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September, 2022
As summer concludes this month, we begin with the novel abatement and injunction orders issued as part of the ongoing National Prescription Opiate Litigation. The orders involving CVS, Walgreens, and Walmart mandate the pharmacies to establish a Controlled Substances Compliance Program. Thus, they represent a departure from the usual damages approach to the epidemic.
Next, we turn to a series of recent OIG Advisory Opinions. First, we examine the recent Advisory Opinion (22-14) that addresses industry-sponsored continuing education for HCPs. We also examine four Advisory Opinions (20-02, 20-09, 21-08, and 22-05) involving support for patients receiving single-course therapies or participating in clinical trials.
We also examine the recent federal developments surrounding drug pricing. These developments include a new policy statement by the FTC directed at PBMs, and the drug pricing provisions contained in the Inflation Reduction Act.
Articles
FEATURE
More than Just Money
Pharmacy Opioid Cases Suggest New Remedial Approach for Mass Litigation
By Dr. Seth B. Whitelaw and Fee Moua
Summary: Recently, in the National Prescription Opiate Litigation, Judge Polster issued Abatement and Injunction Orders for the pharmacy defendants (CVS, Walgreens, and Walmart). These orders are a departure from the previous purely monetary awards and settlements. For life science compliance professionals, the Injunction Order outlining a Controlled Substances Compliance Program is particularly relevant as it will likely serve as a template in future mass pharmaceutical and device litigation.
LITIGATION & Enforcement – OIG ADVISORY OPINIONS
Pharmaceutical & Medtech Funding of Health Care Provider Education
Government Scrutiny Continues
By Matt Wetzel
Summary: As HHS’s Office of Inspector General continues to express skepticism over pharmaceutical and medical technology companies’ support for educating health care providers, this Article highlights the government’s chief concerns and how life sciences companies can respond.
Time for a New Safe Harbor
Truing Up OIG’s Advisory Opinion in the Context of Serving Indigent & Rural Populations
By Kirt Kraeuter, Staff Writer
Summary: Four OIG Advisory opinions issued since 2020 have applied similar analysis when determining that although the requestors’ proposals would generate prohibited remuneration under the Anti-Kickback Statute, the Office would not impose administrative sanctions. While the described programs are similar to a new safe harbor initially proposed in the fall of 2019, that safe harbor is off-limits to manufacturers. The OIG opinions may indicate a distinct fact pattern that allows manufacturers to clearly differentiate programs designed to support patient outcomes and clinical trials, particularly those designed to benefit economically disadvantaged individuals, from prohibited “seeding” programs.
Litigation & Enforcement – Drug pricing
The FTC Takes Aim at PBMs
New Policy Statement Highlights Anticompetitive Effects of Pharmacy Rebates
By Robert N. Wilkey, Esq., Senior Staff Writer
Summary: On June 16, 2022, the United States Federal Trade Commission voted unanimously to put Pharmacy Benefit Managers on notice that high drug rebate requirements may violate federal competition laws if they stifle patient access. Although it remains to be seen how the FTC’s policy statement will impact drug pricing in the long run, in the short term, it is clear the FTC remains a viable force in terms of targeting the prescription drug market.
Legislative Update – drug Pricing
Breaking the Impasse
Understanding the Inflation Reduction Act’s Drug Pricing Provision
By Gwendolyn Ball, J.D., Ph.D., Staff Writer
Summary: After many years of futile attempts, the federal government now has a prescription drug pricing policy. Beneficiaries will see their drug costs reduced by removing the catastrophic phase copay and capping monthly insulin payments at $35. Manufacturers will be required to pay a rebate when they raise prices at a higher rate than inflation, much like the inflation rebate they pay in Medicaid. Finally, Medicare is authorized to negotiate drug prices for the first time. But the scope of drug price negotiation initiative is much reduced from previous proposals, covering only ten drugs in the first round of negotiations. And the first round of negotiated prices will not be effective until 2026. Overall, the CBO projected the net impact of these provisions to lead to program savings.
From all of us here (virtually) at Policy & Medicine Compliance Update, we hope all our readers and their families are safe and healthy. And as always, thank you for subscribing and for your continuing support in making us the most comprehensive, up-to-date compliance publication for life science compliance professionals.
Wishing you all the best,
Dr. Seth B. Whitelaw
Editor