Court Cases

News Briefs: FDA Reveals Safety Concerns for Generics — but Doesn’t Pull Drugs

Safety and efficacy data of generic versions of several drugs, including Pfizer Inc.’s Viagra (sildenafil) and Eli Lilly & Co.’s Cialis (tadalafil), may have been falsified, according to Bloomberg. Bloomberg on July 9 reported that the FDA in June notified drug manufacturers that data from Synapse Labs Pvt. Ltd., an Indian drug researcher, may have been used in hundreds of drugs currently on sale. The FDA was tipped off by European regulators about the problematic data. In an interview with Bloomberg, former FDA inspector Massoud Motamed expressed concerns that the affected drugs may have too much or too little of their active ingredient. However, the FDA has not revealed specifics about which drugmakers used Synapse’s data, citing confidentiality reasons, and has not suspended sales of any drugs — unlike EU regulators, who recommended that member states stop sales of certain drugs. Cherie Duvall-Jones, a spokesperson for the agency, told Bloomberg that "the FDA remains vigilant and will act should we identify safety issues."

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Appeals Court Backs Cigna in Noncompete Ruling With FTC Rule in Limbo

A federal appeals court recently ruled that former Cigna Group executive Amy Bricker cannot join rival CVS Health Corp. due to a noncompete agreement, upholding a preliminary injunction from last year. While the case involving Bricker suggests companies can effectively prohibit employees from switching jobs, firms may no longer be able to do so later this year.

A Federal Trade Commission (FTC) final rule published in the Federal Register in May would ban most firms from enforcing or signing noncompetes with their workers. However, two attorneys tell AIS Health, a division of MMIT, the rule may not go into effect as planned on Sept. 4 due to multiple appeal. Moreover, it may never be implemented, especially if Donald Trump is elected president in November.

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‘Chaotic’ Health Care Rulemaking Looms After Supreme Court Hamstrings Federal Agencies

On June 28, the U.S. Supreme Court in two rulings eliminated a longstanding legal precedent that has protected regulations issued by federal agencies from a broad swath of legal challenges. Attorneys say rulemaking in health care will become more unpredictable as regulations are challenged — which could cost health plans, providers, and patients.

In their rulings in Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo, the Supreme Court did away with “Chevron deference,” a legal concept that is over 40 years old. Chevron deference granted agencies the legal benefit of the doubt when they issued regulations that clarified parts of statute that Congress had left ambiguous. The premise behind the concept was that agency staff have subject matter expertise that Congress is unlikely to share, and that Congress couldn’t be expected to continually update statutes in order to address every emerging issue of importance to a specific sector of the economy.

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Here’s Why States, Pharmacists Want SCOTUS to Weigh Another PBM Case

Although the Supreme Court has already weighed in on one case regarding states’ ability to regulate PBMs, the top law enforcement officials in more than 30 states are asking the high court to review another case that they claim will remove lingering uncertainty about the limits of states’ authority.

In PCMA v. Mulready, the current case, the Pharmaceutical Care Management Association is challenging an Oklahoma law — the Patient’s Right to Pharmacy Choice Act — which sets geography-based access standards for pharmacy networks. Among other provisions, it also bans PBMs from using discounts or cost-sharing differences to push plan members to certain in-network pharmacies, particularly those owned by that same PBM’s parent company.

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Appeals Court Leaves Preventive Services Coverage Mandate in Limbo — What’s Next?

Legal odds are growing long for the Affordable Care Act’s preventive services coverage mandate after a June 21 appeals court decision, which didn’t resolve a lawsuit that could undermine the legal authority of federal preventive services experts to recommend those services be covered free of charge by health plans. The next stage of the Braidwood v. Becerra suit will be decided by either the conservative Supreme Court or a federal judge who has issued a series of rulings undermining the ACA.

The U.S. Court of Appeals for the Fifth Circuit found that the federal government can still require health plans to provide some preventive services to plan members free of charge under the Affordable Care Act — for now. The ruling still leaves open the possibility that, in the end, Braidwood could upend the preventive services coverage regime set up by the ACA. In the next step of Braidwood, the Biden administration must decide whether to petition the Supreme Court for an appeal, or let the case be decided by Texas District Court Judge Reed O'Connor, who has repeatedly ruled against provisions of the ACA.

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News Briefs: Supreme Court Hobbles Federal Regulators’ Authority

The U.S. Supreme Court on June 28 issued rulings that will overturn the so-called Chevron doctrine, which gave federal agencies broad authority to interpret laws through their regulations. Writing for the majority in a pair of related cases — Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Dept. of Commerce — Chief Justice John Roberts wrote unambiguously that “Chevron is overruled. Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the [Administrative Procedure Act] requires.” The phrase Chevron doctrine refers to a 1984 case, Chevron v. National Resources Defense Council, which created a framework in which courts largely defer to interpretations of the law made by entities like HHS or the Environmental Protection Agency, as long as that interpretation is reasonable. Overturning that doctrine is expected to have significant implications for highly regulated industries, including the health insurance sector.

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News Briefs: Arkansas Sues PBMs, Claims They Worsened Opioid Epidemic

Arkansas Attorney General Tim Griffin, a Republican, sued UnitedHealth Group’s Optum Rx and The Cigna Group’s Express Scripts over their alleged roles in the opioid epidemic. In the suit, Griffin accuses the PBMs of profiting from inappropriate opioid prescribing. According to a statement from Griffin’s office, between 2006 and 2014, 1.5 billion “units of addictive opioids” were dispensed in Arkansas, amounting to a rate of 114.6 opioid fills per every 100 Arkansans. The suit alleges that PBMs “increas[ed] opioid utilization by placing opioids on lower tiers of their formularies” and operated online pharmacies that dispensed opioids “while failing to follow state and federal laws on controlled substances.”

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Here’s Why States, Pharmacists Want SCOTUS to Weigh Another PBM Case

Although the Supreme Court has already weighed in on one case regarding states’ ability to regulate PBMs, the top law enforcement officials in more than 30 states are asking the high court to review another case that they claim will remove lingering uncertainty about the limits of states’ authority.

In PCMA v. Mulready, the current case, the Pharmaceutical Care Management Association is challenging an Oklahoma law — the Patient’s Right to Pharmacy Choice Act — which sets geography-based access standards for pharmacy networks. Among other provisions, it also bans PBMs from using discounts or cost-sharing differences to push plan members to certain in-network pharmacies, particularly those owned by that same PBM’s parent company.

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News Briefs: Court Upholds ACA Preventive Services Coverage Mandate, for Now

The U.S. Court of Appeals for the Fifth Circuit on June 21 found that the federal government can still require health plans to provide some preventive services to plan members free of charge under the Affordable Care Act — for now. Prior to Braidwood v. Becerra, federal regulators relied on recommendations for preventive services from medical experts in several federal agencies, especially the U.S. Preventive Services Task Force (USPSTF), the Advisory Committee on Immunization Practices (ACIP) and the Health Resources and Services Administration (HRSA). Based on those recommendations, non-grandfathered health plans governed by the ACA would have to cover certain preventive services free of charge, including vaccinations and contraceptives. In their ruling in Braidwood, the Fifth Circuit's judges agreed with Texas District Court Judge Reed O'Connor's earlier finding that USPTF did not have the constitutional authority to recommend preventive services coverage mandates to federal regulators. In further litigation in O'Connor's court, the other agencies could come under the same scrutiny. According to Richard Hughes IV, partner at Epstein Becker Green, the Fifth Circuit "agree[s] that there's a constitutional problem with the [USPTF]." In addition, he says, "they just raise more questions with respect to whether the other bodies' roles are constitutional." For the time being, Hughes says, other than the plaintiffs, "all other private payers and employers subject to the ACA requirements must continue to provide zero [cost] out-of-pocket coverage for recommended preventive services, including PrEP for HIV." But going forward, Hughes says, "the requirement to cover vaccines and contraceptives could be in jeopardy."

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As Insurers Are Sued Over AI Use, Regulators Aim to ‘Get Ahead’ of the Issue

Three major health insurers have denied allegations brought against them in lawsuits pertaining to the use of artificial intelligence in coverage decisions. While The Cigna Group, Humana Inc. and UnitedHealth Group may succeed in getting the cases dismissed, those companies and other payers could continue to face scrutiny over their use of AI, according to Ileana M. Hernandez, a partner at Manatt, Phelps & Phillips, LLP.

“The staggering volume of claims and complexity of claims that insurance plans need to review on a daily basis make insurance reviews an attractive target for using AI,” said Hernandez, who spoke on June 12 during a Manatt webinar. “However, the use of algorithms for review of coverage issues has resulted in questions, concerns, investigations and now lawsuits.”

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