Tag Archives: prescription

Supreme Court Rules that Government Regulators Can Sue Over Pay-for-Delay Agreements Between Brand and Generic Drug Manufacturers

George F. Indest III, Board Certified by The Florida Bar in Health Law

George F. Indest III, Board Certified by The Florida Bar in Health Law

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The U.S. Supreme Court ruled on June 17, 2013, that pay-for-delay agreements between brand name and generic drug manufacturers are subject to anti-trust scrutiny. These pay-for-delay agreements, or reverse payments, are usually a form of settlement between the two manufacturers in patent litigation. The Supreme Court decided that each instance must be considered on a case-by-case basis. This verdict rewrites the rules governing the release of generic drugs. It is likely to increase the number of generic drugs in the marketplace and reduce the price of generic drugs.

To read a previous blog on pay-for-delay agreements, click here.

What is a Pay-for-Delay Agreement?

Pay-for-delay agreements came as the result of the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act. The Hatch-Waxman Act gives generic drug manufacturers an incentive to challenge brand name drug patents because the first generic drug manufacturer to received U.S. Food and Drug Administration (FDA) approval to launch a generic copy of a brand name drug can receive a 180-day marketing exclusivity period for the product. The FDA cannot approve any other generic applications for the same drug until the first-to-file generic manufacturer has sold its product for 180 days or has given up its exclusivity period. Click here to read the Hatch-Waxman Act.

Brand name manufacturers often challenge generic drug manufacturers who try to sell their product prior to patent expiration. This results in litigation to determine whether the generic manufacturer is violating the brand name manufacturer’s patents.

Instead of going to court over this, brand name manufacturers often choose to pay a settlement to the generic drug manufacturers for agreeing to delay the launch of its competing product.

Why the Supreme Court Overruled Court of Appeals Decision.

The 5-3 vote overruled the 11th Circuit Court of Appeals decision that said pharmaceutical companies can’t be sued unless the patent litigation is a sham or a generic drug maker agrees to delay introduction of a generic drug into the market even after the patent has expired.

A Med Page Today article lists the Supreme Court’s five reasons why the appellate court made a mistake in giving blanket immunity to pay-for-delay agreements from the decision written by Justice Stephen Breyer:

–  “A reverse payment, where large and unjustified, can bring with it the risk of significant anticompetitive effects.”

–  “One who makes such a payment may be unable to explain and to justify it.”

–  “Such a firm or individual may well possess market power derived from the patent.”

–  “A court, by examining the size of the payment, may well be able to assess its likely anticompetitive effects along with its potential justifications without litigating the validity of the patent.”

–  “Parties may well find ways to settle patent disputes without the use of reverse payments.”

Click here to read the entire Med Page Today article.

Pay-for-Delay Agreements Allegedly Cost Patients Millions of Dollars a Year.

According to Bloomberg, the high court’s decision may discourage brand name and generic pharmaceutical companies from reaching settlements. It’s been found that pay-for-delay agreements can delay a generic drug almost 17 months before it can be put on the market. In the meantime, patients must pay higher prices for the brand name version. This also impacts Medicare and Medicaid programs. The Federal Trade Commission (FTC) claims pay-for-delay agreements cost consumers $3.5 billion a year in the form of higher drug prices.

To read the Bloomberg article, click here.

The Case of the FTC v. Solvay Pharmaceuticals.

The Supreme Court case center around AndroGel, a treatment for low testosterone in men, made by Solvay Pharmaceuticals, Inc. The FTC sued Solvay and three generic drug companies. According to Bloomberg, the FTC said that a payment made by Solvay, the holder of a patent on AndroGel, to the generic drug manufacturers represented an unlawful restraint of trade because it was intended to keep cheaper, generic versions of AndroGel off the market until 2020.

FTC Enthusiastic About the Decision.

In a statement, the FTC Chairwoman said the Supreme Court’s decision is a “significant victory for American consumers, American taxpayers and free market.” She also stated, “The court made it clear that pay-for-delay agreements are subject to antitrust scrutiny.”

Click here to read the full statement from the FTC.

Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists and pharmacies in investigations, regulatory matters, licensing issues, litigation, inspections and audits. The firm’s attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

What do you think of the Supreme Court’s ruling? Do you agree or disagree? What effect do you think it will have on the pharmaceutical industry? Please leave any thoughtful comments below.

Sources:

Stohn, Greg. “Drugmakers Opened to ‘Pay for Delay’ Suits by High Court.” Bloomberg. (June 17, 2013). From: http://www.bloomberg.com/news/2013-06-17/drugmakers-opened-to-pay-for-delay-suits-by-high-court.html

Frieden, Joyce. “Supreme Court Split on Pharma ‘Pay for Delay’ Deals.” Med Page Today. (June 17, 2013). From: http://bit.ly/18SfhKb

Kaplan, Peter. “Statement of FTC Chairwoman Edith Ramirez of the U.S. Supreme Court’s Decision in FTC v. Actavis, Inc.” (June 17,2 013). From: http://www.ftc.gov/opa/2013/06/actavis.shtm

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Former Daytona Beach Chiropractor Will Spend More Than 15 Years Behind Bars

8 Indest-2008-5By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

A former Daytona Beach chiropractor will spend more than 15 years in federal prison for an alleged health care fraud scheme and illegally prescribing pills, according to the Federal Bureau of Investigation (FBI), Jacksonville Division. He was also ordered to pay more than $2 million in restitution to his victims. The former chiropractor was sentenced on November 29, 2012, by a United States District Judge who called his fraud scheme “sophisticated.”

Click here to read the press release from the FBI.

I previously wrote about this scheme in August 2012, when the former chiropractor was found guilty. To read that blog, click here.

Complex Scheme Involved a Number of Co-Conspirators.

According to the Daytona Beach News Journal, the former chiropractor is thought to have worked with five other doctors in a scheme. The group allegedly split the money they collected from sending inflated bills to insurance companies, including Medicare.

Former Chiropractor Allegedly Prescribed Controlled Substances to Patients.

FBI investigators also accused the former chiropractor of writing prescriptions for controlled substances. Since the man could not prescribe controlled substances, he would use the names of medical doctors who most likely knew their names were being used illegally. It’s believed that there were about a dozen patients who overdosed on controlled substances prescribed by the former chiropractor, according to the Daytona Beach News Journal.

Click here to read the entire Daytona Beach News Journal article.

Effects of Voluntarily Relinquishing a Professional License.

Back in December of 2011, the former chiropractor voluntarily relinquished his license. We almost always counsel our clients to refrain from voluntarily relinquishing their licenses. A voluntary relinquishment of a license in the face of a pending investigation is treated, for all practical purposes, the same as a disciplinary revocation.

The consequences will usually include:

1. Mandatory report to the National Practitioner Data Base (NPDB) (Note:  Healthcare Integrity and Protection Data Bank or HIPDB recently folded into NPDB) which remains there for 50 years.

2. Any other states or jurisdictions in which the client has a license will also initiate action against him or her in that jurisdiction.  (Note:  I have had two clients who had licenses in seven other states).

3. Action to revoke, suspend or take other action against the clinical privileges and medical staff membership of those licensed health professionals who may have such in a hospital, ambulatory surgical center, skilled nursing facility, or staff model HMO or clinic.

4. The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) will take action to exclude the provider from the Medicare Program.  If this occurs (and most of these offenses require mandatory exclusion) the provider will be placed on the List of Excluded Individuals and Entities (LEIE) maintained by the HHS OIG.

5. If the above occurs, the provider is also automatically “debarred” or prohibited from participating in any capacity in any federal contracting and is placed on the U.S. General Services Administration’s (GSA’s) debarment list.

6. The U.S. Drug Enforcement Administration (DEA) will act to revoke the

 professional’s DEA registration if he or she has one.

7. The board certified health professional’s certifying organization will act to revoke his or her certification.

For more reasons why a health care provider should not relinquish a professional license, click here.

Innocent Until Proven Guilty.

Remember, all person are presumed innocent until convicted in a court of law. In this case, the chiropractor has been convicted in a court of law.

Contact Health Law Attorneys Experienced in Handling Medicare Audits.
Medicare fraud is a serious crime and is vigorously investigated by the FBI, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (DHHS). Often other state and federal agencies, including the U.S. Postal Service (USPS), state Medicaid Fraud Control Units (MFCUs) and other law enforcement agencies participate. Don’t wait until it’s too late. If you are concerned of any possible violations and would like a confidential consultation, contact a qualified health attorney familiar with medical billing and audits today.

The Health Law Firm’s attorneys routinely represent physicians, nurses, chiropractors, medical groups, clinics, pharmacies, home health care agencies, nursing homes, group homes and other healthcare providers in Medicaid and Medicare investigations, audits and recovery actions.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

Do you think this sentence is too steep? Do you think the doctors the former chiropractor worked with will receive the same sentence? Please leave any thoughtful comments below.

Sources:

Pavuk, Amy. “Chiropractor gets 15 Years Prison for Illegally Writing Prescriptions and Healthcare Fraud.” Orlando Sentinel. (November 28, 2012). From: http://www.orlandosentinel.com/news/local/breakingnews/os-chiropractor-painkillers-sentence-20121128,0,60766.story

Federal Bureau of Investigation. “Former Daytona Beach Chiropractor Sentenced to More Than 15 Years in Federal Prison.” FBI. (November 29, 2012). From: http://www.fbi.gov/jacksonville/press-releases/2012/former-daytona-beach-clinic-owner-sentenced-to-more-than-15-years-in-federal-prison

Longa, Lyda. “Judge Sentences Chiropractor Joseph Wagner to 15-Year Term.” Daytona Beach News Journal. (November 28, 2012). From: http://www.news-journalonline.com/article/20121128/NEWS/311289998/1025?p=2&tc=pg

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2012 The Health Law Firm. All rights reserved.