Justia Health Law Opinion Summaries

In 2024, Iowa enacted legislation (HF 2677) prohibiting the manufacture and sale of electronic nicotine delivery systems (ENDS) that had not received marketing authorization from the United States Food and Drug Administration (FDA). The law required manufacturers to certify their compliance with federal premarket approval requirements or demonstrate that their products were pending FDA review. Several manufacturers, retailers, and consumers challenged the law, contending it was preempted by federal law, specifically the Family Smoking Prevention and Tobacco Control Act, and that it violated constitutional equal protection guarantees.The United States District Court for the Southern District of Iowa granted a preliminary injunction, halting enforcement of the law. The district court found that at least one plaintiff had standing, was likely to succeed on the merits of the preemption claim, and was not required to post a security bond. It dismissed claims against the Iowa Department of Revenue based on Eleventh Amendment immunity but allowed the case to proceed against the Director in her official capacity. The Department voluntarily stayed enforcement while the litigation continued.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s order. The Eighth Circuit held that at least one retailer plaintiff had Article III standing, as they plausibly alleged injury from the credible threat of enforcement. However, the appellate court concluded the plaintiffs were not likely to succeed on the merits of their preemption claim. The court determined that HF 2677 was not preempted by federal law, as it fell within the scope of the Tobacco Control Act’s savings clause, which permits state requirements relating to the sale and distribution of tobacco products. The Eighth Circuit vacated the preliminary injunction and remanded the case for further proceedings. View "Iowans for Alternatives v. Mosiman" on Justia Law

Buyers of over-the-counter nasal decongestants containing oral phenylephrine brought numerous class actions against drug manufacturers and retailers, alleging that for years these companies sold and advertised decongestant products they knew to be ineffective. The plaintiffs claimed that scientific studies, particularly since 2016, had shown oral phenylephrine to be no better than a placebo at relieving congestion, yet the companies continued to market their products as effective decongestants and complied with Food and Drug Administration (FDA) labeling requirements. The FDA, despite mounting evidence, did not remove oral phenylephrine’s designation as an effective decongestant under its regulations.The Judicial Panel on Multidistrict Litigation consolidated nearly one hundred class actions and transferred them to the United States District Court for the Eastern District of New York. Plaintiffs filed a complaint asserting New York statutory and common-law claims as well as a federal RICO claim. The district court granted the defendants’ motion to dismiss, holding that the Federal Food, Drug, and Cosmetic Act (FDCA) expressly preempted the state law claims because the drugs’ labels complied with FDA requirements, and that the plaintiffs lacked standing to bring the RICO claim. The court also dismissed a Lanham Act claim brought by one pharmacy plaintiff.On appeal, the United States Court of Appeals for the Second Circuit held that the FDCA expressly preempts most of the state law claims because the federal regime requires manufacturers to follow the FDA-approved labeling, but it vacated the dismissal for claims regarding “Maximum Strength” labeling and brand-name drugs approved via the New Drug Application process, remanding those for further proceedings. The court affirmed dismissal of the RICO claim, adopting the indirect purchaser rule, and upheld denial of the pharmacy’s motion for reconsideration regarding its Lanham Act claim. View "Yousefzadeh v. Johnson & Johnson Consumer Inc." on Justia Law

A hospice provider participated in the Medicare program and sought reimbursement for hospice services provided to several patients. Medicare, through its contractor, conducted a review and determined that a substantial number of the provider's claims did not meet the required coverage criteria, resulting in a demand for repayment of nearly $1 million. The contractor’s decision was partially reversed at the next level of administrative review for some claims, but a significant number were still denied. The provider pursued further administrative appeals, including a hearing before an administrative law judge (ALJ), where testimony and medical records were considered. The ALJ ultimately found that some additional claims were covered but upheld the denial of coverage for others, concluding that the provider was financially responsible for those denied claims and could not benefit from the statutory safe harbor.After the Medicare Appeals Council failed to resolve the provider’s appeal within the prescribed time, the provider sought judicial review in the United States District Court for the Northern District of Ohio. The district court affirmed the ALJ’s decision, agreeing with the denial of coverage for the disputed claims and with the determination that the provider was not entitled to the safe harbor protection.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed two issues: whether substantial evidence supported the ALJ’s denial of Medicare coverage for the claims, and whether the ALJ properly applied the Medicare statute’s safe harbor provision. The appellate court held that substantial evidence did support the denial of coverage. However, it determined that the ALJ had applied the wrong legal standard to the safe harbor inquiry. The Sixth Circuit clarified that the correct standard requires assessment of whether the provider reasonably interpreted the relevant Medicare guidance as covering the disputed claims. The court vacated the district court’s judgment as to the safe harbor issue and remanded with instructions to return the case to the ALJ for application of the correct safe harbor standard to each disputed claim. View "In Home Health, LLC v. Kennedy" on Justia Law

The plaintiff participated in a clinical trial for an experimental COVID-19 vaccine manufactured by AstraZeneca in November 2020. Before receiving the vaccine, she signed an informed-consent form stating that AstraZeneca would compensate her for injuries caused by the vaccine, including providing medical care and reimbursement, and that the company had an insurance policy to cover such costs. The form also disclosed that federal law may limit her right to sue for vaccine-related injuries, referencing the Public Readiness and Emergency Preparedness Act (PREP Act), which provides broad immunity to vaccine manufacturers during a public health emergency.After suffering debilitating medical injuries from the vaccine, the plaintiff requested compensation and care from AstraZeneca, which was denied. She then filed suit in the United States District Court for the District of Utah, alleging breach of contract and breach of the contractual duty of good faith and fair dealing. AstraZeneca moved to dismiss the complaint, arguing that the PREP Act immunized it from liability. The district court denied the motion, holding that the PREP Act’s immunity provision applies only to tort claims, not to contract-based claims. The court further reserved judgment on whether AstraZeneca had waived its statutory immunity in the informed-consent form.The United States Court of Appeals for the Tenth Circuit reviewed the case and reversed the district court’s ruling. The appellate court held that the PREP Act’s immunity provision applies to “all claims for loss,” including those arising from breach of contract, provided they bear a causal relationship to the administration or use of a covered countermeasure like a vaccine. The court remanded the case for the district court to consider whether AstraZeneca waived immunity in the informed-consent form. View "Dressen v. AstraZeneca AB" on Justia Law

The plaintiff, an advocacy organization representing nurse anesthetists, filed suit against the Secretary and Department of Health and Human Services (HHS) after several private insurers reduced reimbursement rates for nurse anesthetists practicing independently, compared to physician anesthesiologists. The plaintiff alleged these lower rates violated a nondiscrimination provision in the Affordable Care Act (ACA), which prohibits insurers from discriminating against healthcare providers acting within the scope of their license. The ACA assigns primary enforcement of this provision to the states, but allows HHS to intervene if a state fails to enforce it. The plaintiff sought a writ of mandamus compelling HHS to enforce the provision and also asserted a claim under the Administrative Procedure Act for agency action unlawfully withheld or unreasonably delayed.The United States District Court for the Northern District of Ohio granted HHS’s motion to dismiss, concluding that the plaintiff lacked standing. The court found the plaintiff had not adequately established that its members had suffered a cognizable injury or that any alleged injury was traceable to HHS’s conduct.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed the district court’s dismissal de novo. The Sixth Circuit determined that even if the plaintiff’s members had experienced monetary harm, they failed to show that the harm was caused by HHS’s alleged nonenforcement, as it was the insurers—not HHS—that set the reimbursement rates. The court found the causal link between government inaction and insurers’ decisions too speculative. Additionally, the court held that any relief ordered by the court would not likely redress the alleged injuries, given the discretionary nature of enforcement and uncertainty about how insurers would respond. Therefore, the Sixth Circuit affirmed the district court’s dismissal for lack of standing. View "Am. Ass'n of Nurse Anesthesiology v. Kennedy" on Justia Law

Several third-party payors who covered prescriptions for Avandia, a diabetes medication manufactured by GlaxoSmithKline LLC, brought a putative class action alleging that the company misrepresented Avandia’s cardiovascular risks and benefits. They claimed these misrepresentations led health care providers to prescribe Avandia more frequently than less expensive alternatives, causing the payors to reimburse for prescriptions that otherwise would not have been issued. The plaintiffs sought class certification on behalf of entities that paid for Avandia prescriptions during a specified period.The United States District Court for the Eastern District of Pennsylvania previously reviewed this case. It denied GlaxoSmithKline’s motion to dismiss the plaintiffs’ Racketeer Influenced and Corrupt Organizations Act (RICO) claim, and the Third Circuit affirmed that denial. Later, the District Court granted summary judgment to GlaxoSmithKline on certain claims, but the Third Circuit reversed in part and remanded for further proceedings. Most recently, the District Court granted class certification, finding the class ascertainable and concluding that common issues would predominate regarding causation. It relied on evidence of a common scheme to deceive and statistical analyses showing marketing campaigns increased prescriptions.The United States Court of Appeals for the Third Circuit reviewed the District Court’s class certification. The Third Circuit held that while the class is ascertainable, the record does not yet demonstrate that common questions predominate on causation. The court clarified that plaintiffs in pharmaceutical fraud RICO class actions may use statistical evidence to prove causation, but such evidence must establish causation, not merely correlation. Because the plaintiffs’ statistical evidence failed to satisfy this standard, the Third Circuit vacated the District Court’s class certification and remanded for further fact-finding on predominance under the clarified standard. View "In re Avandia Marketing" on Justia Law

Several pharmaceutical manufacturers participating in the federal 340B program, which requires them to provide discounted drugs to qualifying healthcare providers, proposed changing how they fulfill this obligation. Historically, these manufacturers complied by offering upfront discounts on eligible drug purchases. In 2024, they sought to implement a new rebate model, where providers would purchase drugs at full price and receive a post-purchase rebate to reach the required discounted price. The Secretary of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), responded that such rebate mechanisms had not been approved for these entities, requested further information, and stated that the manufacturers could not move forward with the new models without official approval.The manufacturers sued the Secretary in the United States District Court for the District of Columbia, arguing that the statute allowed them to unilaterally implement rebate models unless expressly disapproved by the Secretary. Advocacy groups and hospitals intervened, contending that rebate models were not permitted at all. The district court granted summary judgment for the Secretary, concluding that manufacturers could not implement such rebate systems without prior approval.Upon review, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s judgment. The appellate court held that the statutory text of Section 340B permits rebate models but requires the Secretary to affirmatively provide for such mechanisms before manufacturers may implement them. The court found that the statute vests authority in the Secretary to determine acceptable pricing mechanisms and that manufacturers cannot act unilaterally in this regard. Because the Secretary had not approved the proposed rebate models, the court concluded that the manufacturers’ intended implementation was properly blocked. The appellate court therefore affirmed the district court’s decision in favor of the Secretary. View "Novartis Pharmaceuticals Corporation v. Kennedy" on Justia Law

Alignment Healthcare, a private health insurer offering Medicare Advantage plans, challenged the accuracy of its star ratings issued by the Centers for Medicare & Medicaid Services (CMS) for two of its contracts. The ratings are partly determined by an annual survey of enrollees, and Alignment claimed that a significant drop in Spanish-language responses resulted from errors in survey administration—specifically, that some Spanish-speaking enrollees received the survey in English despite indicating a preference for Spanish. Alignment argued that this error negatively affected its ratings, as its internal data showed higher satisfaction among Spanish-speaking enrollees.After receiving preliminary survey results in September 2024, Alignment raised these concerns with CMS, requesting a review of the sampling methodology and suppression of the disputed survey data. CMS reviewed the sampling and response data, consulted with the survey vendor, and ultimately found no evidence of a survey administration error. CMS noted that Spanish-speaking enrollees had access to Spanish-language surveys and that the rates of Spanish responses were higher than average. CMS denied Alignment’s requests for data suppression or further validation, stating it had no authority to remove the results absent evidence of protocol violations.Alignment then filed suit under the Administrative Procedure Act in the United States District Court for the District of Columbia, which granted summary judgment for CMS. On appeal, the United States Court of Appeals for the District of Columbia Circuit reviewed the district court’s decision de novo. The appellate court held that Alignment failed to demonstrate that CMS’s actions were arbitrary or capricious or that survey protocols had been violated. The court found CMS’s investigation and explanation adequate, rejected Alignment’s contentions regarding unequal treatment and nondelegation, and affirmed the district court’s grant of summary judgment to CMS. View "Alignment Healthcare Inc. v. HHS" on Justia Law

A laboratory testing company, Boston Heart Diagnostics (BHD), and two rural Texas hospitals, Little River Health Care and Integrity Transitional Hospital, entered into arrangements where affiliated physicians referred blood tests to the hospitals, which then billed payors, including Medicare, at advantageous rates. The hospitals used Management Service Organizations (MSOs) as intermediaries to recruit and pay physicians, and BHD’s sales team—including several defendants—facilitated these relationships. Evidence at trial showed MSOs were used to provide kickbacks to physicians based on referral volume, disguised through sham contracts, resulting in unusually high revenues for BHD. The defendants included BHD’s CEO, vice president of sales, and sales representatives, who were involved in managing and growing these partnerships.A federal grand jury indicted eighteen individuals for conspiracy to commit illegal remunerations in violation of the Anti-Kickback Statute (AKS) and 18 U.S.C. § 371. Five defendants proceeded to a joint jury trial in the United States District Court for the Eastern District of Texas. The government presented testimony from co-conspirators and documentary evidence to show the existence of the scheme and the defendants’ knowledge and participation. The jury found all five guilty of conspiracy. The court denied post-trial motions for acquittal or a new trial, sentenced the defendants, and four of them appealed.The United States Court of Appeals for the Fifth Circuit reviewed the sufficiency of the evidence de novo and other claims under deferential standards. The court affirmed all convictions, holding that a rational jury could find beyond a reasonable doubt that the defendants knowingly and willfully joined a conspiracy to pay illegal kickbacks to induce referrals for federally insured patients. The court also held there was sufficient evidence of a federal nexus and no error in the district court’s handling of jury notes or instructional refusals. The convictions and sentences were affirmed. View "USA v. Theiler" on Justia Law

Several pharmaceutical manufacturers and a trade association challenged a Louisiana statute enacted in 2023, which prohibits drug manufacturers and distributors from interfering with the acquisition or delivery of discounted drugs—purchased under the federal Section 340B Drug Pricing Program—to pharmacies contracted by certain healthcare providers. The 340B Program requires drug manufacturers participating in Medicaid and Medicare to provide discounted outpatient drugs to designated healthcare providers serving low-income and rural populations. Many of these providers lack in-house pharmacies and use external contract pharmacies. In response to manufacturer-imposed limits on contract pharmacy use, Louisiana enacted Act 358 to preserve covered entities’ ability to use such pharmacies.The plaintiffs, including AbbVie, AstraZeneca, and the Pharmaceutical Research and Manufacturers of America, filed separate lawsuits in the United States District Court for the Western District of Louisiana against the Louisiana Attorney General, arguing that Act 358 is preempted by federal law, constitutes an unconstitutional taking, impairs contracts in violation of the Contracts Clause, and is unconstitutionally vague. The district court consolidated the cases, granted summary judgment for Louisiana and the Louisiana Primary Care Association (an intervenor), and rejected all of the manufacturers’ claims.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s judgment. The Fifth Circuit held that Act 358 is not preempted by federal law, as the federal 340B Program does not regulate drug distribution logistics or the use of contract pharmacies, and thus leaves room for state regulation. The court further concluded that Act 358 does not effect a taking under the Fifth Amendment, does not substantially impair contractual obligations under the Contracts Clause, and is not unconstitutionally vague under the Due Process Clause. The Fifth Circuit thus upheld summary judgment for Louisiana on all claims. View "AbbVie v. Murrill" on Justia Law