STLR Link Roundup – January 25, 2019

Senators Grassley and Wyden Propose The Right Rebate Act

In December, Senators Chuck Grassley (R-IA) and Ron Wyden (D-OR) introduced legislation entitled The Right Rebate Act of 2019. This legislation would serve as an amendment to Title XIX of the Social Security Act. The aim of this amendment is to allow for the pursuit of penalties by the Department of Health and Human Services (HHS) against a drug manufacturer that “knowingly misclassifies or submits incorrect drug category information” for a drug covered by the Medicaid drug rebate program (MDRP). This bill was proposed in direct response to the False Claims Act lawsuit filed against Mylan by the Department of Justice, which alleged that Mylan misclassified the EpiPen as a generic drug that was part of the MDRP. While the lawsuit was settled for $465 million, the senators point to data suggesting that “taxpayers may have overpaid for EpiPen by as much as $1.27 billion” over the course of a decade. They also emphasize that Center for HHS  was aware of the misclassification for years, but was not empowered to impose penalties or force Mylan to reclassify its drugs.

Federal Circuit Upholds $23 Million Award in Patent Infringement Lawsuit Against Medtronic

On January 24th, the Federal Circuit affirmed the holding of the district court in Barry v. Medtronic. Barry, a neurosurgeon, had sued Medtronic for patent infringement over methods and systems used in spinal alignment. Medtronic had attempted to invoke the “public use bar” in its defense against Barry, which prevents a patent from being issued in cases where an invention has been in public use for over a year before the filing of a patent application. The court cited its opinion in Honeywell Int’l v. Universal Avionics Sys., finding that the use of Barry’s invention in surgeries fell within the “experimental-use exception.” It also upheld a $23 million damages award, finding that the methodology used to establish infringement below was sound.  

California Medical Board Cannot Force Doctor to Disclose Opioid Prescription Records

In Grafilo v. Cohanshohet, decided on January 22nd, the California Court of Appeals for the Second District held that the California Medical Board could not compel physicians to disclose medical records if patients refused to release them to the Board. Pain medicine specialist Dr. Kamyar Cohanshohet was under investigation for prescribing “huge quantities of narcotics to patients” without conducting any tests or physical examinations. The board was able to identify several patients to whom Cohanshohet prescribed opioids in higher-than-recommended dosages, but the patients refused to allow the Board to examine their records. The court found that the patients had a right to privacy in their medical records under the California state constitution and that the Board did not demonstrate sufficiently “good cause” to violate this right. 

Walgreens Settles False Claims Act Lawsuit for $209.2 Million

On January 22nd, Walgreens Boots Alliance agreed to a settlement with Medicaid and the United States for $209.2 million. The lawsuit was filed in 2015 by two whistleblowers, who alleged that Walgreens submitted false claims to Medicaid for more insulin pens than patients needed. Walgreens acknowledged that as a result of its practices, state Medicaid programs approved and paid for many claims that would not have been approved of under correct reporting standards. In a statement, Walgreens said it had “admitted no wrongdoing.” 

FDA Works to Support the Influx of Cell and Gene Therapy Products in Development

On January 15th, the Food and Drug Administration (FDA) issued a statement highlighting the dramatic increase in investigational new drug (IND) applications for cell and gene therapies. The FDA estimated that by 2020, they would be receiving over 200 INDs annually, and that by 2025, they would be approving between 10 and 20 cell and gene therapies annually. The statement highlighted their desire to add an additional 50 clinical reviewers to aid in the development and review of these products. The FDA also outlined a number of new policies aimed at encouraging development in this area, including maximizing use of accelerated approval pathways and issuing clinical guidance documents (such as those on the safety and efficacy of gene and cell therapies.)

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