Category Archives: Uncategorized

An Attorney’s Duty to Concussed Athletes

In November 2018, the National Hockey League (NHL) joined the National Football League (NFL) to attempt to resolve their concussion litigation. The NHL agreed to a settlement with approximately 300 former hockey players, who had unsuccessfully attempted to certify their lawsuit as a class action. NHL Players alleged negligence for how the NHL dealt with head injuries, and claimed that the league concealed the long-term risks of head injuries and concussions. In the NFL, reports have shown an increasing number of retired NFL players who have suffered concussions and developed memory and cognitive issues, including chronic traumatic encephalopathy (CTE). To date, researchers have diagnosed CTE in 110 of 111 former NFL players. At the college level, there is a growing list of legal claims against the National Collegiate Athletic Association for failing to protect athletes from the risks associated with head injuries. For sports law and health law attorneys, concussion litigation is an important issue, particularly as it relates to CTE and second-impact syndrome (SIS).   

Contact sport athletes and military veterans, populations that have a history of repetitive hits to the head have the highest risk of CTE. CTE can only be identified during a postmortem autopsy, but symptoms can be present years before death. SIS occurs when an individual receives a second head injury before recovering from the first, and often leads to permanent disability or sometimes death. Attorneys can play a large role in preventing or helping athletes decrease their risk of concussions. There are several significant federal lawsuits, including at American University, and many state lawsuits that are deciding landmark legal issues. One such case is Schmitz v. NCAA, where the Ohio Supreme Court held that the “discovery rule” allows former athletes to file suit based on traumatic brain injury symptoms that do not manifest until decades after the alleged head trauma occurred. The increase in lawsuits, even when they end in settlement, may lead more athletes to seek compensation and hopefully to minimize the risk of brain injury in sports.

Concussions will continue to be a litigated issue, both at the collegiate and the professional levels. As lawyers, what is our duty to these concussed athletes? And what is the standard of care due to athletes who suffer concussions? Most importantly, litigators need to become familiar with the symptoms of concussions, which can include physical, cognitive, and behavioral changes. Litigators also need to understand the athlete’s pre- and post-concussion cognitive abilities, along with understanding the severity and short- and long-term effects of a concussion. Pre-season neurological testing and prior medical history are probably the best tools to determine an athlete’s pre-concussion cognitive abilities. Baseline testing is useful to compare abilities, since it is not meant to be a comprehensive assessment, which can provide an objective baseline measure of the effects of a concussion. Prior medical records also reveal past concussions and anything that may affect an athlete’s abilities, including mental health. During the concussion, litigators can interview witnesses to the concussion and obtain medical records regarding the diagnosis after the concussion. Then, litigators can begin to investigate the diagnosis, and determine whether the athlete meets any of the symptoms of a concussion.

Litigating claims on behalf of concussed athletes is difficult, but the advances of medicine and awareness of symptoms may lead to changes in the law. Going forward, one of the benefits of concussion litigation is that it will likely change how contact sports are played, from youth to professional sports. Litigators who want to protect athletes, along with coaches, should begin to discuss protecting athletes at a young age, even if it removes some of the drama of athletics. Many athletes have lost their lives and lifestyles from CTE and SIS, and we can ensure better protections for budding athletes. 

Leave a Comment

Filed under Uncategorized

Private Equity Investment in Healthcare

“Ten years ago, only a few private equity firms had dedicated healthcare components, but today, nearly everyone does” says Dmity Podpolny of McKinsey & Company, one of the largest consulting firms in the world. Private equity and medicine are now on the rise. For years, private equity firms have invested in healthcare. However now, the rapidity is significant private equity firms increase their presence in a compartmentalized healthcare industry, grasping on alliance opportunities to obtain a better business model. PwC Health Research Institute explains that “private equity’s acquisitions and investments in the health sector have become increasingly diversified and frequent; they include such things as new entrants in technology and convenient care delivery, contract research organizations, and ophthalmology and dermatology practices”.

Last year, private equity continued to move into new medical specialties, according to a 2018 report. The report outlined three major points to consider. The third quarter of 2018 saw roughly $30.4 billion in deal volume, rising 8 percent year-over-year. Private equity will likely continue to push into the health sector, specifically in medical specialty practices. Researchers estimate that industry players have roughly one million dollars to invest in certain businesses. The urgent care realm for example, has grown by 5.8% in 2018. PwC notes that due to the high quantities of these deals involving private equity, other firms may make the decision to sell themselves to these private equity groups to better improve their business model.

Moving forward, this means several things. PwC expects this trend to accelerate even more in 2019, giving conventional healthcare companies various opportunities to sell portions of certain “noncore” assets and really focus on their core functions. Alternatively, conventional healthcare companies could partner with private equity in acquisitions, which they would otherwise be competing against or unable to accomplish without the partnership. 

For example, last month KKR & Co., a private-equity firm, entered into an agreement to purchase Envision Healthcare, an emergency department staffing company. The deal was valued at $9.9 billion, including debt. If approved by shareholders, the deal would be the largest in a string of recent health-care investments by KKR. These investments include an ambulance service, a company that helps treat children with autism, and a creator of various medical devices.

What does this mean? Private equity is accelerating change in the industry. “Private equity investment in healthcare isn’t going to single-handedly improve care quality, enhance the patient experience or reduce healthcare costs to consumers,” PwC stated. “But it likely is fueling the efforts already in place.” Private equity firms bring wealth and knowledge from other industries that can contribute to the healthcare industry’s efforts to rein in costs and achieve better outcomes.

Leave a Comment

Filed under Uncategorized

Expanded Anti-Kickback Protection to Care Paid by Private-Payers

As of October 24, 2018, a new regulation passed that affects the private sector of the health care industry potentially having lasting effects on clinics, laboratories and even marketing companies. Mirroring the federal Anti-Kickback Statute, the Eliminating Kickbacks in Recovery Act (“EKRA”) aims to fight the opioid epidemic. In particular, EKRA expanded the federal Anti-Kickback criminal statute by expanding it to cover payments by private insurance companies for claims submitted induced by a kickback, whereas the federal Anti-Kickback statute only covers payments made by the state or the federal government. Under EKRA, Congress applies health care fraud laws concerning improper remunerations for patient referrals to, or in exchange for an individual using the services of, a recovery home, clinical treatment facility or clinical laboratory. Absent a prescribed exception, the rule punishes any person or entity that knowingly and willingly offers, pays, solicits, or receives, directly or indirectly, anything of value to induce a referral of an individual, or in exchange for an individual using the services of a laboratory, clinical treatment facility, or recovery home.

EKRA provides several exceptions to the referral prohibition, including but not limited to:

  1. A discount or other reduction in price obtained by a provider of services or other entity under a health care benefit program if the reductions are properly disclosed and reflected in the costs claimed or charges made.
  2. Payments to employees and independent contractors that are not determined by or do not vary by . . . 
    1. The number of individuals referred to a particular recovery home, clinical treatment facility, or laboratory;
    1. The number of tests or procedures performed; or
    1. The amount billed to or received from, in part or in whole, the health care benefit program from the individuals referred to a particular recovery home, clinical treatment facility, or laboratory;

Why was EKRA implemented?

With the current opioid crisis affecting all parts of the country, EKRA was created, in part, to help curb improper patient brokering practices in all payor sectors of health care. Patient brokering occurs when a drug rehab or similar facility pays a third party to bring patients to their establishment. These unethical business practices benefit from the vulnerability of substance abusers.

What does this mean for private clinics, laboratories, treatment facilities and health care providers in general?

Because EKRA’s broad language includes a wide array of healthcare providers, many business relationships may fall under the purview of the statutory language. Examples of improper business relationships that fall within the statutory language may include serving as a medical director for a laboratory to whom a provider makes patient referrals or a business relationship with a marketing company whose job it is to steer patients to certain health care providers, such as, a clinical home or treatment center. A problem arising from EKRA is that the statute may make certain employment areas subject to criminal prosecution, such as the marketing company example provided above. However, unlike the Anti-Kickback Statute, EKRA levels the playing field by making payments made by private insurance subject to criminal prosecution.

Under EKRA, the maximum penalty per offense of illegal remunerations paid by recovery homes, clinical treatment facilities, or clinical laboratories, can result in fines of $200,000 and 20 years of imprisonment for each occurrence.

Overall, EKRA may cause companies to tread lightly in their business relationships with medical companies because now companies are subject to anti-kickback statues no matter who pays for the care (public or private insurance). However, implementation of this statute has removed the financial incentive from an all payor industry. As such, EKRA helps create a solution to one aspect of the opioid crisis by subjecting care paid by both private and public healthcare insurance to criminal prosecution for illegal remunerations.

Leave a Comment

Filed under Uncategorized

Cosmetic Regulation in the U.S.: Is the FDA doing enough?

The Food and Drug Administration (FDA) has had authority over cosmetics since the passing of the Food, Drug, and Cosmetic Act (FDCA) in 1938. However, this authority is based only in regulatory power, not approval power. The FDCA does not require cosmetics to acquire pre-market approval, except for cosmetics that have color additives like medical devices and drugs; instead, the FDA uses post-market regulation to bring formal or informal proceedings against a product.The FDA’s authority over the cosmetic industry, which generated approximately $84 billion in revenue in 2016, is substantially different than any other industry area the Agency regulates. 

The FDCA defines cosmetics as any product that is “intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body…for cleansing, beautifying, promoting attractiveness, or altering the appearance.” This includes the obvious, such as moisturizers and facial makeup, but also the nonobvious, such as deodorant and permanent hair waves.  Under this definition, the category of cosmetics encompasses things that both women and men use on a daily basis.  

So how does FDA regulate cosmetics? The FDCA prohibits the marketing of cosmetics that have been adulterated or misbranded. Adulteration address violations involving product composition whereas misbranding addresses improperly labeled or deceptively packaged products. However, the main issue with cosmetics is safety. The FDA states that “companies and individuals who manufacture or market cosmetics have a legal responsibility to ensure the safety of their products,” however “[no] FDA regulation require specific tests to demonstrate the safety of individual products or ingredients.” Companies can use “whatever testing necessary” to guarantee safety. Companies can rely upon already available test data on individual ingredients and similar product formulations or perform their own test for additional information. Even if companies conduct thorough safety testing, “the law also does not require cosmetic companies to share their safety information with FDA.” 

An optimistic approach to FDA regulation would require consumers to fully believe that cosmetic companies conduct thorough safety testing. Since a company’s reputation is on the line, testing for safety is, or should be, a company’s top priority. That is why some dermatologists believe that cosmetics are already safe and that more regulation would be unnecessary. Some also argue that stricter regulation could stifle innovation. Every year there is a new ingredient craze that rocks the cosmetic world.  With stricter regulations, these new ingredients would have to pass through extensive testing which could disincentivize innovation, lead to poorer products, and potentially increase costs. 

Since the industry self-polices, the FDA has to rely on direct reports and complaints from consumers before it can act. For example, in 2014 the FDA launched an investigation into Wen Hair Care after it received about 1,400 complaints about adverse side effects of the hair care products, like hair loss and balding. During its investigation, the FDA learned that Wen Hair Care actually received over 20,000 complaints from consumers before FDA was alerted. Under the FDCA, the FDA could only go after the Wen Hair Care if the products were determined to be adulterated or misbranded. However, if adulterations or misbranding is not the issue, then what can the FDA do? Short of seizing the products to keep them off the market, nothing. 

Current cosmetic regulation might be changing in the near future, though. There are more and more consumers that are looking for health-conscious and clean cosmetic products. Congress has also made a push toward increasing cosmetic safety. In 2017, Senators Dianne Feinstein and Susan Collins introduced a bipartisan proposal that included mandatory reporting and ingredient review of all cosmetics. Also, in 2018, Congresswoman Jan Schakowsky introduced a bill that “…calls for the full disclosure of all ingredients included in beauty and personal care products including fragrances.” While these bills are stirring around in Congress, major cosmetic brands like L’Oréal and Unilever, as well as celebrities like Kourtney Kardashian offer their support for stronger regulation.

 In 2018, Rep.Frank Pallone stated that “[w]hile all other product categories regulated by the [FDA] have been updated to keep pace with innovation and consumer expectations, the laws for cosmetics have been left untouched for nearly 80 years.” Maybe it is time for a change.  

Leave a Comment

Filed under Uncategorized

The FDA and Insulin: Biologic and Biosimilar Pricing

The United States is the most expensive market for biologic drugs, including insulin, despite initiatives devised by the Food and Drug Administration (FDA) and the Affordable Care Act. For more than a decade, the biosimilars market in the US has lagged behind the European market, whose medicines are as much as 80 percent cheaper. The Biologics Price Competition and Innovation Act (BPCIA), a provision in the 2010 Affordable Care Act, authorized the FDA to create a new regulatory scheme to approve biosimilars, which are products designed to work like biologics that have already been licensed. In 2015, the FDA approved the first biosimilar, Basaglar (a type of insulin), and by 2017, there were three marketed biosimilars and two more that had been approved. The development of biosimilars is intended to increase competition among biologic manufacturers and drive down prices and making products like insulin more accessible.

Despite the BPCIA and approval of biosimilars like Basaglar, the cost of insulin has continued to skyrocket, and the FDA proposed a new classification system to address soaring prices. In December, FDA Commissioner Scott Gottlieb unveiled a plan to classify insulin as a biologic as opposed to its previous classification as a drug. In doing so, biosimilar drug makers will be enabled to develop biosimilars that can be substituted for the original biologic. Although Gottlieb’s proposal will likely not go into effect until March 2020, the new classification scheme could create competition in what is currently a limited marketplace of insulin, thus driving down the cost for the millions of Americans with diabetes.

As of now, the insulin market is dominated by three manufacturers: Sanofi, Novo Nordisk, and Eli Lilly. Due to their market dominance, these three companies have driven up the cost of insulin, which has tripled between 2002 and 2013 and doubled between 2012 and 2016. Sanofi, Novo Nordisk, and Eli Lilly have faced immense scrutiny due to the price hikes, and criticism peaked when Minnesota Attorney General Lori Swanson filed a legal salvo against the manufactures for their “deceptive” practices. With the issue of insulin pricing entering the public eye, it is clear changes must be made.

Gottlieb’s proposal, designed to implement the intent of Congress, will address pricing standards in three ways. The first step is to extend the anti-evergreening provisions, which are meant to prevent manufacturers from having exclusivity and forestalling competition, to the newly deemed biologics and biosimilars. The next step is to address patent exclusivity and to stop twelve years of exclusivity once the current terms expire. Lastly, the proposal intends to offer guidance to current manufacturers when they submit a New Drug Application for approval under the Food, Drug, & Cosmetic Act (FDCA). This guidance will offer standards for transitioning a product from the drug pathway to the biologic pathway so that it meets the requirements of the Public Health Safety Act and section 505 of the FDCA. With these changes afoot, the FDA and Congress will hopefully make strides in addressing the current high cost of insulin and allow for new biosimilar manufacturers to enter the market, thus significantly benefitting the millions of Americans with diabetes.

Leave a Comment

Filed under Uncategorized