FTC v. Actavis: What Does It Mean for Reverse-Payment Settlements?

On June 17, 2013, the United States Supreme Court announced a rule that blurs the lines between antitrust and patent law in the context of Hatch-Waxman litigation. In FTC v. Actavis, 570 U.S. 756 (2013), the Federal Trade Commission (“FTC”) prevailed when the Supreme Court held in a 5-to-3 decision [1] that reverse payment settlements in Hatch-Waxman cases are subject to antitrust scrutiny, resolving a circuit split and impassioned debate among antitrust lawyers. This is only the second antitrust case in 20 years where the enforcers have prevailed. The Court, however, rejected the FTC’s position that reverse-payment settlements were presumptively illegal, ruling that they are subject to scrutiny under the rule of reason.

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Cybersecurity: FDA Risks for Medical Devices

On Thursday, June 13, 2013, the U.S. Food and Drug Administration (“FDA”) released a draft guidance on measures to help ensure the cybersecurity of medical devices. The draft guidance, titled “Content of Premarket Submissions for Management of Cybersecurity in Medical Devices,” proposes cybersecurity features that should be incorporated into wireless, Internet- and network-connected medical devices (“cybersecurity-vulnerable devices”), as well as information that will be requested in premarket submissions for cybersecurity-vulnerable devices. In addition to the draft guidance, FDA also issued an FDA Safety Communication to medical device manufacturers, hospitals, medical device user facilities, health care IT and procurements staff, and biomedical engineers on cybersecurity for medical devices and hospital networks.

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Thoughts on Regulatory Constraints of Business Models

I am often called upon to address the nature of how regulatory controls may apply to the organization of healthcare companies in their ability to create, deliver, and capture value (their ‘business models’). While no summation could adequately capture all of the complexity inherent in this question, it would seem appropriate to briefly comment on some of the general recent trends I have seen, and how they may be shaped by various regulatory authorities.

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Supreme Court Hears Arguments on “Pay for Delay” Agreements

On March 25, 2012, the Supreme Court heard oral argument on the legality of “reverse payment” or “pay for delay” agreements between brand-name and generic drug manufacturers.

Reverse payment agreements settle patent infringement actions brought by a brand-name drug manufacturer against a potential generic competitor under the Hatch-Waxman Act. In contrast to typical settlements of patent infringement actions, it is the patent holder (the brand-name drug manufacturer) that agrees to pay a large sum of money to the accused infringer (the generic) in exchange for an agreement that the generic will not challenge the patent or enter the market for a period of time.

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Ninth Circuit Off-Label Marketing Decision Suggests More Prosecutions Will Be Coming

The Ninth Circuit has reopened a door for off-label marketing prosecutions, and it is important to review your compliance and risk management programs in light of this recent decision. Last December, the pharmaceutical and medical device industries exhaled a sigh of relief in response to the influential Second Circuit’s decision in United States v. Caronia, holding that truthful off-label marketing is a form of protected First Amendment speech that cannot form the basis for a criminal prosecution under 21 U.S.C. §333 of the Food, Drug and Cosmetic Act (“FDCA”). The Caronia decision followed the Supreme Court’s decision in Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (June 23, 2011), which held that a Vermont statute prohibiting pharmaceutical companies from engaging in truthful marketing activities offended the First Amendment. The question after Sorell and Caronia became, can the government still prosecute off-label marketing? On March 4, 2013 the Ninth Circuit said yes, albeit in an unpublished opinion.

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The Impact of Cloud Computing on FDA’s Regulation of Medical Products

The following blog article is drawn from the upcoming book Cloud Computing Deskbook, which is set to be released by Thomson Reuters West next summer. Cloud Computing Deskbook covers the legal and regulatory aspects of cloud computing, including those related to regulation by U.S. Food and Drug Administration. Please contact the author with any questions related to FDA regulation of cloud computing and software in general.

Cloud computing involves the delivery of computing as a service rather than a product. In a cloud computing solution, shared resources, software, and information are provided much like a utility, over a network to computers and other devices. Cloud computing has been embraced by the medical industry, and is used as a vital technology in electronic medical record systems and telemedicine solutions, among other products.

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FDA Issues Two Proposed Rules That Will Significantly Change Regulatory Requirements For Food Safety

By Peter ReichertzSeth Mailhot, and Robert Uram

The FDA Food Safety Modernization Act (FSMA), which was signed into law by President Obama on January 4, 2011, proposes the most sweeping reform of U.S. food safety laws in more than 70 years. As part of the changes introduced by the law, Section 103 of FSMA, titled “Hazard Analysis and Risk-Based Preventive Controls,” and Section 105 of FSMA, titled “Standards for Produce Safety,” each amend the Federal Food, Drug and Cosmetic Act by adding new sections 418 (Hazard Analysis and Risk-Based Preventive Controls )and 419 (Standards for Produce Safety ). Section 418 and 419 significantly change the existing legal requirements for food manufacturing and growing. Each section also requires the U.S. Food and Drug Administration (“FDA”) to conduct rulemaking to implement these provisions.

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FDA Issues Final Guidance on Filing PMAs and 510(k)s

By Seth A. Mailhot and Peter S. Reichertz

On December 31, 2012, the U.S. Food and Drug Administration (FDA) issued two new guidance documents on the minimum threshold of acceptability for medical device premarket submissions, which are titled “Refuse to Accept Policy for 510(k)s,” and “Acceptance and Filing Reviews for Premarket Approval Applications (PMAs).” These guidance documents detail the conditions under which a Premarket Notification [510(k)], or a Premarket Approval application [PMA] will be accepted for substantive review.

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FDA Takes Action Against Marketers Making “Cosmeceutical” Claims

FDA has taken no significant regulatory action with regards to claims made for cosmetics for almost twenty five years. As a result, claims for cosmetics have become aggressive, as new science and ingredients have blurred the line between cosmetics and pharmaceuticals, leading to a class of products generally referred to as “cosmeceuticals”. There is, however, no regulatory definition of a cosmeceutical, and recent regulatory actions by the FDA suggests that they believe claims for such products are drug claims.

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Proposition 37 Permits “Natural” Labeling for Non-GMO Processed Food

Proposition 37, the California Right to Know Genetically Engineered Food Act ("Prop 37”), if approved by the voters on November 6, 2012, will provide that food offered for retail sale in California produced with genetic engineering (“GMO food”) is misbranded unless clearly labeled to say it is genetically engineered. Prop 37 also provides that GMO “processed food” may not on its label, store signage, advertising or promotional materials state or imply that the food is “natural” or words of similar import.

Ballot materials prepared by the Legislative Analyst’s Office (LAO) state that Prop 37 could be interpreted to mean “processed food” is subject to the prohibition against “natural” labels, even if it is not produced with genetic engineering. In our view, this is not the correct interpretation of Prop. 37.

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