” To use the ETS, OSHA must demonstrate that there is a “grave danger due to exposure to toxic substances or agents determined to be toxic or physically harmful or to new hazards and that an emergency standard is needed to protect them.” However, the validity of the use of an ETS may be challenged in the appropriate U.S. Court of Appeals.

Currently, GOP lawmakers are arguing that this use of the ETS to mandate vaccines and testing is essentially forcing regulation onto the American people through improper channels. To support this argument the point is made that OSHA is meant to regulate the workplace, and through this ETS, it has exceeded the scope of its mandate by doing this as a matter of public health rather than worker safety.

Procedurally, the Biden Administration has the power to direct OSHA to develop these regulations. OSHA has the legal right to issue these emergency regulations. The question whether OSHA can prove that this ETS regulation is necessary for the current risk posed to workers by COVID-19. There exists debate about why the OSHA ETS only places these mandates on employers who employ over one-hundred employees, but the most likely reason seems to be that larger workforces have a larger network, which increases risk of infections coming into the office. As a final point, it should be noted that employers can enforce these mandates so long as there are accommodations made for religious objections or medical reasons.

Works Cited:

https://www.natlawreview.com/article/does-osha-s-new-rule-have-shot-updates-fifth-circuit-and-beyond

https://www.osha.gov/laws-regs/regulations/standardnumber/1960

https://www.osha.gov/laws-regs/standards-development

https://www.natlawreview.com/article/does-osha-s-new-rule-have-shot-updates-fifth-circuit-and-beyond

Merck Sued for Allegedly “Monopolistic Practices”

Will Brandt, Class of 2022, Belmont Law

Insurance providers Humana and Centene have filed suit against Merck & Co. and Glenmark Pharmaceuticals Ltd. alleging a monopolistic scheme to delay generic versions of its blockbuster cholesterol drug, Zetia. Merck is an American multinational pharmaceutical company that is headquartered in New Jersey. Merck produces the drug Zetia, which is used to treat high cholesterol by reducing the amount of cholesterol the body can absorb. Merck and Glenmark have been sued in a New Jersey federal court for allegations of state and federal antitrust violations. The plaintiffs include: Centene Corporation, WellCare Health Plans, Inc., New York Quality Healthcare Corporation dba Fidelis Care, and Health Net, LLC.

Interestingly, this matter started when Merck sued Glenmark, (a related company to Merck) who intended to launch a generic version of Zetia, for patent infringement. Merck allegedly filed suit against Glenmark knowing that the case had no merit because Merck never made the proper disclosures to the United States Patent and Trademark office. Thereafter, it is alleged that Glenmark dropped all its “meritorious” defenses to Merck’s lawsuit and entered into a settlement that delayed Glenmark’s ability to begin selling its generic version of Zetia for 180 days. Further, by Merck filing a suit against Glenmark, a thirty-month stay was triggered that prevented the FDA from approving Glenmark’s generic version of Zetia. In the terms of the settlement, Glenmark agreed to not launch a generic version of Zetia for five years.

The plaintiffs, who each filed separate suits, include two of the nation’s largest health insurance companies, Humana and Centene. Both companies claimed that Merck has reaped billions of dollars in additional sales of Zetia due to the delay in a generic alternative to Zetia being launched into the market. Therefore, the plaintiffs, as health insurance agencies, claimed that they have overpaid millions of dollars for brand-name Zetia, that would not have been paid if a generic alternative was available.

The predominant issues within the lawsuits are the pay-for-delay deals between generic companies and branded companies. This practice has been criticized by the Federal Trade Commission and there is a proposed ban from the Biden Administration. Moreover, a 2010 report from the FTC has said that these schemes cost consumers over $3.5 billion dollars a year, which has likely increased in the following decade of the report.

On September 9th, the Biden administration included the following comments in a report:

“To facilitate competition, it is important to reduce regulatory challenges to approving new products . . . .”

“Reforms should address industry tactics and regulatory challenges that delay or discourage competition by slowing down the approval of competing generics and ‘biosimilar’ products.”

“Improving competition through these methods will result in a more resilient and transparent prescription drug industry than we have today, which in turn should lower prices.”

Works Cited:

https://www.healthcaredive.com/news/centene-humana-sue-merck-for-monopolistic-scheme-to-delay-generics-of-bl/607084/

https://www.drugs.com/zetia.html

https://lawstreetmedia.com/news/health/merck-and-others-sued-for-antitrust-over-cholesterol-drugs-and-related-patents/.

Steps in the Right Direction

Maddie Gilmore, Class of 2023, Belmont Law

The representation or lack thereof of minority populations in clinical trials for new drugs and medical devices is a well-established issue. The Food and Drug Administration (“FDA”) is the administrative agency tasked with regulating the research required to accompany applications for approval of new drugs or devices as well as the standards to which the research is held. There are currently no substantive requirements for research that represents adequate racial quotas. The FDA instead, releases industry guidance and the guidelines warn corporate entities not to turn a blind eye to the need for minority populations to be adequately represented in clinical trials. Significant progress has been made, but the trend of progress does not mean that there is no room for improvement.

One reason inadequate representation is a persistent issue is a lack of access or open channels of communication to potential minority participants. This has sparked a discussion in the medical community about possible solutions, such as promoting and funding outreach or intervention programs. These programs are designed at building a referral network with those trusted, yet “research-naïve” physicians who serve as a conduit to opening channels of communication. These interventions would also contemplate providing access to childcare for purposes of easing participation in research, disseminating clinical trial information more widely and intentionally within communities of color, and educating both corporate entities and potential minority patients about areas of concern.

Considering these discussions, the National Cancer Institute (“NCI”) has created a new federal program designed at connecting underrepresented populations to clinical trials. The program is in the form of a federal grant which invites healthcare entities to apply by submitting a proposal for interventions. The program would then evaluate the proposals, and if found to be well-crafted and potentially helpful, implement it. The intervention proposal would be expected to be culturally tailored to focus on “accrual of underrepresented racial/ethnic (R/E) minority populations, to NCI-supported clinical trials. This will require outreach and education multilevel interventions at the CT site, provider, and/or patient levels.”

This is a unique opportunity that researchers and providers should be eager to take advantage of. In light of FDA guidance indicating such a strong and growing trend of industry focus on appropriate levels of minority-inclusive research, it is not unfathomable that eventually FDA will implement binding rules and regulations to the same effect. A forward-looking entity will recognize the need for eventual compliance. Should such rules ever come into effect, the game of catch-up may be an insurmountable hurdle. Considering this trend, why not take advantage of this federal grant? In addition to the financial assistance, participation even in the application process will ensure that the entity is well informed by relevant theories, frameworks, and models. Unfortunately, many providers and patient level physicians will not take advantage of this unique opportunity.

Works Cited:

https://www.grants.gov/web/grants/view-opportunity.html?oppId=335518

https://grants.nih.gov/grants/guide/rfa-files/RFA-CA-21-057.html