Justia Health Law Opinion Summaries

Novartis Pharmaceuticals Corporation manufactures Entresto, a drug used to treat chronic heart failure. MSN Pharmaceuticals, Inc. sought approval from the Food and Drug Administration (FDA) to market a generic version of Entresto by submitting an abbreviated new drug application (ANDA). MSN’s application excluded certain methods of use protected by Novartis’s patents and claimed that the generic drug contained the same active ingredients as Entresto. The FDA approved MSN’s application, prompting Novartis to challenge the approval, arguing that the generic’s labeling and composition were unlawfully different from Entresto.The United States District Court for the District of Columbia reviewed Novartis’s claims under the Administrative Procedure Act. Novartis argued that the FDA’s approval of MSN’s ANDA and denial of Novartis’s citizen petitions were arbitrary and capricious, particularly regarding the omission of patented dosing regimens and indications from the generic’s label, and the determination that the generic contained the same active ingredients as Entresto. The district court granted summary judgment in favor of the FDA, finding that the agency’s actions were reasonable and consistent with statutory and regulatory requirements. Novartis appealed this decision.The United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s judgment. The appellate court held that the FDA reasonably concluded the generic drug’s labeling changes were permissible to avoid patent infringement and did not render the generic less safe or effective for non-patented uses. The court also found that the FDA’s determination that the generic and Entresto shared the same active ingredients was supported by scientific evidence and regulatory guidance. The court applied de novo review to legal questions and deferred to the FDA’s scientific expertise, ultimately upholding the agency’s approval of MSN’s ANDA. View "Novartis Pharmaceuticals Corp. v. Kennedy" on Justia Law

An employee at a hospital operated by the University of California, Los Angeles (UCLA Health) photographed confidential patient information and posted it to his personal Instagram account, despite having received training and signing agreements to protect patient privacy. Although the employee redacted some information, personal details of ten patients remained visible. The hospital responded by placing the employee on administrative leave, ultimately terminating him, notifying affected patients, and reiterating privacy policies to staff. No patients reported adverse consequences from the disclosure.The California Department of Public Health investigated and imposed a $75,000 penalty on the hospital, finding a violation of Health and Safety Code section 1280.15, which requires health facilities to prevent unauthorized disclosure of patient medical information. An administrative law judge (ALJ) upheld the Department’s finding and penalty, interpreting section 1280.15 as imposing strict liability for any unauthorized disclosure, regardless of whether the hospital had implemented appropriate safeguards. The ALJ noted that the Department did not find a violation of section 1280.18, which requires reasonable safeguards, but still held the hospital responsible. The Department adopted the ALJ’s decision.The Regents of the University of California challenged the decision in the Superior Court of Sacramento County, seeking a writ of administrative mandate and declaratory relief. The trial court ruled in favor of the hospital, holding that a violation of section 1280.15 cannot occur without a concurrent violation of section 1280.18, thus importing a reasonableness standard into section 1280.15. The court ordered the Department to vacate its decision and remanded the matter.On appeal, the California Court of Appeal, Third Appellate District, affirmed the trial court’s judgment. The court held that section 1280.15 is not a strict liability statute; liability requires a failure to implement reasonable safeguards as mandated by section 1280.18. The hospital was not liable absent proof of such a failure. View "Regents of the Univ. of Cal. v. State Dept. of Public Health" on Justia Law

A licensed veterinarian developed and manufactured undetectable performance enhancing drugs (PEDs) for use in professional horse racing, selling them to trainers who administered them to horses to gain a competitive edge. His salesperson assisted in these activities, operating a company that distributed the drugs without prescriptions or FDA approval. The drugs were misbranded or adulterated, and the operation involved deceptive practices such as misleading labeling and falsified customs forms. The PEDs were credited by trainers for their horses’ successes, and evidence showed the drugs could be harmful if misused.The United States District Court for the Southern District of New York presided over two separate trials, resulting in convictions for both the veterinarian and his salesperson for conspiracy to manufacture and distribute misbranded or adulterated drugs with intent to defraud or mislead, in violation of the Food, Drug, and Cosmetic Act. The district court denied motions to dismiss the indictment, admitted evidence from a prior state investigation, and imposed sentences including imprisonment, restitution, and forfeiture. The court calculated loss for sentencing based on the veterinarian’s gains and ordered restitution to racetracks based on winnings by a coconspirator’s doped horses.On appeal, the United States Court of Appeals for the Second Circuit held that the statute’s “intent to defraud or mislead” element is not limited to particular categories of victims; it is sufficient if the intent relates to the underlying violation. The court found no error in the admission of evidence from the 2011 investigation or in the use of gain as a proxy for loss in sentencing. However, it vacated the restitution order to racetracks, finding no evidence they suffered pecuniary loss, and vacated the forfeiture order, holding that the relevant statute is not a civil forfeiture statute subject to criminal forfeiture procedures. The convictions and sentence were otherwise affirmed. View "United States v. Fishman" on Justia Law

After the Washington Medical Commission adopted a policy to discipline physicians for spreading COVID-19 “misinformation,” several plaintiffs—including physicians who had been charged with unprofessional conduct, physicians who had not been charged, and advocacy organizations—filed suit. The Commission’s actions included investigating and charging doctors for public statements and writings about COVID-19 treatments and vaccines. Some plaintiffs, such as Dr. Eggleston and Dr. Siler, were actively facing disciplinary proceedings, while others, like Dr. Moynihan, had not been charged but claimed their speech was chilled. Additional plaintiffs included a non-profit organization and a public figure who alleged their right to receive information was affected.The United States District Court for the Eastern District of Washington dismissed the plaintiffs’ First Amended Complaint. The court found that the claims were constitutionally and prudentially unripe, and that the doctrine of Younger abstention required federal courts to refrain from interfering with ongoing state disciplinary proceedings. The district court also addressed the merits, concluding that the plaintiffs failed to state a plausible First Amendment or due process claim, but the primary basis for dismissal was abstention and ripeness.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The Ninth Circuit held that Younger abstention barred claims challenging ongoing state disciplinary proceedings (including as-applied and facial constitutional challenges, and due process claims) for all plaintiffs subject to such proceedings. The court also held that Younger abstention did not apply to claims for prospective relief by plaintiffs not currently subject to proceedings, but those claims were constitutionally and prudentially unripe because no concrete injury had occurred and further factual development was needed. The Ninth Circuit thus affirmed the dismissal of all claims. View "STOCKTON V. BROWN" on Justia Law

A group of drug manufacturers that participate in the federal Section 340B program challenged a Mississippi law, H.B. 728, which prohibits manufacturers from interfering with healthcare providers’ use of contract pharmacies to distribute discounted drugs to low-income and uninsured patients. The manufacturers argued that the law compels them to transfer drugs at a discount to private, for-profit pharmacies and expands their obligations under federal law, potentially enabling improper resale of discounted drugs. They sought a preliminary injunction to prevent the law from taking effect, claiming it constituted an unconstitutional taking and was preempted by federal law.The United States District Court for the Southern District of Mississippi denied the manufacturers’ motion for a preliminary injunction. The court found that the manufacturers had not demonstrated a substantial likelihood of success on the merits of their takings or preemption claims, and thus were not entitled to preliminary injunctive relief. The manufacturers appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s denial of a preliminary injunction for abuse of discretion, applying clear error review to factual findings and de novo review to legal conclusions. The Fifth Circuit affirmed the district court’s decision, holding that the manufacturers had not shown a substantial likelihood of success on their claims. The court concluded that H.B. 728 did not effectuate a physical or regulatory taking, nor was it preempted by federal law under either field or conflict preemption theories. The court emphasized that, on the record presented, the manufacturers had not met their burden to justify the extraordinary remedy of a preliminary injunction. The district court’s denial of injunctive relief was therefore affirmed. View "AbbVie v. Fitch" on Justia Law

A group of plaintiffs, including a medical practice, individual physicians, a medical society, and two patients, brought various claims against a health insurer, alleging that the insurer interfered with doctor-patient relationships, denied or delayed coverage for medical services, and caused significant harm to patients. The claims included tortious interference with contractual rights, unfair competition, RICO violations, and emotional distress, with specific factual allegations that the insurer’s actions led to worsened medical outcomes for the patients involved.The Circuit Court of the Third Circuit reviewed the insurer’s motion to compel arbitration based on arbitration clauses in provider agreements and member handbooks. Instead of determining whether the claims were subject to arbitration, the circuit court focused on the alleged unconscionability of the contracts as a whole, finding them to be contracts of adhesion and unconscionable, and denied the motion to compel arbitration. The court also denied summary judgment as to one patient’s claims and did not stay the medical society’s claims pending arbitration.The Supreme Court of the State of Hawaiʻi reviewed the case and held that the circuit court erred by not following the required analytical framework for arbitrability. The Supreme Court vacated the lower court’s order in part, holding that claims arising under the Participating Physician Agreement must be referred to arbitration because the agreement delegated the question of arbitrability to the arbitrator. Claims under the Medicare and QUEST Agreements were also subject to arbitration, as the arbitration clauses were not shown to be substantively unconscionable. However, the Court held that the claims of one patient and the physician as a patient were not subject to mandatory arbitration, and another patient’s claims were not subject to a grievance and appeals clause. The case was remanded for further proceedings consistent with these holdings. View "Frederick A. Nitta, M.D., Inc. v. Hawaii Medical Service Association." on Justia Law

Central Vermont Medical Center (CVMC) submitted its proposed budget for fiscal year 2025, seeking an 11.9% increase in net patient service revenue (NPR) and a 5.5% increase in commercial rates, both of which exceeded the benchmarks set by the Green Mountain Care Board. The Board’s benchmarks, established in its annual guidance, were 3.5% for NPR growth and 3.4% for commercial rate growth. The Board required hospitals exceeding these benchmarks to provide credible justification, such as evidence of improved access or quality of care. CVMC’s submission was reviewed through hearings and public comment, during which the Board found that CVMC’s justifications were insufficient, particularly regarding efficiency, productivity, and cost containment.The Green Mountain Care Board, after considering the evidence and statutory obligations, modified CVMC’s budget, allowing a 6% NPR growth and a 3.4% commercial rate increase. The Board found that CVMC could achieve financial sustainability through cost reductions and improved productivity rather than higher price increases. The Board imposed specific terms and conditions on the budget, emphasizing the need for efficient operations and balancing financial needs with statewide health care affordability and access.On appeal, the Vermont Supreme Court reviewed the Board’s decision under a deferential standard, presuming the Board’s actions valid unless shown otherwise by clear and convincing evidence. The Court rejected CVMC’s arguments that the Board acted with unfettered discretion, violated procedural due process, or was required to regulate on a per-capita basis. The Court found that the Board’s process was guided by statutory standards, rules, and annual guidance, and that CVMC had adequate notice and opportunity to participate. The Supreme Court of Vermont affirmed the Board’s decision. View "In re Central Vermont Medical Center Fiscal Year 2025" on Justia Law

A pharmaceutical company challenged provisions of the Inflation Reduction Act of 2022, which established a program requiring the Department of Health and Human Services, through the Centers for Medicare and Medicaid Services (CMS), to negotiate maximum fair prices for certain high-cost prescription drugs covered by Medicare. The company’s drug was selected for the program, and it signed the required agreements to participate. The program imposes significant penalties and an excise tax on manufacturers who do not comply, but allows manufacturers to exit Medicare and Medicaid programs to avoid the tax, a process the company argued was not a realistic option.After its drug was selected, the company filed suit in the United States District Court for the District of New Jersey, alleging that the program violated the Eighth Amendment’s Excessive Fines Clause, the Fifth Amendment’s Takings Clause, and the First Amendment’s Free Speech Clause. The District Court granted summary judgment for the government, holding that participation in the program is voluntary and that the program primarily regulates conduct, not speech. The court also found it lacked jurisdiction over the Eighth Amendment claim due to the Tax Anti-Injunction Act and the Declaratory Judgment Act.On appeal, the United States Court of Appeals for the Third Circuit affirmed. The court held that the company’s Eighth Amendment claim was barred by the Tax Anti-Injunction Act and the Declaratory Judgment Act, as the relief sought would restrain the assessment or collection of a federal tax. The court further held that the program does not violate the Takings Clause or the First Amendment, relying on its recent precedent. The judgment of the District Court was affirmed. View "Novartis Pharmaceuticals Corp v. Secretary Department of Health" on Justia Law

A pharmaceutical company participated in a federal program that required it to report the average price it received for drugs sold to wholesalers, which in turn affected the rebates it owed the government under Medicaid. From 2005 to 2017, the company sold drugs to wholesalers at an initial price, but if it raised the price before the wholesaler resold the drugs to pharmacies, it required the wholesaler to pay the difference. The company reported only the initial price as the average manufacturer price (AMP), excluding the subsequent price increases, which resulted in lower reported AMPs and thus lower rebate payments to the government. The company justified this exclusion by categorizing the price increases as part of a bona fide service fee to wholesalers, even though the increased value was ultimately paid by pharmacies.The United States District Court for the Northern District of Illinois reviewed the case after a qui tam action was filed by a relator, who alleged that the company’s AMP calculations were false and violated the False Claims Act (FCA). The district court granted summary judgment to the relator on the issue of falsity, finding the AMP calculations and related certifications were factually and legally false. The issues of scienter (knowledge) and materiality were tried before a jury, which found in favor of the relator and awarded substantial damages. The company appealed, challenging the findings on falsity, scienter, and materiality, while the relator cross-appealed on the calculation of the number of FCA violations.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The court held that the company’s exclusion of price increase values from AMP was unreasonable and contradicted the plain language and purpose of the relevant statutes, regulations, and agreements. The court also held that the jury reasonably found the company acted knowingly and that the false AMPs were material to the government’s payment decisions. The court rejected the cross-appeal on damages, finding the issue was not properly preserved for appeal. View "Streck v Eli Lilly and Company" on Justia Law

A company alleged that a manufacturer of cardiac rhythm devices engaged in an unlawful compensation arrangement involving the sale of implanted cardiac devices paid for by Medicare and other public health insurance programs. The manufacturer hired a sales representative whose brother, a physician, implanted the devices at a hospital. The hospital billed federal health insurance programs for the devices, and the manufacturer paid the sales representative a commission for each sale. The relator claimed that this arrangement violated the Anti-Kickback Statute and the Stark Law, as the commissions were tied to the number of devices implanted by the physician brother.Previously, the United States District Court for the Central District of California dismissed the complaint. The district court found that the action was barred by the False Claims Act’s public disclosure bar, reasoning that a New York Times article had already disclosed that the manufacturer used financial incentives to encourage physicians to use its devices. The district court concluded that the relator’s allegations were not materially different from what had already been publicly disclosed and denied the relator’s motion to amend the judgment.The United States Court of Appeals for the Ninth Circuit reviewed the case. The Ninth Circuit held that the public disclosure bar did not apply because the relator’s complaint provided genuinely new and material information not previously disclosed by the New York Times article or other public documents. The court found that the specific three-way compensation arrangement involving commissions to a physician’s family member was not substantially the same as the general financial incentives described in the article. The Ninth Circuit reversed the district court’s dismissal, vacated the denial of the motion to amend as moot, and remanded the case for further proceedings. View "SAM JONES COMPANY, LLC V. BIOTRONIK, INC." on Justia Law