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  October 2015

Arnall Golden Gregory LLP's Food and Drug Newsletter is a monthly update of legal and regulatory issues that affect the FDA-regulated community, including regular updates on legislative initiatives from AGG’s Washington, DC office, and articles from members of AGG outside the Food and Drug Practice.

In this Issue

 Industry Insights



Late Breaking News -- Can We Still Be Friends? FDA and Pacira to Settle Lawsuit Relating to Off-Label Promotion? 
Alan G. Minsk and William H. Kitchens

Taking a page (or lyric) from Todd Rundgren’s 1978 song, “Can We Still Be Friends,” it looks like the government, namely, the Food and Drug Administration and Department of Justice, and Pacira Pharmaceuticals, are looking to settle a pending lawsuit, whereby Pacira is challenging FDA’s restrictions on the company’s promotional efforts. According to the U.S District Court hearing the case, the parties have extended the deadline by which the government must respond to Pacira’s lawsuit, indicating that they are looking to settle the case completely or narrow the dispute
, which focuses, primarily, on promotion of off-label promotion. We discussed the 
Pacira lawsuit in our last Newsletter, and we have written about the Amarin lawsuit, which was the precursor to this one. More > 

You Can Check Out Anytime You Want, But You Can Never Leave: FDA Import Detentions and Recommendations to Minimize Delays
By: Alan G. Minsk

In The Eagles’ song, “Hotel California,” Don Henley sings, “You can check out anytime you want, but you can never leave.” Life science companies can try to import all they want, but that doesn’t mean the products will make it into the United States. It seems lately that the Food and Drug Administration has been detaining client products – actually, we were retained after the import detentions were imposed -- more frequently. While we do not have any empirical evidence to suggest there is an agency-wide increase in such holds, we thought we’d provide a short overview of FDA’s enforcement authority in the area and offer some recommendations to minimize delays. These delays can cause the loss of thousands, if not millions, of dollars. More > 

District Court in D.C. Vacates HHS’ Interpretive Rule Regarding Orphan Drug Exclusion from 340B Discount Pricing
By: Neil W. Hoffman

In what amounts to a victory for the pharmaceutical industry, on October 14, 2015, the U.S. District Court for the District of Columbia vacated the interpretive rule issued by the U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) regarding the exclusion of orphan drugs from 340B discount pricing for certain covered entities, as provided under section 340B(e) of the Public Health Service Act (PHSA). This court ruling is the latest and possibly last event in a long-running fight between HHS and Pharmaceutical Research & Manufacturers of America (PhRMA) over the scope of orphan drug exclusion from 340B discount pricing. More >  

PharMerica Corporation Settles Anti-Kickback Allegations by Paying Over $9 Million to Government
By: Matthew T. Covell

On October 7, 2015, the Department of Justice announced that PharMerica Corporation (“PharMerica”), the nation’s second-largest nursing home pharmacy, agreed to pay $9.25 million to resolve allegations that it received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the prescription drug Depakote for nursing home patients. PharMerica is based in Louisville, Kentucky. More >



Six Key Ways to Protect Mobile Medical App IP
By: Anuj Desai and Andrew B. Flake

As a long-term means of protecting value for a mobile medical application (MMA) product, securing core intellectual property tops the list. The technology behind your app may represent most of your company’s value, as any number of recent acquisitions of and substantial investments in MMA companies attest. If not deterred, competitors or aspiring competitors can be quick to reverse engineer or otherwise seek to replicate the features of your software, especially if you are an early innovator or disruptor in the market. Yet, especially given how fast-paced and fluid the development environment can be, company management too often gives insufficient attention to the topic of intellectual property protection. Here are six proven ways to implement a robust and well-thought out intellectual property strategy for your MMA. More > 



The Yates Memo – A Warning to Execs and Employees: Effects of Expanding the DOJ’s Efforts to Combat Corporate Wrongdoing and Hold Individuals Accountable
By: Jason E. BringSara M. Lord and Sean T. Sullivan

“The buck needs to stop somewhere where corporate misconduct is concerned,” said Attorney General Eric Holder in a September 17, 2014 speech to NYU School of Law. He went on to say that “corporations are structured to blur lines of authority and prevent responsibility for individual business decisions from residing with a single person.” The same day, Principal Deputy Assistant Attorney General for the Criminal Division Marshall Miller told the Global Investigation Review Program that “corporations do not act criminally, but for the actions of individuals. The Criminal Division intends to prosecute those individuals, whether they’re sitting on a sales desk or in a corporate suite.” More >  

Toumey Healthcare Settles False Claims Act Suit for $72 Million
By: Aaron M. Danzig

In a long-running False Claims Act case with significant implications for hospitals, Toumey Healthcare System last week agreed to settle its case by paying $72.4 million to the government. While this sum is significant, it is less than a third of the $237 million verdict that was upheld on appeal over the summer. In addition to the payment, Toumey will be sold to Palmetto Health and entered into a Corporate Integrity Agreement with the Department of Health and Human Services’ Office of Inspector General. More >  

Millennium Health And DOJ Settle False Claims Act Allegations For $256 Million
By: Sara M. Lord

On October 19, 2015, the Department of Justice (DOJ), through the United States Attorney’s Office for the District of Massachusetts, announced that Millennium Health (formerly Millennium Laboratories) had agreed to resolve allegations under the False Claims Act (FCA) for $256 million. Millennium, which is one of the largest urine drug testing laboratories in the United States was accused of billing Medicare, Medicaid, and other federal health care programs for medically unnecessary drug testing and genetic testing, and providing kickbacks to physicians to induce business. The settlement incorporates two FCA settlements between the company and the DOJ, one involving urine drug testing and one involving pharmacogenetic testing, as well as an administrative settlement between Millennium and the Department of Health and Human Services (HHS). More >

Industry Activities and Recognition 

AGG Lawyers Presented Webinar Entitled, "Ready for Growth: What Health IT Investors Want You to Know"

AGG partners 
Sherman A. Cohen and Andrew B. Flake, along with guest panelist Rik Vandevenne of River Cities Capital Funds, presented a webinar on pitfalls in protecting your proprietary technology, company documents and proactively addressing problems with customer contracts on Wednesday, October 28, 2015. View Recording >

AGG's Government Investigations Practice Group Tops in Atlanta

The editorial board of the Fulton County Daily Report named Arnall Golden Gregory as the top firm (tied with another firm) in the White-Collar Defense category in the paper’s annual Litigation Department of the Year awards. AGG’s 
Government Investigations and Special Matters practice represents individuals and companies in all manner of government investigation and prosecution, including defending providers in False Claims Act cases.

Sara Lord to Serve on AHLA Fraud and Abuse Practice Group Enforcement Committee 

Sara M. Lord has been asked to serve as the Co-Chair of the AHLA Fraud and Abuse Practice Group Enforcement Committee.

Upcoming Events 

AGG Partner Alan Minsk will be the Keynote Speaker for BiomedEducations’ program, “Critical Updates in Regulatory and Quality Affairs” in Rehovot, Israel on November 12, 2015.

AGG Partner Alan Minsk will present “Challenges and Opportunities when Communicating with the U.S. Food and Drug Administration” at Pacifichem 2015 in Honolulu, Hawaii on December 16, 2015.

This newsletter is published by Arnall Golden Gregory’s Food and Drug and Government Affairs and Public Policy Practices. This information presented provides a general summary of recent legal and regulatory developments. It is not intended to be, and should not be relied upon, as legal advice. For more information about the Food and Drug Practice, please contact Alan Minsk.
©2015. Arnall Golden Gregory LLP. All Rights Reserved.  Atlanta | Washington, DC

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