The June 28, 2012 U.S. Supreme Court decision upholding the Patient Protection and Affordable Care Act (“Act”) impacts the life sciences industry in a number of ways, including impacts on innovation and compliance initiatives by medical device, pharmaceutical, and biotechnology companies.

Innovation

A number of provisions in the Act provide incentives and resources for product innovation.  First, it is expected that more than 30 million Americans will obtain health care coverage on account of the Act.  A bigger pool of Americans with health coverage to pay for treatment will yield growth in pharmaceutical sales and, perhaps, the ability to charge higher drug prices, which, in turn, could spur innovation.  In addition, the Act created the Therapeutic Discovery Project Program, through which $1 billion in new therapeutic discovery project grants and tax credits will be awarded.  In 2010, 2,923 companies specializing in biotechnology … Read More »

As companies outsource drug and device development overseas, reducing development time and research and development costs, additional legal concerns are raised.  Last month a Shanghai court sentenced a researcher, employed by a leading Chinese pharmaceutical research firm, with 18 months’ probation, and ordered the employee to pay restitution for stealing and selling two patented compounds, owned by Merck.

The compounds were developed at the research firm, on behalf of Merck.  Apparently the employee gained access to the compounds and sold them illegally.  This case raises two important issues for manufacturers who outsource.  First, can the outsourcing agreements with research firms adequately protect intellectual property rights and data from this type of misappropriation?  Secondly, do patent portfolio strategies need to take into consideration these types of risks?  To learn more about the case see the article attached….

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I just noticed that in late 2011, the HHS-OIG modified some of the boilerplate in its advisory opinions.  The boilerplate is very objectionable, probably calls for a due process violation, and may well be disregarded by a court.

Since late 2011, HHS-OIG advisory opinions have contained the following sentence stating that advisory opinions may not be introduced in evidence to show that a person (other than the person requesting the advisory opinion) did not violate the Anti-Kickback Statute or Civil Monetary Penalties Law:

This advisory opinion may not be introduced into evidence by a person or entity other than [name redacted] to prove that the person or entity did not violate the provisions of sections 1128, 1128A, or 1128B of the Act or any other law.

Previously, the comparable boilerplate sentence stated:

This advisory opinion may not be introduced into … Read More »